China's energy consumption under the global economic crisis: Decomposition and sectoral analysis

It is now widely recognized that there is a strong relationship between energy consumption and economic growth. Most countries′ energy demands declined during the economic depression of 2008-2009 when a worldwide economic crisis occurred. As an export-oriented economy, China suffered a serious exports decline in the course of the crisis. However, it was found that energy consumption continued to increase. Against such a background, this paper aims to assess and explain the factors causing the growth of energy consumption in China. First, we will explain the impact of domestic final use and international trade on energy consumption by using decomposition analysis. Second, embodied energy and its variation across sectors are quantified to identify the key sectors contributing to the growth. Lastly, the policy implications for long-term energy conservation are discussed. The results show that the decline in exports was one of the driving forces for energy consumption reduction in the crisis, but that the growth of domestic demand in manufacturing and construction, largely stimulated by economic stimulus plans, had the opposite effect on energy consumption. International trade contributed to decreasing energy consumption of China during and after the crisis because the structure of exports and imports changed in this period.