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Energy Consumption in China: Past Trends and Future Directions

Author

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  • Paul Crompton

    (UWA Business School, The University of Western Australia)

  • Yanrui Wu

    (UWA Business School, The University of Western Australia)

Abstract

In 2003 China’s energy consumption amounted to 1678 million tonnes coal equivalent (MTCE), making China the world’s second largest consumer behind only the United States. China is now also one of the largest oil importers in the world. With an economy which is expected to maintain a rate of growth of 7 to 8 per cent for decades, China’s role in the world energy market becomes increasingly influential. This makes it important to predict China’s future demand for energy. The objective of this paper is to apply the Bayesian vector autoregressive methodology to forecast China’s energy consumption and to discuss potential implications. The results of this paper suggest that total energy consumption should increase to 2173 MtCE in 2010, an annual growth rate of 3.8 per cent which is slightly slower than the average rate in the past decade. The slower growth reflects an expected slower economic growth and the decline in energy consumption due to structural changes in the Chinese economy.

Suggested Citation

  • Paul Crompton & Yanrui Wu, 2004. "Energy Consumption in China: Past Trends and Future Directions," Economics Discussion / Working Papers 04-22, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:04-22
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    China; Energy consumption; Bayesian vector autoregression;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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