Social Sciences in China (Chinese Edition)

No.2, 2018

Demand for Coal in Current Chinese Economic Development

(Abstract)

Lin Boqiang and Wu Wei

In the new normal of China’s economy, the growth of demand for coal and economic growth have diverged. Our analysis employs a dynamic input-output model, establishing a framework for analyzing the relationship between economic change and demand for coal, and taking into account the impact of technological progress and changes in coal quality and in the power supply structure on demand for coal. As our findings show, the volatility of the capital formation cycle is the main cause of the changing demand for coal, and once capital formation picks up, demand for coal will rebound. Incorporating different constraints, we further estimate the linked changes in future energy structural adjustment, environmental management, changes in industrial structure and carbon dioxide emissions. This indicates that we need to accelerate the development of clean energy while at the same time adopting a more cautious approach to planning for environmental management and low-carbon development.