China's Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution

Hengyun Ma, Les Oxley, John Gibson and Bongguen Kim ()
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Bongguen Kim: The University of Waikato

No 09_02, Working Papers from Motu Economic and Public Policy Research

Abstract: With its rapid economic growth, China's primary energy consumption has exceeded domestic energy production since 1994, leading to a substantial expansion in energy imports, particularly of oil. China's energy demand has an increasingly significant impact on global energy markets. In this paper Allen partial elasticities of factor and energy substitution, and price elasticities of energy demand, are calculated for China using a two-stage translog cost function approach. The results suggest that energy is substitutable with both capital and labour. Coal is significantly substitutable with electricity and complementary with diesel while gasoline and electricity are substitutable with diesel. China's energy intensity is increasing during the study period (1995-2004) and the major driver appears to be due to the increased use of energy intensive technology.

Keywords: China; Interfactor/interfuel substitution; Technology; Energy intensity decomposition (search for similar items in EconPapers)
JEL-codes: D24 O33 Q41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2009-02
New Economics Papers: this item is included in nep-cna, nep-dev, nep-ene and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: China's energy economy: Technical change, factor demand and interfactor/interfuel substitution (2008)
Working Paper: China’s Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution (2008)
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