Coal Drives China’s Unprecedented Industrial and Economic Growth

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Published: 17 Nov 2013
 

Coal Drives China’s Unprecedented Industrial and Economic Growth

With coal as its primary energy source, China has grown to become the second-largest economy in the world today. Throughout much of its history, China has relied on coal for energy – the nation has been the world’s biggest coal producer for most of the past 2,000 years.  

“Even if China utilizes every kind of energy to the maximum level, it is still difficult for us to produce enough energy for economic development. It’s not a case of choosing coal or renewables. We need both… we have to use coal.”
– Xiao Yunhan, Deputy Director General of high-tech research and development at the Chinese Academy of Sciences

This reliance on coal has played a central role in driving China’s unprecedented industrial and economic growth. And as the country continues to grow, its reliance on coal will continue. China is the world’s largest coal user, using approximately 4 billion tonnes of coal annually, more than four times the use in the United States . By 2020, coal use in China is projected to rise by 36 percent to 4.8 billion tonnes per year, according to the China National Coal Association. 

China has undertaken major reforms over the past several decades, paving the way for unprecedented industrial and economic growth. This growth required reliable energy. In China, that energy has come from the country’s abundant coal reserves, which rank third-largest in the world at 115 billion tons,  and provide a cost-effective, convenient and secure source of energy. 

USD 8.358 Trillion

CHINA’S GDP IN 2012 – USD 6.9 TRILLION
HIGHER THAN IN 2002 AS A RESULT OF
USING COAL AS A PRIMARY ENERGY SOURCE 

No time period has been more indicative of this rapid growth than the last decade, during which China has experienced a 10 percent rise year-on-year in coal use, accounting for more than three quarters of the nation’s primary energy supply. China’s GDP also grew in lockstep with coal use, rising from USD 1.453 trillion in 2002 to USD 8.358 trillion in 2012.  

 

Studies have proven the correlation between coal demand, economic activity and social progress, where a rise in coal use mirrors a rise in GDP.  Nowhere is this truer than in China.

Coal’s impact on the development of China’s industrial base is even more astounding – the scale of industrial growth in China over the last 30 years is unmatched in human history. China is now the world’s leading producer of steel, non-ferrous metals, cement and various other materials, which are contributing to the construction of a modern manufacturing base, associated technology, and communications and services industry infrastructure. And coal provided the majority of the energy needed for increased steel production, and was the catalyst that made such unprecedented industrial growth possible. 

The Chinese government is aware of the important role coal has played in building the Chinese economy and is committed to the continued use of coal to help achieve broader economic development goals, including increased urbanization and development of the country’s western region. 

According to Xiao Yunhan, deputy director general of high-tech research and development at the Chinese Academy of Sciences, a top government academic research institute, “Even if China utilizes every kind of energy to the maximum level, it is still difficult for us to produce enough energy for economic development. It’s not a case of choosing coal or renewables. We need both … we have to use coal.” 

While many factors have contributed to China’s growth, the relationship between GDP growth and the rise in coal use makes one thing clear: China owes much of its rapid industrial and economic growth to widely available, affordable and dependable coal.

 

Sources include: World Coal Association “Coal’s Vital Role in China” (May 2011), World Coal Association “Coal’s Vital Role in China” (May 2011); IEA International Energy Statistics (data for 2012 coal consumption);  BP Statistical Review of World Energy (June 2013);  The World Bank (data.worldbank.org); International Energy Agency statistics

 

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