Modeling and forecasting energy consumption in China: Implications for Chinese energy demand and imports in 2020

The Chinese economy is in a stage of energy transition: from low efficiency solid fuels to oil, gas, and electric power, from agriculture to urbanization and industrialization, from heavy industry to lighter and high tech industry, from low motorization to rapid growth of the motor vehicle population. Experts fear that continued rapid economic growth in China will translate into a massive need to expand imports of oil, coal, and gas. We build an econometric model of the Chinese energy economy based on the energy balance. We use that model to forecast Chinese energy consumption and imports to 2020. The study suggests that China will, indeed, require rapidly growing imports of oil, coal, and gas. This growth is not so sensitive to the rate of economic growth as to increases in motorization. It can be offset, but probably only in small part, by increasing domestic energy production or by improvements in the efficiency of use, particularly in the production of electric power.