Electricity consumption

While the added value of the industrial sector grew 6.1 percent, the industrial electricity consumption showed negative growth of 1.4 percent, according to the statistics. Some people argued that since the two figures didn't match, the GDP growth number must have been fiddled.

It's true that industry is the largest consumer of electricity, but using electricity consumption to judge economic growth is only effective in the industrial sector. When the tertiary industry is involved, the method is not so effective.

Even when judging industrial growth, we should know that although electricity consumption has a direct bearing on production, it is not so simple with added value.

As we have known, added value mainly consists of four factors. One of them is wages. When electricity consumption drops, but wages rise, production may drop, but the added value will rise.

Besides, part of the production calculated in the GDP last year was actually inventory from the previous year. This part of production didn't consume any electricity in 2015.

Industries with extensive energy consumption halted part of their production amid national economic restructuring. This also resulted in the decrease in electricity consumption.

Now, let's look at the general economic situation. The industrial sector is not the only factor that leads to GDP growth. Consumption, for instance, is also involving without increasing electricity consumption.

This is the first part of a two-part opinion piece. The second part will be published tomorrow.

Xia Changjiang is a senior economist who used to participate in government statistics and economic research projects.

The article was translated by Chen Xia. Its unabridged version was published in Chinese.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.