The Effects of Industrial Upgrading on Energy Intensity: Evidence from China

Abstract: This article investigates the impact of industrial upgrading on energy intensity, using panel data from 282 prefecture-level cities in China from 2007 to 2020. The empirical results demonstrate that both industrial rationalisation and advancement contribute to reducing energy intensity. The effects exhibit heterogeneity across geographic regions and policies, with a more significant impact observed in larger markets, the eastern regions of China, cities with lower levels of digital economy development and cities not covered by the low-carbon city policy. These findings suggest that policymakers should focus on expanding the tertiary sector and promoting the integration of services and manufacturing to reduce energy intensity. Moreover, addressing the noticeable regional disparities with targeted policies is essential.