China’s “Economic Miracle” Powers Progress with Energy Access

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Published: 12 Dec 2013
 

China’s “Economic Miracle” Powers Progress with Energy Access

Increased energy access is key to lifting citizens out of poverty. China’s efforts in recent decades to improve poverty rates and raise the overall quality of life for Chinese people, have been successful in large part because of the role coal plays in extending energy access.

“In the past quarter of a century, China has created wealth for many of its people, lifted many out of poverty, and helped drive and sustain global economic growth. Coal has underpinned China’s massive and unprecedented growth in output, fuelling an economic miracle that has helped to improve the standard of living in many countries.” 

--International Energy Agency 

Just as humans need water, food and shelter to survive, so too, do they need energy. In today’s technologically advanced world, energy access is both a basic human right and a rapidly rising need. It’s also vital to enjoying the benefits of modern societies. Energy keeps the lights on at night, allowing young people to study and adults to work when the sun is down. It provides the ability to cook food and helps keep perishable items from spoiling and going to waste. It powers hospitals and medical equipment, giving doctors and surgeons the power to, quite literally, save lives. Energy also powers technologies that create jobs and move economies and societies forward.

There is perhaps no factor more important in the economic growth and prosperity of developing countries than increased access to reliable and affordable sources of energy. With 79 percent of the country’s electricity generated by coal , China provides a compelling example of how increased energy access can make a dramatic difference in the lives of hundreds of millions of people.

Boasting the world’s second-largest economy, and maintaining GDP growth rates of approximately 10 percent for much of the past three decades, China has effectively lifted approximately 600 million of its people out of poverty over the same time period, according to World Bank figures . In fact, 72 percent fewer people in China were living below the poverty line in 2010 compared to 1981 . The United Nations predicts that by 2015 China’s poverty rate could fall to just five percent of the population.  Achieving these goals will represent one of the world’s greatest examples of proactively accelerating human development. 

And one of the primary connection points between macro-level economic prosperity and decreasing poverty rates is energy access, driven by the availability of affordable, reliable electricity. 

In China, coal has played an important role in fueling unprecedented growth and development. The country’s abundant domestic coal resources, supplemented by growing imports from Australia, the United States, Indonesia and other countries, have helped support that growth. As the economy has continued to grow, coal consumption in China alone has nearly reached the same level as the rest of the world combined.  This means more energy for more people, which supports more productivity and more prosperity.China consumes as much coal as the rest of the world

Other factors have been critical in extending energy access and empowering Chinese people to rise out of poverty. China’s rural electrification efforts have increased energy access for millions of people in the countryside. more people, which supports more productivity and more prosperity.

Urbanization is also increasing access to energy and decreasing poverty rate. In the past 30 years, more than 500 million people have moved from the countryside to China’s rapidly growing cities  – which are powered primarily by coal. A new milestone was reached in 2011 when China’s urban-to-rural population ratio tipped in favor of city-dwellers for the first time in history . With stable and ample energy, people in cities are able to find employment, start their own businesses, open small shops, and otherwise provide for themselves and their families. This type of economic activity is the cornerstone of urban and national poverty reduction.

As energy expert Daniel Yergin points out , coal will continue to be the mainstay of China’s electric power industry. Continued investment in ultra-supercritical coal plants and technologically advanced power grids will be important to further increasing access to cleaner and more reliable energy, and sustaining China’s development over the long term.

China will need to utilize all forms of energy to meet the country’s rapidly growing needs, but it is clear that coal will continue to play a transformational role in lifting hundreds of millions to a better quality of life while driving the modernization, urbanization and electrification of the world’s fastest-growing economy. 

  

Sources include: International Energy Agency World Energy Outlook (2013); South China Morning Post (March 29, 2013), The Wall Street Journal (April 18, 2013), South China Morning Post (March 29, 2013), Frank Clemente and Timothy J. Considine “Out of Poverty,” U.S. Energy Information Administration data, Reuters: “World Bank chief urges China to better manage urbanization” (September 18, 2013), National Bureau of Statistics (news.xinhuanet.com), Daniel Yergin "The Quest" (2011)

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