Regional Electricity Consumption and Economic Growth in China

Abstract

The success of economic reforms in China, initiated at the end of the 1970s, as measured by economic growth, was driven mainly by the promotion of capital accumulation and openness (Herrerias and Orts, 2011). In recent years, while the majority of Occidental economies were suffering the consequences of the global crisis, the Chinese economy grew 10.3 per cent in 2010 and, on average, 10.92 per cent from 2003 to 2010, making a significant and steady contribution to the dynamism of world economic activity (see Figure 8.1(a) and 8.1(b)). However, at the same time economists have questioned the sustainability of this fast economic growth, the growth model promoted by the government and the possible consequences. The strong dependence upon external demand, income inequalities, and environmental damage are almost ignored and left unresolved by the government. While it is true that some efforts have been made, with little success, in terms of the promotion of internal demand and inequality, energy and environmental policies were totally forgotten until the 11th Five-Year Plan (2006–10). In this plan, China, committed to achieve a green economy, aimed to increase consumption of renewable energy sources and prevent environmental pollution by increasing environmental investment by 1.33 per cent of GDP by 2009.