Different from many studies on Energy Kuznets Curve, this paper does not directly consider income factor but conducts a nonlinear study on per capita primary energy consumption and electricity consumption in China, whose economic development is considered investment-driven, in which government macroeconomic policies, especially government expenditure plays a very important role. In particular, this paper attempts to compare the different impacts of government expenditures and the other influencing factors on energy consumption. Based on the results of the threshold regression, in the future, with the further development of the economy, the driving force of labor population growth will slow down. Comparing with primary energy, the relationship between electricity consumption and its influencing factors will change later, and the difference in the effects of the influencing factors is mainly reflected in the formation of capital stock (investment) and the development of urbanization. Government expenditure on private goods may not be always as inefficient in energy consumption and cleaner production as previously thought in the literature. Meanwhile, the growth of government expenditure on public goods will become a powerful driving factor which indicates that the government needs to assess its overall impact on energy consumption and energy efficiency when participating in the provision of public goods. The paper also found that when studying the issue of energy consumption and regional differences in China, the geographic classification of eastern, central and western regions may not be appropriate. Grouping according to energy consumption levels may be one of the better options. And the distribution of energy consumption levels in China’s provinces is consistent with the distribution of government expenditure levels. The estimation results also provide us with important policy implications: the government expenditure in education is of great importance, and it can produce a strong energy-saving effect through technological progress.

Introduction

The rapid growth of China’s energy consumption in recent decades is linked to the rapid growth of the economy. At the same time, an important feature of China’s economic development is investment-driven, in which government macroeconomic policies, especially government expenditure, plays a very important role. According to World Bank statistics (WordBank, 2019), as shown in Figure 1, the intuitive feeling is that China’s large-scale expansion of government expenditure since 1978 has been accompanied by rapid growth in energy consumption (Wang and Lin, 2019). Figure 1 demonstrates that the growth of government expenditure and capital formation is highly volatile. For example, in 1984, 1992 and 1999, there was a sharp growth in government expenditure around these years. These years are also years in which the private sector is also encouraged to invest to expand domestic demand. During such years, energy consumption, especially electricity consumption, seems to have strong consistency with these variables.