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China’s New Development Strategy: Environment and Energy Security


  • Khan, Haider


This paper analyzes China's development strategy by focusing on both global and regional approaches to solving problems of energy security and ecological imbalance by addressing specifically the problems of China’s energy security. PRC’s growing energy dependence has become a major concern for both economic and national security policymakers in that country. The ambitious goal of modernization of the economy along the lines of the other newly industrialized economies(NIEs) of Asia has succeeded only too well, and it is difficult to reorient economic priorities. If examined rigorously, such an economic strategic assumption can be seen to entail the goal of creating further technological capabilities. In particular, China seems to be firmly committed to the creation of a largely self-sustaining innovation system as part of a knowledge-based economy of the future . Such innovation systems, called positive feedback loop innovation systems or POLIS have been created by advanced countries, and NIEs such as South Korea and Taiwan are proceeding to create these as well. But this will add to its energy burden and further dependence on the US as the power which controls the key sea lanes. Only a strategic reorientation to building a self-sustaining POLIS and appropriate regional cooperation institutions can lead to the way out of the current dilemma for China. Fortunately, such a model of POLIS which is distributionally and ecologically sensitive can be built for China and applied strategically to lead towards a sustainable development trajectory. However, time is of the essence. Given the path dependence of development unless strategic disengagement from the existing path followed by a strategic engagement with the alternative strategy is begun within the next five years, it may well be too late. The stakes are indeed very high. A more detailed strategy paper based on the key ideas from the alternative strategy outlined here with concrete quantitative scenarios and feasibility studies along the lines of models sketched in the appendix ( and other, more detailed models) will go some distance towards giving the appropriate analytical foundations for the policy makers. The preliminary results confirm the predictions regarding fossil fuel-based energy shortage and lead towards a serious consideration of alternative energy sources. Achieving the twin goals of energy security and ecological balance are challenging but not impossible for China. Serious policy research can be used effectively if there is the political will to do so. The goal of regional cooperation is also achievable if patient negotiations in good faith can start in earnest. In particular, cooperation with other Asian economies, particularly Japan, Indonesia, Viet Nam and India will be crucial.This paper has sketched out the complexities of cooperation and conflict between China and Japan. Future work will address the problems of Regional cooperation for China in the East, South and South Asian context as well as in the context of Africa and Latin America.

Suggested Citation

  • Khan, Haider, 2008. "China’s New Development Strategy: Environment and Energy Security," MPRA Paper 7639, University Library of Munich, Germany, revised 2008.
  • Handle: RePEc:pra:mprapa:7639

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    References listed on IDEAS

    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. ZhongXiang Zhang, 1998. "The Economics of Energy Policy in China," Books, Edward Elgar Publishing, number 1291.
    3. Soete, Luc, 1985. "International diffusion of technology, industrial development and technological leapfrogging," World Development, Elsevier, vol. 13(3), pages 409-422, March.
    4. Deolalikar, Anil & Hasan, Rana & Khan, Haider & Quibria, M.G., 1997. "Competiveness and Human Resource Development," MPRA Paper 2819, University Library of Munich, Germany, revised 1997.
    5. Keith E. Maskus, 1993. "Intellectual property rights and the Uruguay Round," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 10-25.
    6. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
    7. Thorbecke, Erik & Jung, Hong-Sang, 1996. "A multiplier decomposition method to analyze poverty alleviation," Journal of Development Economics, Elsevier, vol. 48(2), pages 279-300, March.
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    Cited by:

    1. Khan, Haider A., 2011. "Bangladesh: National Political Econmic Strategies in Perilous Times," MPRA Paper 40121, University Library of Munich, Germany.

    More about this item


    China; Development Strategy; Energy; Environment; POLIS; Innovation System; Regional Cooperation;

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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