China's Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution
AbstractWith 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.
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Bibliographic InfoPaper provided by Motu Economic and Public Policy Research in its series Working Papers with number 09_02.
Length: 29 pages
Date of creation: Feb 2009
Date of revision:
China; Interfactor/interfuel substitution; Technology; Energy intensity decomposition;
Other versions of this item:
- Ma, Hengyun & Oxley, Les & Gibson, John & Kim, Bonggeun, 2008. "China's energy economy: Technical change, factor demand and interfactor/interfuel substitution," Energy Economics, Elsevier, vol. 30(5), pages 2167-2183, September.
- John Gibson & Bongguen Kim & Hengyun Ma & Les Oxley, 2008. "China’s Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution," Working Papers in Economics 08/01, University of Canterbury, Department of Economics and Finance.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-22 (All new papers)
- NEP-CNA-2009-03-22 (China)
- NEP-DEV-2009-03-22 (Development)
- NEP-ENE-2009-03-22 (Energy Economics)
- NEP-TRA-2009-03-22 (Transition Economics)
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