Industrial restructuring, energy consumption and economic growth: Evidence from China

Under the downward pressure of the economy, China's extensive economic growth that relies on factor input is difficult to sustain. Scientific analysis of the industrial restructuring and energy consumption has become the key to realizing China's economic growth from high-speed to high-quality. Based on the fully-modified least square method and panel vector error correction model, this paper explores the equilibrium relationship and Granger causality among the industrial restructuring, energy consumption and economic growth at aggregated and disaggregated levels. The results show that: (1) The effect of industrial structure rationalization on economic growth is higher than that of industrial structure upgrading. When emphasizing industrial structure upgrade, the more reliable industrial policy to achieve China's sustainable economic growth is to pay attention to the industrial structure rationalization, especially in western China. (2) The impacts of natural gas and renewable energy consumption on economic growth are much smaller than coal and electricity consumption; more energy policies should be designed to encourage clean energy development.

Automated summary

This paper explores the equilibrium relationship and Granger causality among industrial restructuring, energy consumption, and economic growth at aggregated and disaggregated levels. The findings demonstrate that industrial structure rationalization has a higher impact on economic growth compared to industrial structure upgrading, while natural gas and renewable energy consumption have a smaller effect on economic growth. Therefore, it is important to focus on industrial structure rationalization and develop policies that encourage clean energy development.