Trade openness, economic growth, and energy intensity in China

Abstract

The growing demand for energy and the associated pressure of environmental pollution has drawn considerable attention from the Chinese government. Reducing energy intensity in maintaining economic growth has positive implications for China's future green transformation. We systematically examine energy-intensive factors in the context of provincial and regional development in China, at both theoretical and empirical levels. We estimate the energy intensity of 30 provinces and regions in the Chinesemainland from 2005 to 2018 and provide a normative interpretation of the impact of trade openness and economic growth on China's energy intensity using a dynamic panel model. Economic growth and trade openness reduce energy intensity when control variables are included; however, the effect of economic growth on energy intensity is more obvious. Foreign trade affects energy intensity mainly through the export route, while the effect of the import route is not significant. The regional variability of the effect of trade openness and economic growth on energy intensity is insignificant between the east and west of China. Accordingly, to reduce energy intensity and coordinate their development, the government should play an active role in opening trade and economic growth. Additionally, a synergistic mechanism of energy control between provinces and regions is necessary.