Energy Scarcity, Structural Change And Economic Growth

Economic growth has been one of the hot topics of concern to scholars at home and abroad, which is the most basic indicators to measure whether a country’s welfare is good or bad. The developed countries want to obtain lasting prosperity through economic growth, while developing countries are eager to get rid of poverty and backwardness through economic growth. Precisely because of its importance, economists at different periods regarded economic growth as an important object of study. As a developing country, China has made tremendous achievements since the reform and opening up, the most important performance is one of high-speed economic growth. Its gdp grew from364.5billion yuan in1978to471564billion yuan in2011, take1978as the base period, the average economic growth rate is about10%, creating a "growth miracle" history in the world economy, but at the same time, a fact that cannot be ignored is:for a long time, China’s economy is taking the one relying on high input, high consumption of "extensive" growth path to achieve high growth rates, such "extensive growth pattern" has its historical reasons------to take advantage of the cost and price advantage of low prices of energy products in the early stage of economic development, resulting in the accumulation of capital and to maintain high economic growth. This "extensive growth pattern" of economic growth leads to a lot of natural resources particularly in primary energy consumption, which as an iput from571.44million tons of standard coal in1978to3.48billion tons of standard coal in2011in the process of economic growth. The annual average growth rate of energy consumption is approximately6%.In the early stages of economic development, there is no significant constraint of energy on economic growth due to the relatively abundant sources of energy. But along with the further growth of China’s economy, this constraint has become more prominent. On one hand, from the domestic situation in recent years,"gas shortage"," oil shortage ","coal shortage" and "power shortage" prevailing in different regions.Moreover, it’s first time for China from coal importer to coal exporter, and energy consumption structure in China is coal-based for a long time. On the other hand, from the international situation, with rapid increases in international oil prices since2001and the resulting higher energy prices had a larger impact on China’s economic growth. Therefore, situation at home and abroad show that the degree of energy scarcity is growing as the economy continues to grow and improve.Accompanied by degree enhancement of energy scarcity, China’s economic growth is constrained by energy form two aspects:supply (reserves) and price, which is exactly a measure of energy scarcity of physical and economic indicators. Energy supply has a significant impact on economic development and social stability, high energy prices, and high energy price is the same. And what’s more, energy reserves constraint is related to energy security and even national security. China has abundant natural resources, but due to its large population, the per capita resources and reserves are far below the world average. Take the coal as the example, looked from2009data, the world demand for coal production and consumption remain unchanged, the coal is exhausted after119years. While in the case of China, the proven reserve of coal can only be used by China for38years, which is far below the world average level. In recent years, the rapid growth of energy consumption has push up China’s energy demand cardinal number to a new stage. From now on, even a modest growth rate of energy consumption can also cause significant increment of absolute consumption. If the8%growth rate unchanged, growth of energy consumption, low prices unchanged, by2015, China needs to3.1billion tons of coal, oil import dependence will reach65%. Judging from current consumption rate, regardless of the expected energy reserves of the technological advances, has failed to reassure the people’s concern of China during the transition to medium-income countries in the process of whether the price is reasonable and sufficient energy supply. In addition, in order to maintain social stability and economic growth, energy prices are artificially low, does not reflect the scarcity of the resource and environmental impact. Rapid growth of heavy industry in recent years has led many people realize that low energy prices is a major cause of excessive energy consumption. Scarcity of energy level continues to improve restraints on the economic growth in China, and industrial structure has changed in the process of economic growth in China:the proportion of primary industry, secondary industry and tertiary industry for GDP is51%、21%and28%in1952, while10%、47%and43%in2011. This leads to the question:is energy scarce in China? What factors affect the degree of energy scarcity in China? Is change in industrial sturcurure which causes change in energy consumption and in turn do affect economic growth in China? To answer these questions, the paper first analyzes the degree of scarcity of coal, crude oil and natural gas from the physical indices and economic indicator that can measure scarcity by using statistical analysis. The results show that coal prices are relatively low, crude oil prices were flat, while natural gas prices too high, relative to the world’s major countries. The based on error correction model, we study market integraton between coal, crude oil and natural gas in China and those in the major countries of the world, which indicates that maket integration of coal and natural gas in China is very low, while higher for crude oil, once again confirmed the reliability of China’s primary energy scarcity degree. Finally the paper integrates industrial structure into energy constrain model based on traditional economic growth model. And using model of multiple structural breaks to prove the change in industrial structure will lead to the change in energy consumption and its impact on economic growth. And we came to the conclusions of the many facts in line with China’s economic growth to give corresponding countermeasures and suggestions.