Impact of economic growth and labor productivity dispersion on energy intensity in China

Abstract

This paper quantitatively measures the labor productivity dispersion index of 30 provincial-level political regions (excluding Tibet) in mainland China from 2006 to 2018 based on industrial employment and output share data. Based on clarifying each region's economic variability, a spatial panel model is used to examine regional economic growth and labor productivity dispersions' effects on energy intensity. It was found that energy intensity in China is significantly spatially correlated. There is a clear gap between the share of output and the share of employment in China's three industries where labor productivity has deviated. The highest index of labor productivity dispersion is found in the western region, followed by the central region, with the lowest in the eastern region. Although, China's economic growth has had a significant negative impact on energy intensity, the current stage of China's economic development model is able to gradually achieve efficient energy use. However, the dispersion of labor productivity is not conducive to the improvement of energy factor allocation efficiency, and rationalization of industrial structure and employment structure transformation are urgently needed. To control energy intensity, China should actively adjust the current labor productivity dispersion; promote the transfer of primary industry labor to secondary and tertiary industries; strengthen control mechanisms for energy prices; optimize the impact of investment activities on energy intensity; and improve energy efficiency.