Asymmetric macroeconomic determinants of energy intensity in China: does economic development matter?

Previously, several studies have tried to analyze the various determinants of energy intensity for different countries and regions. However, none of the studies have focused on the asymmetric determinants of energy intensity in the context of China. Therefore, the primary aim of this study is to investigate the asymmetric determinants of energy intensity in China. We have gathered data for China over the period 1985-2019 and applied linear and non-linear ARDL models. In the linear model, only energy prices reduce the energy intensity in the long run. Moreover, the long-run effects of both energy prices and economic development are asymmetric; however, positive changes in both variables help to reduce energy intensity. Clearly, the results are asymmetric in nature; hence, the policymakers should consider both positive and negative shocks in energy prices and economic development while making any policy with regard to lowering energy intensity.

Automated summary

This study investigates the asymmetric determinants of energy intensity in China, finding that the long-term effects of energy prices and economic development on energy intensity are asymmetric, but positive changes in both variables help reduce energy intensity.