This paper investigates the extent to which structural change in China’s economy has contributed to changes in energy intensity. It uses a new province-level data set on energy intensity over the period 1990-2004. The main findings are that energy intensity of provincial economies comes down with higher GDP per capita. Most of the reduction in energy intensity has come from intra-sectoral energy savings in industry, with sectoral shifts playing a minor role, but this role is larger in the richer provinces, which have expanded their share of services in GDP. The recent rebound in energy intensity in China’s economy can in part be ascribed to a sectoral shift towards industry in the majority of provinces, but this is offset by continued efficiency gains within industry and other sectors. The exception to this trend is one province, which saw a sharp increase in energy intensity and which drives the results for China as a whole over 2001-4. Beyond structural change we find that energy intensity is negatively correlated with energy price, the efficiency within the energy sector and the share of light industry in provincial GDP, and positively with the share of state enterprises in industrial output.
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