Maximizing the economic welfare extracted from the energy system is a key priority for all governments. This can be measured by a country’s energy productivity. Perhaps nowhere else in the world is this issue more salient than in China. China is the world’s largest energy consumer and has led global economic growth in the first part of the twenty-first century. Furthermore, in the interconnected world we live in, decisions in China have global impacts. In periods of some of its fastest growth (from 2002-2005) China experienced declining energy productivity. In 2006, China put in place ambitious energy intensity targets. Combined with policies at the sector and product level, these contributed to China reversing its falling energy productivity. Building on this success, subsequent Five Year Plans, extended and deepened these reforms.
The response from Chinese policymakers to the challenges of managing fast economic growth within natural resource and environmental constraints provides a valuable lesson for governments in rapidly developing countries, such as the GCC. This project aims to understand what policy lessons can be learned from the Chinese experience of managing its energy productivity and its implications for international trade and policy cooperation.