Energy Consumption Linkages of the Chinese Construction Sector

Abstract

The purpose of this paper is to explore the relationships between the construction sector and the rest of the Chinese economy in the energy consumption as it is crucial in energy consumption of the whole economy. Therefore, this paper uses the Modified Hypothetical Extraction Method (MHEM) to quantify the linkages of energy consumption in 2002, 2005, 2007, 2010, 2012, 2015, 2017 and 2018, providing a new perspective for energy consumption linkage studies in China. In this paper we discover the volumes and paths of energy consumption net flows from other blocks to the construction sector and identify the key energy suppliers of the construction sector. The empirical findings show that the indirect energy consumption exceeded the direct energy consumption between 2002 and 2018, representing more than 90% of total (direct plus indirect) energy consumption of the construction sector. Between 2002 and 2018, the indirect energy consumption of the construction sector increased from 27,579 to 111,760 × 104 tons of coal equivalent (tce). We further find that the construction sector has the largest inflows of energy consumption to obtain its own demand than other sectors from 2002 to 2018. The average annual energy consumption net flows from other seven sectors to the construction sector were 1477, 687, 47,998, 6067, 1483, 7362 and 1923 × 104 tce in 2002–2018, respectively. Moreover, we find that the Manufacturing sector is the largest energy supplier of the construction sector between 2002 and 2018.