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Chinese energy statistics, take two

by Michael Levi
April 14, 2010

Several commenters have thoughtful responses to my attempt to reconcile China’s claim that it’s cut its energy intensity by 14.38% since 2005 with the underlying GDP and energy consumption statistics. I also asked a friend who was visiting China last week to poke around, but without luck. My sense is that there’s a simpler explanation to all this:

If the only problem was that I calculated a 14.8% drop and China claimed a 14.4% drop, I’d just chalk that up to rounding errors. That said, though, I’m pretty sure that the fact that my numbers line up is a coincidence. There’s no logical reason to deflate GDP by CPI, and it would be a bizarre departure from standard practice. So I was wrong.

Which leaves only one serious alternative: The GDP and energy consumption numbers are real, but the energy intensity claim is (at least somewhat) invented. I spoke with someone yesterday whom I tend to find among the most reliable watchers of Chinese energy statistics. His guess was that they’ve picked a politically useful number for now, and will gradually reassess the underlying GDP (and perhaps energy consumption) numbers over the next few years so that everything ultimately matches up. This is apparently common practice.

That’s the theory I’m going with too for right now. But I’d still be eager to hear other takes.

Post a Comment 3 Comments

  • Posted by N. M. Slamon

    Sir:
    Not having any data on Chinense GDP/energy use intensity, here are some thoughts which someone, like you [having access to data], might check:

    1.,The export collapsed to a certain extent, and the USA/Japan/EU outsourcing was mainly “dirty industries” to China, thus fall in export goods migh indicate that energy use indeed was more efficient.

    2., Having read in various URL-s that China was replacing old, inefficient coal fired generators with newer designs, the efficiency gain should be reflected in the GDP.

    3., Possibly concrete use decline due to falling construction may have great imnpact, for cement manufacture is very energy intensive.

  • Posted by Han Xu

    I am a bit late to the game on this one, but you can get numbers that are extremely similar to the reported energy intensity reduction numbers by calculating an implied real GDP using GDP growth.

    China only reports nominal GDP, but the growth figures are for real GDP. So pick a base year, then apply the growth rate to get implied real GDP in base year Rmb, then calculate energy intensity with that. You end up with values that are off by a small enough margin that they’re very likely rounding errors (e.g. my derived energy intensity for 2008 is 1.117 tce/10,000rmb, instead of the reorted 1.118).

    [ML: I'm puzzled because I also used GDP growth figures, rather than absolute ones, for the precise reason you note. What source did you use? China has revised its GDP statistics since I wrote this post -- my understanding is that the new GDP figures are consistent with the claimed intensity improvements.]

  • Posted by Han Xu

    I am using the latest NBS numbers, but you are correct, the growth rates for GDP have changed, as have the energy intensity numbers.

    So I suppose that previously the energy intensity numbers had not been harmonized with the GDP growth figures. But the fact that I can get the same energy intensity using total energy use and GDP shows that energy intensity is indeed based on real GDP.

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