World Energy Outlook 2007

percentage points over 2001. 3 In 2004, industry’s share was markedly higher
than that of other middle-income, developing and OECD countries
(Figure 7.1). The services sector accounts for 39% and agriculture for 12%.
The Chinese economy has become increasingly integrated into the world
economy, particularly since China’s accession to the World Trade Organization
(WTO) in 2001. China’s shares of world trade and foreign direct investment
(FDI) have accelerated within the last five years. China is the world’s thirdlargest
trader, after the United States and Germany, with the sum of imports
and exports reaching $1.8 trillion in 2006. China is the leading destination for
FDI, with inflows amounting to $108 billion (see Figure 3.5 in Chapter 3). Its
share of global steel production doubled to 31% between 2000 and 2005,
while its share of world telecommunications equipment jumped by
14 percentage points to 20% (Table 7.1).
Table 7.1: China’s Importance in the World Economy
(% of world total)
1980 1995 2000 2005
GDP (2006 $ PPP) 3.2 9.1 11.3 14.5
GDP (market exchange rates) 2.9 2.5 3.8 5.0
Trade 0.9 2.7 3.6 6.7
Foreign direct investment* 1.0 13.0 7.0 12.0
Ammonia production 17.0 27.0 29.0 30.0
Steel production 8.2 13.0 15.5 31.2
Cement production 9.0 33.6 37.4 46.6
Telecommunications equipment – – 6.7 20.4
*Includes Mainland China and Hong Kong.
Sources: IEA Secretariat calculations based on IMF, CEIC, ADB, IISI, UNCTAD and WTO databases.
The increase in China’s own domestic consumption and investment,
relocation of many manufacturing processes from other parts of the world to
China, and burgeoning exports all underpin the dramatic increase in the
production of energy-intensive goods. China benefits from having cheaper
labour, lower land costs and faster factory construction than most other
countries. China’s sheer market size also gives rise to economies of scale in the
production and distribution of goods. The surge in cement production reflects
a rise in the rate of fixed investment in infrastructure and real estate, which has
3. China’s National Bureau of Statistics (NBS) revised GDP statistics sharply upwards in January
2006, on the basis of the findings of the 2004 Economic Census. It was the first time that a
comprehensive survey of the non-agricultural economy was carried out, raising the estimate of GDP
by 17%. The share of the services sector in GDP was also revised upwards.
246 World Energy Outlook 2007 - CHINA’S ENERGY PROSPECTS