How much have electricity shortages hampered China's GDP growth?

Y.S. Cheng, Wing-Keung Wong and Chi-Keung Woo

Energy Policy, 2013, vol. 55, issue C, 369-373

Abstract: Based on an econometric analysis of the annual growth data for China's GDP and electricity generation from 1953 to 2010, we find that electricity generation growth Granger causes GDP growth, but not vice versa. We also find that the GDP elasticity of electricity generation is about 0.6, implying that a 1% increase in China's electricity generation growth would increase GDP growth by 0.6%. While Deng's reform raised China's GDP growth rate by about 5% per year, it did not alter the GDP elasticity of electricity generation. Hence, an obvious strategy to promote China's economic growth would be accelerating electricity generation expansion. Rapidly adding thermal generation units, however, could have large-scale, adverse environmental impacts. We therefore support China's 2011 five-year plan, which calls for expanding investments in renewable energy, conservation and energy efficiency as well as improving China's integrated electricity planning and cost-based pricing decisions.

Keywords: Electricity shortage; GDP growth; China's electricity policy (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:55:y:2013:i:c:p:369-373

DOI: 10.1016/j.enpol.2012.12.015

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