Policies for eliminating low-efficiency production capacities and improving energy efficiency of energy-intensive industries in China

China faced the greatest challenge in balancing its economic growth, energy and resource security as well as environmental pollution. The energy-intensive industries, which used to be the major force driving China׳s economic growth, had seriously exhausted the countries׳ natural resources and energy, and at the same time polluted the environment because of the severe surplus of low-efficiency production capacities. As a result, the Chinese government had initiated multiple economic and administrative policies to eliminate these low-efficiency production capacities intended to improve the energy efficiency of energy-intensive industries. These policies are summarized in this paper, along with export tax rebating rate, resource tax, administrative audit and approvals, differential electric power pricing and shutting down the low-efficiency production capacities. The paper also evaluates the effects of these policies by analyzing several key indicators about the energy-intensive industries, including fixed asset investment growth rate, energy-intensity of industrial added-value, waste gas emission-intensity of industrial added-value. The VALDEX methodology is selected to examine the improving trends of energy-efficiency for energy-intensive industries. The analyzing results show that firstly the development of low-efficiency capacities tends to be more sensitive to the policies, so the policies that China had enacted really exert very important effects on improving the energy-efficiency of energy-intensive industries. However, the effects of economic policies seem more faster and obvious than the fiscal policies. Besides, the results also show that polices which are designed to reserve energy may not necessarily exert the same effects on reducing emissions. There is still large room for improving the energy efficiency of energy-intensive industries, substantial improvement still needs to be done for current policies’ system. Some suggestions for future work are provided.