How much have electricity shortages hampered China's GDP growth?

Yuk Shing CHENG, Wing Keung WONG, Chi-Keung WOO*

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    51 Citations (Scopus)


    Based on an econometric analysis of the annual growth data for China's GDP and electricity generation from 1953 to 2010, we find that electricity generation growth Granger causes GDP growth, but not vice versa. We also find that the GDP elasticity of electricity generation is about 0.6, implying that a 1% increase in China's electricity generation growth would increase GDP growth by 0.6%. While Deng's reform raised China's GDP growth rate by about 5% per year, it did not alter the GDP elasticity of electricity generation. Hence, an obvious strategy to promote China's economic growth would be accelerating electricity generation expansion. Rapidly adding thermal generation units, however, could have large-scale, adverse environmental impacts. We therefore support China's 2011 five-year plan, which calls for expanding investments in renewable energy, conservation and energy efficiency as well as improving China's integrated electricity planning and cost-based pricing decisions.

    Original languageEnglish
    Pages (from-to)369-373
    Number of pages5
    JournalEnergy Policy
    Publication statusPublished - Apr 2013

    Scopus Subject Areas

    • Energy(all)
    • Management, Monitoring, Policy and Law

    User-Defined Keywords

    • China's electricity policy
    • Electricity shortage
    • GDP growth


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