Industrial Upgrading

The Effects of Industrial Upgrading on Energy Intensity: Evidence from China

Cai-Xia Song; Yi-Sen Ma; Mo-Yuan Li; Cui-Xia Qiao

ABSTRACT: Using panel data of 282 prefecture-level cities in China from 2006 to 2019, this paper examines the effects of industrial upgrading on energy intensity. We divide industrial upgrading into two aspects: rationalization and advancement of the industry. The findings indicate that both industrial advancement and rationalization have a positive impact on reducing energy intensity. However, this effect varies depending on market size and geographic location, being more significant in regions with large market size and in the eastern part of the country. These findings suggest that the government should promote not only the development of tertiary industries but also the industrial integration of services and manufacturing to reduce energy intensity and achieve green and sustainable economic development in the context of sustainable development. It should also pay attention to the developmental differences among regions and implement targeted strategies.

KEYWORDS: energy intensity; industrial upgrading; rationalization and advancement; China