A Comparative Study of Energy Consumption and Efficiency of Japanese and Chinese Manufacturing Industry

The industrial sector consumes about 50% of the world׳s delivered energy and thus has a large impact on the world׳s energy production and consumption. Japan is one of the leading countries in industrial efficiency while China is the world׳s largest industrial energy consumer. This study analyzes the energy consumption and efficiency of the Japanese and Chinese manufacturing industry. Analysis shows that the energy intensity of both Japanese and Chinese manufacturing industry has decreased significantly. Decomposition analysis shows that the efficiency effect played an important role in reducing energy intensity; improvement of the energy efficiency of both Japanese and Chinese manufacturing industry showed a trend of exponential decay. Structural effect significantly reduced the energy intensity of the Japanese manufacturing industry while having a relatively small influence on the energy intensity of the Chinese manufacturing industry. Our analysis also shows a strong association of industrial energy efficiency improvement with energy policies, highlighting that energy efficiency policies can play an important role in the reduction of industrial energy intensity. The results of this study also underscore the important, yet very challenging, task of achieving structural change to further improve efficiency.