China Update

Yesterday, I attended the China Update at ANU. One of the benefits of attending is getting a copy of the book produced for the conference which I am looking through at the moment. Not all chapters were presented at the conference and not all conference papers are in the book.

I was most interested in three topics discussed at the update and in the conference book: Calls from China-based researchers for more democracy and better governance in China; discussion of China's entry into the "turning period" in the Lewis model of dual economic development; and ZhongXiang Zhang paper on "Assessing China's Energy Conservation and Carbon Intensity".

The need for more democracy was presented as crucial for handling vested interests and relations between local and national government. Papers/chapters by Ross Garnaut, Kong et al. on "The Global Financial Crisis and Rural-Urban Migration", and Tyers among others dealt with the turning point issue. Since 2004 real wages and the real exchange rate have appreciated as surplus labor in the countryside has been exhausted. During 2008-9 wages of migrant workers in cities continued to increase as unemployed workers returned to the countryside and primarily took up part time work in agriculture.

ZhongXiang Zhang largely agrees with Frank Jotzo and myself that China's target of reducing carbon intensity by 40-45% between 2005 and 2020 is ambitious but feasible. He calculates that the target implies a greater reduction in intensity than embodied in the World Energy Outlook 2009 projection. But he argues that China should do even more than this, cutting emissions intensity by 46-50% by 2020. We do not see the WEO 2009 projection as a BAU scenario in any way because, as Zhang points out, it contains all the energy efficiency measures that China had already proposed by 2009 and as Zhang agrees it is unlikely that energy intensity could improve as fast in 2005-2020 as it did between 1980 and 2000. We believe that the 40-45% target could already be quite hard to achieve.

On a related theme, an interesting article from Giles Parkinson on China's climate/clean energy strategy.