An Empirical Analysis Of Energy Demand In China

With the development of economy and rapidly rising of energy price, the security problems of all countries energy supply become more and more prominence in the world. Many economists start to use econometric method to research the relationship between energy and economic growth. China and Germany—one of the member of EU, own abundant coal resource and lack of oil resource relatively, both countries are one of those countries that consume the most energy sources. On the other hand, the security problems of energy supply in these two countries are increasingly standing out, their energy especially petroleum supply depends on foreign countries increasingly. But Germany adjusted its energy policies since the 1990s, it has obtained definite achievement. This paper wishes to put forward some enlightened advices for energy development of China through comparing the similarities and differences of energy demand and energy policies between China and Germany.In the first place, this paper qualitative analyzes energy demand of China and Germany, then study empirically energy demand functions of two countries between 1981 and 2004 using error correction model and time-varying parameter model. The results of studying show that energy efficiency of China and Germany improved obviously since the 1980s, but the efficiency elasticity of energy in Germany is bigger than that in China; the income elasticity of energy in China is smaller than that in Germany. Simultaneously, the income elasticity of energy is bigger than the efficiency elasticity of energy in China, but Germany is opposition, which shows that the development of energy in China is not continuable. In addition, the results of studying also show that the population of China is a distinct factor that affects on energy demand, but the population of Germany is not a distinct factor that affect on energy demand. And energy price of China and Germany is not a distinct factor that affect on energy demand. In the end, based on the empirical analysis, this paper also studies comparatively energy policy in security of energy supply between China and Germany, and brings forward some suggests on continuing to control population growth in future's energy policy in China, exploiting especially energy saving technique and developing new energy sources.