There have been many books written about China's economy, and the number analysing its energy sector and policies is growing, but few have set out to examine the links between energy and the nation's economy. This book makes a useful contribution in this respect. The editors have assembled a number of scholars, many of whom are relatively young, to analyse different aspects of China's economy and its use of energy. The question which underlies many of these accounts is the rate at which the country can move away from the highly energy- and carbon-intensive growth that has characterized the early years of this century.
The first two chapters provide useful background by comparing China's pattern of rising energy demand with other industrializing economies (Carlos Aller and Lorenzo Ductor) and by demonstrating the impact of this growing demand on international markets (Atanu Ghoshray and Javier Ordonez). They show, respectively, that China has great potential relative to many other countries to reduce carbon emissions and that its import requirements continue to have significant consequences for international commodity markets.
Six chapters provide qualitative analyses of different aspects of China's energy sector, namely: energy diplomacy via the Shanghai Cooperation Organization (Elzbieta Maria Pron), the institutional setting of China's energy policy (Karolina Wysoczanska), national energy security (Dan Luo and Shujie Yao), the domestic oil market (David Broadstock), the country's alternative energy sources (Maria Garcia) and institutional barriers to the government's renewable energy strategy (Evan Hills and Zhengxu Wang). These accounts provide useful summaries of recent developments in China's energy policies for those readers new to the topic, but mostly fail to yield new insights into the forces that have shaped them.
The later, mainly quantitative chapters are different, for they do report relatively original analyses which examine different aspects of the link between energy consumption and economic growth. Two chapters look at regional variations. Maria Jesus Herrerias and Roselyne Joyeux show how the causal relationship between economic growth and electricity consumption has varied across the country. Their principal conclusion is that there is long-run causality from per capita GDP to electricity consumption in all the major grids in China, except for the eastern grid; the implication being that the government can continue to enforce energy-saving measures without harming economic growth. In the next chapter, Herrerias examines regional variations in the link between energy intensity and productivity. Her analysis shows that higher productive efficiency yields lower energy intensities. The one exception is the energy sector itself which remains under state control with highly regulated prices.
During the 30 years from 1980, China's energy intensity declined by almost 70 per cent. Ana Cuadros and Vicente Orts conclude, in line with other scholars, that this remarkable achievement owes more to the adoption and diffusion of improved technology and management practices than to structural changes in the economy. This leads them to argue that the government should continue to promote inward investment by foreign companies in order to support the continued improvement of technology and reduction of energy intensity. This line of thinking is supported by the succeeding chapter which shows how foreign direct investment has improved energy efficiency in the Yangtze River Delta area around Shanghai, driven by a combination of better technology and management and by international pressures for greener practices (Maoliang Bu and Huajiang Luo).
The last two chapters focus on the nation's emissions of carbon dioxide. Chaoxian Guo and Yanhong Liu aim to identify the relative contributions of consumption, investment and export to carbon emissions over different periods of time between 1992 and 2007. They conclude that export and investment have been the principal drivers, with consumption playing a significantly smaller role, and they recommend, as others have done, that the government continue to promote domestic consumption and to shift its manufacturing industry up the value chain. In the final chapter, Xiumei Guo and Dora Marinova remind us of the environmental challenges that China faces in relation to its energy sector, and they review some of its strategies to combat this pollution, which include investing huge amounts of money in cleaning up heavy industry, improving accountability and raising public awareness.
Overall, this book provides a useful account of many aspects of China's energy sector and its relationship to the country's pattern of economic development. Whilst they yield few truly innovative insights, these accounts give the reader a good understanding of the challenges facing the government as it seeks to reduce energy intensity and to tackle the appalling levels of pollution. The volume makes useful reading for undergraduate or graduate courses where students require an overview of the world's largest energy sector, but is probably not sufficiently enticing for researchers seeking new insights, with the exception of a few of the quantitative accounts.
