The nexus between industrial growth and electricity consumption in China – New evidence from a quantile-on-quantile approach

The inconsistency of growth rate in industrial and its electricity consumption in China has attracted the global attention. This study uses a novel quantile-on-quantile approach to reveal the complicated and seemly inconsistent relationship between China's industrial growth and its electricity consumption from 1995 to 2017. Empirical results show: (1) generally, a positive correlation exists between industrial growth and its electricity consumption. However, the strength of that correlation depends highly on the level of industrial electricity consumption and industrial development, thereby causing variations in the relationships at different periods and regions. (2) During the middle period of industrialization, a strong relationship is observed. Then, it gradually weakened with the steady growth of industry and high electricity consumption. (3) From a regional perspective, the positive correlation in eastern China changed from strong to weak, while a “high-low-high” trend transpired in northeastern China. The relationship was stable in central China during the sample period. (4) The main reason for the above results is the different characteristics of the industrial transfer and industrial structure upgrading across regions. •Industrial growth positively correlated with electricity consumption.•The strength of that correlation depends highly on the level of industrialization.•The correlation is heterogeneous across regions.•Industrial transfer and industrial structure upgrading paly an important role.