Interaction Between Energy Efficiency And Economy Growth From The View Of Economy Transformation

With China’s sustained economic growth, the demand for energy rise sharply. As a developing country, the growing energy demand and highest carbon emissions in the world lead our country to a disadvantage position in the international energy competition. As one of the important lifeblood in national economy development, energy plays an important role in the orderly operation of the society, with the coming out of economic new normal, traditional elements to promote extensive growth model is unsustainable, economic growth will rely more on human capital and technology progress. The improvement of energy efficiency means more efficient utilization of energy, to some extent, it is a reflection of technology progress. Therefore, in today’s increasingly complex international and domestic environment, the study of relationship between Chinese energy efficiency and economic growth becomes urgent and important.On the other hand, since China’s opening up policy is performed, China has experienced a deep institutional reform in many areas, the transformation of economic system brings unprecedented vitality to Chinese economy, the development of non-state economy and opening to the outside bring particularly effect of institutional change. This paper argues that the root reason of the change in economic fields can be attributed to China’s economic system reform. Therefore, studying China’s energy efficiency and economic growth cannot be separated from the specific institutional environment in China.Based on the discussion above and the shortage of the existing research, from the perspective of economy transformation, the article builds a simultaneous equation model including energy efficiency and economy growth and studies the connection between them, using the panel data of all provinces in China from 1995 to 2012. We try to use a multidimensional marketization index to quantify the process of regional economic system changes, and introduce it to the simultaneous equation model. According to the characteristics of energy consumption, the country is divided into three major areas, then, the interaction between energy efficiency and regional economic growth is discussed under the background of China’s economic transformationThe empirical results show that both enterprises marketization and opening-up policies play significant roles in energy efficiency and economy growth, besides, industrial structure and energy consumption structure are also the important factors. In the high and low energy efficiency areas, a positive interaction exists between energy efficiency and economy growth. However, a mutual interference exists between them in the middle energy efficiency areas. It implies that when making policies, the government should consider more regional difference factors and avoid the impact generated from energy efficiency improvement. At the end of the paper, we put forward some policies recommendations relevant to marketization process, upgrading of industrial structure and energy structure areas.