China’s Economy Shifts Focus: Researchers Examine Greenhouse Gas Emissions and Value Chains Between Provinces

China’s economy is changing. Instead of focusing on fast growth, it now aims for high-quality development. To reach its goals for reducing carbon emissions, the country needs to make big changes to its industries and energy systems. It also needs to figure out the best way to adjust these industries. While new technologies can help reduce emissions, the main factor affecting China’s carbon emissions is how quickly and intensely the economy and industries are restructured.

Understanding Greenhouse Gas Emissions Between Provinces

Dr. GU Alun and his team from Tsinghua University in Beijing recently studied how differences in industries between provinces affect greenhouse gas emissions. They looked at both CO2 emissions from burning fossil fuels and non-CO2 emissions. This helped them better understand the patterns and relationships between the value chains and industrial chains in each province.

GU Alun explained, “As China’s economy develops and provinces interact more, greenhouse gas emissions will also flow more between regions. Some provinces might transfer the production of products that use a lot of energy to other provinces to meet their own emission reduction targets. This makes it harder for China to reach its overall carbon goals. That’s why we need to pay attention to the emissions in each province and analyze how their economic development and value chains are connected.”

Strengthening Domestic Value Chains and Economy

The researchers found that in recent years, China’s domestic value chains have gotten stronger, making the country’s economy more resilient. Each province still relies mostly on itself for intermediate products, rather than other provinces. In 2017, the national average for intermediate products coming from within a province was 69.16%, much higher than the 25.34% coming from other provinces. Most of the added value in each province comes from being part of national value chains.

From 2012 to 2017, the transfer of emissions through value chains between provinces became more noticeable. Value chains in Beijing, Tianjin, Shanghai, and Guangdong caused relatively high emissions in other provinces. In contrast, provinces like Henan, Jiangsu, Zhejiang, and Hebei had a larger net transfer of emissions, especially in the North China region. This trend has been getting stronger, particularly in Shanxi and Hebei.

The research team suggests that developed coastal regions should make the most of both international and domestic markets. While participating in global value chains, they should also get more involved in building value chains between provinces within China. They should focus on growing the service industry, which produces less carbon but is in high demand. In central and western provinces, industries and value chains can be developed based on their unique resource advantages. High energy-consuming and low-yield production should be phased out, and advanced technology and experience should be brought in to make these areas more competitive.

This work was supported by the National Natural Science Foundation of China (72140003).

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