Industrial Digitalization and Energy Intensity: Evidence From China’s Manufacturing Sector

Abstract

The Chinese manufacturing sector has undergone an accelerated digital transformation. This study examines the impact of industrial digitalization on energy intensity in China. Energy intensity is negatively correlated with digitalization in terms of time trends, cross-sectional differences, and correlation coefficients. Our empirical analysis shows that industrial digitalization significantly increases the energy intensity of the manufacturing sector. With digital transformation, energy intensity first increases and then decreases, yielding an inverted-U–shaped relation. In 2019, more than 80% of the industries had a degree of digitalization below the inflection point.