World Energy Outlook 2007

central government and the CPC retain powers of strategic direction over key
sectors, including energy. Over the past 25 years, the private sector has grown,
state enterprises have gradually become more managerially independent and
authority over smaller enterprises has been devolved to local governments.
The Economic Context
Economic Structure and Growth 2
Growth in China’s real gross domestic product averaged a phenomenal 9.8% per
year since 1980, accelerating to around 11% in 2006 and the first half of 2007.
In purchasing power parity (PPP) terms, the Chinese economy was the secondlargest
in the world in 2006, with GDP of $10 trillion, or 15% of global GDP
(see Box 3.1 in Chapter 3). At market exchange rates, it was the fourth-largest
economy, accounting for 5.5% of world GDP – just behind Germany in 2006.
China’s per-capita GDP is still low, at around one-quarter of the OECD average
(measured in PPP terms). Economic growth has reduced poverty dramatically
by raising personal incomes. Industrialisation has been the main source of
growth. In 2006, industry contributed 49% of China’s GDP, an increase of four
7
Figure 7.1: Sectoral Share of GDP, 2004
100%
80%
60%
40%
20%
0%
China India Middleincome
countries*
Japan
United
States
Euro
area
Industry
Services
Agriculture
*An exact definition can be found at: http://go.worldbank.org/D7SN0B8YU0.
Source: World Bank (2007a).
2. The macroeconomic assumptions underpinning the Reference, Alternative Policy and High
Growth Scenarios are outlined in Chapters 9, 11 and 12 respectively.
Chapter 7 - Political, Economic and Demographic Context 245