The Slowdown in China’s Energy Consumption Growth in the “New Normal” Stage: From Both National and Regional Perspectives

Lizhan Cao and Hui Wang
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Lizhan Cao: School of Management, Qilu University of Technology, Jinan 250353, China
Hui Wang: School of Economics and Management, China University of Petroleum, Qingdao 266580, China

Sustainability, 2022, vol. 14, issue 7, 1-21

Abstract: A series of systematic changes have occurred in the areas of growth rate, economic structure, and growth engine in China’s economic “new normal” stage. This study aims to evaluate how these systematic changes affect the slowdown in China’s energy consumption growth at both national and regional levels. We propose a nested index decomposition analysis (NIDA) model to uncover both the production- and demand-side factors. Development patterns are also defined in terms of energy consumption deceleration. Results show that the national energy consumption deceleration is mainly attributed to economic slowdown rather than improvements in economic structure (including energy mix, industrial structure, regional structure, and demand structure) and energy efficiency, implying that China’s current development pattern is unsustainable because the energy consumption deceleration is gained mainly at the expense of economic expansion. From a regional perspective, the developed regions are on an unsustainable path toward energy consumption deceleration because of relatively limited potential for structural updates and efficiency gains; while most of the less developed regions are on sustainable or unbalanced development paths. Policy recommendations are provided for both national and regional energy consumption deceleration.

Keywords: nested index decomposition analysis; demand structure; energy consumption; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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