Exploring China's Materialization Process with Economic Transition

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Exploring China’s Materialization Process with Economic Transition: Analysis of Raw Material Consumption and Its Socioeconomic Drivers Heming Wang,† Xin Tian,*,‡,§ Hiroki Tanikawa,§ Miao Chang,‡ Seiji Hashimoto,∥ Yuichi Moriguchi,⊥ and Zhongwu Lu† †

State Environmental Protection Key Laboratory of Eco-Industry, Northeastern University, Shenyang, Liaoning 110819, China School of Environment, Tsinghua University, Beijing, 100084, China § Graduate School of Environmental Studies, Nagoya University, Nagoya, Aichi 464-8601, Japan ∥ Department of Environmental Systems Engineering, Ritsumeikan University, 1-1-1 Noji-higashi, Kusatsu-shi, Shiga, 525-8577, Japan ⊥ Graduate School of Engineering, The University of Tokyo, Tokyo, 113-8656, Japan ‡

S Supporting Information *

ABSTRACT: China’s rapidly growing economy is accelerating its materialization process and thereby creating serious environmental problems at both local and global levels. Understanding the key drivers behind China’s mass consumption of raw materials is thus crucial for developing sustainable resource management and providing valuable insights into how other emerging economies may be aiming to accomplish a low resource-dependent future. Our results show that China’s raw material consumption (RMC) rose dramatically from 11.9 billion tons in 1997 to 20.4 billion tons in 2007, at an average annual growth rate at 5.5%. In particular, nonferrous metal minerals and iron ores increased at the highest rate, while nonmetallic minerals showed the greatest proportion (over 60%). We find that China’s accelerating materialization process is closely related to its levels of urbanization and industrialization, notably demand for raw materials in the construction, services, and heavy manufacturing sectors. The growing domestic final demand level is the strongest contributor of China’s growth in RMC, whereas changes in final demand composition are the largest contributors to reducing it. However, the expected offsetting effect from changes in production pattern and production-related technology level, which should be the focus of future dematerialization in China, could not be found.

1. INTRODUCTION The remarkable economic and population growth witnessed during the 20th century was closely coupled to substantial increments in the extraction of natural resources,1 leading to an increasing impact on the environment.2 The case of China provides a timely example of the relationship between economic growth and resource consumption during its economic transition process. Resource consumption in China has risen dramatically over the past decade, with its domestic material consumption (DMC hereafter) covering approximately one-third of global extraction in 2008.1,3 China’s rapid increase of resource consumption has exerted environmental pressure at both the national3−5 and the regional level.6−8 Hence, exploring this spectacular materialization process is crucial for mitigating resource consumption as well as reducing environmental impacts in the country and shaping global policy. Understanding the accelerating rate of resource consumption in China faces two great challenges, however. The first © 2014 American Chemical Society

challenge is derived from the comprehensive and dramatic economic transition in China, which significantly influences the domestic materialization process. China’s economic transition is manifested as, first, industrialization toward heavy industry with resource-intensive sectors.9 Second, the country’s unprecedented urbanization rate, with large-scale population migration and continuous rises in the income levels of city dwellers, has led to great demand for all types of urban services.10,11 This increased demand for dwellings, transportation networks, and commercial as well as public services has accelerated building and infrastructure construction and further swallowed up significant resources.12,13 As shown by the levels of economic development in developed countries over the past 150 years, both industrialization and urbanization in Received: Revised: Accepted: Published: 5025

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China will continue for the foreseeable future.14 Hence, exploring how this long-term economic transition influences resource consumption is crucial for formulating effective and efficient policy on saving natural resources. The second challenge lies in selecting an appropriate method for calculating resource consumption in China, as different methods target different issues and lead to diversified policy direction. DMC, calculated as the sum of the domestic extraction of raw materials and total physical imports minus total physical exports,15 is a widely accepted indicator in both developed and developing countries.3,4,16−23 By generating highly aggregated information, the use of this indicator allows us to easily and directly examine resource consumption conditions.24 However, the DMC method has been criticized for including two incoherent parts, namely the domestic extraction of raw materials/biomass and physical imports/ exports, which present a mixture of raw materials and manufactured products.25 Consequently, a decrease in DMC can be simply achieved by substituting domestically manufactured products with imported products, because the total weight of raw materials needed to produce manufactured products is usually much greater than the weight of the products themselves. In addition, DMC only indicates the apparent consumption of resources and materials rather than total materials embodied in products. In order to overcome these disadvantages, another indicator has been developed, termed raw material equivalents (RME).15,26 The RME of a product comprises the sum of all extractions of raw materials that are consumed through the product’s entire production chain.27 With regard to imports and exports, RME quantifies all the raw materials needed to produce imported/exported commodities. Hence, another indicator that is similar to DMC, raw material consumption (RMC), has been introduced. RMC, which equals the domestic extraction of raw materials plus the RME of imports minus the RME of exports, measures the raw materials induced by the final domestic consumption of products.27 While DMC accounting methods have been standardized by Eurostat,15,28,29 the calculation of RME and RMC differs by research studies. Input-output (IO) models are the most common method of estimating RME and RMC. Of these, multiregion IO (MRIO) models have been used for estimating the RME of imports based on the actual technology levels of producing countries.30−32 However, MRIO models require the large-scale manipulation of data and offer relatively aggregated sectoral information compared with single region IO (SRIO) models.30 On the contrary, SRIO tables provide more information on sectoral transactions, but the RME of imports is estimated under the domestic technology assumption.25 To overcome this shortcoming, a hybrid lifecycle assessment method is adopted to calculate the RME of imports for certain materials and commodities for which production technology cannot be properly represented in the studied economy. However, given the shortage of lifecycle inventory data, this method has only been applied to very few materials in previous studies.25,27,33 Hence, the use of IO models largely depends on the specific research objectives of the study in question. Against the background of industrialization and urbanization in China, because we aim to understand the intersectoral influence of industrial structure changes on RMC, a single (i.e., national) IO table that has more sectoral information is suitable for this analysis. Moreover, given China’s status as the world’s factory and that most of its imported materials and

commodities can be produced domestically, particularly the large import categories of fossil fuels and metal ores, an SRIO model was selected herein to calculate China’s RME and RMC. Methodologically, we use structural decomposition analysis (SDA) in order to divide resource consumption into the socioeconomic driving forces needed for policy analysis.34 While early applications of SDA focused on changes in primary energy consumption and CO2 emissions,35−37 few of these studies applied SDA to material flow and RMC analysis.33,38,39 Indeed, the present study is the first to apply SDA to China’s RMC variations in order to help policymakers understand how the economic transition influences the materialization process. Another feature of this study is, to our best knowledge, that our derived domestic extraction data, which were calculated following the 2009 Eurostat guidelines,29 cover more than 240 types of resources at the most differentiated level. Further, even though the case study presented herein was carried out in China, our findings on the changing resource consumption patterns in the country may be generalizable to other developing countries whose development paths are likely to be similar.

2. METHOD AND DATA 2.1. RMC Calculation. Under the IO model, sectoral RME can be expressed mathematically as40 e = F (1 − A)−1y = FLy

(1)

where e stands for the RME of the products included in each vector of y; F is the environmental extension matrix per unit of output,27 and in this study it is regarded as the material intensity of sector i, which equals raw materials extracted domestically by sector i divided by its total output;30 I is the identity matrix; A = (aij) is the coefficient matrix, in which aij represents the input demands of sector i to produce one unit of output in sector j; L = (I-A)‑1 is the Leontief inverse, whose elements (bij) represent the amount of output generated in sector i per unit of final demand for the output of sector j; and y is the vector of sectoral final demand. y refers to different final demand categories such as rural and urban household consumption, government consumption, investment, exports, and imports, while e refers to the RME of rural and urban household consumption (RMEhc), the RME of government consumption (RMEgc), the RME of investment (RMEin), the RME of export (RMEex), and the RME of import (RMEim). In line with the conception of RMC, sectoral RMC can be calculated by RMC = FLyd

(2)

where y d refers to domestic final demand including consumption, investment, and import but minus export. Then, RMC equals RMC = RME hc + RMEgc + RME in + RME im − RMEex (3)

When calculating the matrix of F, domestically extracted resources are generally attributed to the individual economic sectors that extracted them. However, for construction minerals (e.g., sand and gravel, clays and kaolin, and limestone), as their unit prices and sales structures are significantly different from other nonmetallic minerals,25 this distribution method may lead to a much higher RME of imports (see Section S4 in the Supporting Information (SI)). Moreover, as construction 5026

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3. RESULTS 3.1. Overview of Material Flows in China. We found that China’s RMC rose by 71.6% from 11.9 billion tons in 1997 to 20.4 billion tons in 2007, which represented an average annual growth rate of 5.5% (Figure 1). Compared with the moderate increment during the 1997−2002 period (0.4 billion tons), a much sharper growth in RMC was observed for the 2002−2007 period (8.1 billion tons).

minerals are rarely consumed by other sectors, we regarded construction minerals as being directly extracted by the construction sector in this study. 2.2. Structural Decomposition Analysis. SDA is a useful approach to quantify the contributions of various driving forces to the variation in physical flows over time. It allows us to not only divide RMC into the components of interest based on actual demand but also describe how sectoral effects influence these driving forces.34,35,41 In other words, SDA helps policymakers identify the most important factors that increase or reduce RMC as well as formulate effective dematerialization policies. We can further transform eq 2 by dividing yd into ydc and ydl

e = FLydc ydl

(4)

where ydc is the composition of domestic final demand whose elements stand for the relative proportion of sectoral demand to total demand, and ydl represents the domestic final demand level. By considering the changes in each variable over time, the SDA of eq 4 can be expressed as Δe = ΔFLydc ydl + F ΔLydc ydl + FLΔydc ydl + FLydc Δydl

Figure 1. RMC development in China, 1997−2007. (5)

Of the 8.5 billion tons RMC increment during the 1997− 2007 period, approximately 73.6% (6.3 billion tons) of the increase came from nonmetallic minerals, which not only represented a growth factor of 1.8 but also showed a five percentage point increase in its proportion of total RMC (from 62.0% in 1997 to 66.8% in 2007). Fossil fuels, whose proportion of total RMC increased from 13.9% to 15.1% in the given period, contributed to approximately 16.7% of the total rise in RMC at a similar annual growth rate to that of nonmetallic minerals (a factor of 1.8). Iron ores and nonferrous metals contributed 9.1% and 2.7% of the RMC increment, respectively, because of their relatively small proportions in total RMC (5.9% and 1.7% in 2007) but at higher growth rates (factors of 2.8 and 3.3). In contrast to the growth trend for the other three material groups, biomass showed a slight decrease (by 7.7%) in the given period, with a marked decline in its proportion from 19.6% to 10.6%. Since entering the WTO in 2001, the international trade activities between China and its partners have become more and more significant, and a huge amount of raw materials is embedded in these trade flows. As the main difference between DMC and RMC lies in the accounting of physical trade flows, it is interesting to compare them for China according to their components and aggregated raw material categories (Figure 2). From this comparison, it is surprising to find that in 2007 only a relatively small difference existed between RMC and DMC; China’s RMC was only 0.3 billion tons (which accounted for 1% of RMC) less than DMC. The main reason for this similarity was that the RME of imported products (RMEim) minus the RME of exported products (RMEex) almost equaled the amount of imported physical products minus that of exported physical products. Although the total volume of RMEim was similar to that of RMEex, these categories have diversified structures in terms of resources. China typically imported a large amount of raw materials (e.g., iron ores, crude oil) compared with its level of exports, whereas its exports comprised a large amount of manufactured and semimanufactured commodities, which

where the first term represents the changes in RMC − Δe − due to aggregated changes in F; the second term represents the contributions of the changes in the production structure, L; the third term represents contributions of the changes in domestic final demand composition, ydc; and the fourth term represents the effects of the changes in domestic final demand level, ydl. One challenge when performing SDA is that the uniqueness of starting points will lead to diversified possibilities.42,43 Given that all decomposition alternatives are equally valid, we average all possible decompositions based on approaches taken by previous studies.35−37,42 For a decomposition with n factors, there are thus n! possible decompositions.42 2.3. Data Preparation. Domestic extraction data provided the basis for the RMC calculation. As noted in the Introduction, we included more than 240 types of resources in China’s domestic extraction. For the ease of the presentation of the results and comparison of all indicators, the materials that composed the indicators were aggregated into four broad categories: biomass, metallic minerals, nonmetallic minerals, and fossil fuels. As China’s consumption of metallic minerals has increased significantly compared with the other three subcategories since the end of the last century,3,44 and metallic minerals are closely related to industrialization, we further divide this category into iron ores and nonferrous metal minerals (simplified to “nonferrous metals” in the following sections). Detailed information on how to collect resource data is included in Section 1 of the SI. China publishes IO tables every five years.45 In this study, we used the 1997, 2002, and 2007 tables compiled by the Chinese National Statistical Bureau. As both the numbers and the content of sectors were inconsistent among these tables (124 sectors in 1997, 123 in 2002, and 135 in 2007), we aggregated all sectors into 101 integrated ones (see Section S2 in the SI). In order to remove the effect of deflation, we also converted current prices into 2002 constant prices by using the double deflation method.46,47 The price indexes were derived from the price sections of China’s Statistical Yearbooks. 5027

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period. By contrast, through industrialization, manufacturing sectors played slightly growing roles in total RMC. Approximately 8.4% of the RMC increase was from resource-related products, machinery, and electric and electronic equipment, while the mobility sector (manufacturing of transport equipment and transport services) contributed another 3.4% of the total RMC increment during the investigated decade. Sectoral contributions to RMC changes over time varied significantly by material type. For the biomass category, the agriculture and food sectors together contributed 63.0% of the total amount in 2007, but the decline in agriculture (0.5 billion tons) resulted in an overall reduction in biomass consumption in the 1997−2007 period (despite the growing importance of services in this regard). As for the RMC of fossil fuels, construction and services were the top two sectors in 2007 (37.1% and 17.1%, respectively) and these also accounted for 59.9% of consumption growth in this category. Further, although the proportions of resource-related products, machinery, electric and electronic, and mobility were less notable in total fossil fuels consumption, these sectors led to rapid rises in the given period. With regard to the changes in iron ores and nonferrous metals, construction contributed 49.4% and 28.7% of consumption growth in the 1997−2007 period, respectively. Services and several heavy manufacturing sectors such as machinery, mobility equipment, and electric and electronic equipment also played a notable role, as metals provide the basis for services infrastructure and the production of manufacturing sectors. Moreover, approximately 88.1% and 87.6% of the increment in iron ores and nonferrous metals were concentrated in these sectors. As for the RMC of nonmetallic minerals, the importance of the construction sector was even more apparent, accounting for over 90% in the given period (up to 97.3% in 2007); the services sector was the second largest contributor (3.6% and 1.8% in 1997 and 2007, respectively). One main reason for this phenomenon is that sand and gravel account for more than 97% of China’s nonmetallic minerals, and their extraction is directly induced by the construction sector. 3.3. Contributions of Final Demand Categories. Our results highlight the prominent role played by investment activity in China’s RMC (Figure 4 and Figure S2), which doubled from 8.6 billion tons (72.1%) in 1997 to 16.6 billion tons (81.4%) in 2007. Moreover, approximately 94.4% of the increment in RMC was caused by investment activity. The

Figure 2. Comparison between the RMC and Central Economic Wide-Material Flow Analysis indicators, China, 2007. DE refers to the domestic extraction of raw materials used in the economy; Imports and Exports refer to the physical amount of imports and exports, respectively. The data on DE and DMC are derived from Wang et al. work.3

usually contained different upstream resource inputs compared with imports. Moreover, the gaps between RMEim (RMEex) and imported (exported) physical products were clear to see. In 2007, RMEex and RMEim is 6.9 and 3.6 times the size of their direct physical flows, respectively. 3.2. Sectoral Contributions. As shown in Figure 3 and Figure S1, the construction sector dominates total RMC in

Figure 3. Sectoral contributions to changes in RMC in China, 1997− 2007.

China. Construction accounted for 87.2% (7.4 billion tons) of the total rise in RMC during 1997−2007 and 74.7% of China’s RMC in 2007 (up from 65.7% in 1997), reflecting the spectacular growth in the consumption of resources by construction activities. By contrast, the impacts of all other sectors were relatively small. Services as a whole contributed 5.6% (0.5 billion tons) of the total RMC increment. In particular, its absolute material consumption volume increased rapidly (by a factor of 1.6) during this decade, while its proportion of total RMC reduced slightly from 6.5% in 1997 to 6.1% in 2007. A stronger decreasing trend in the proportion of total RMC was found for agriculture (from 12.3% to 4.2%) and food (from 6.0% to 3.9%), with the former sector the main driver for the RMC reduction (0.6 billion tons) in the given

Figure 4. RMC by domestic final demand category, China, 1997− 2007. 5028

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effect of urban household consumption (12.2% of the RMC increase) also nearly doubled, from 1.3 billion tons (10.5%) to 2.3 billion tons (11.2%) in the 1997−2007 period, in contrast to rural household consumption, which decreased from 1.7 billion tons (13.9%) to 0.9 billion tons (4.5%), reflecting the strong influence of urbanization in China. Figure 4 also illustrates the RMC trend for each material group by domestic final demand category. For rural and urban household consumption, biomass and fossil fuels are the top two consumed material groups; however, while the proportion of biomass declined rapidly, that of fossil fuels increased slightly during the 1997−2007 period. In addition to fossil fuels, iron ores and nonferrous metals also increased their proportions dramatically because of the huge demand for private automobiles and household electrical appliances in China. Nonmetallic minerals were the third largest group in terms of the two final demand categories and their proportion declined in rural household consumption but increased in urban household consumption. The structure of RMC for government consumption and investment differed from that for rural and urban household consumption. For the former, fossil fuels, nonmetallic minerals, and biomass were the main contributors. Nonmetallic minerals decreased their proportion markedly from 40.1% to 22.2%, whereas biomass and nonferrous metals almost doubled their proportions during 1997−2007. For the latter, nonmetallic minerals increased quickly and dominated the total amount, but their proportion decreased slightly. Fossil fuels, the second largest contributor, increased their proportion from 9.5% to 11.2% by doubling their consumption amount in the given period. Iron ores and nonferrous metals more than tripled their consumption amounts and nearly doubled their proportions. On the contrary, biomass halved its proportion with its consumption remaining stable.

Figure 5. Contributions of the key socioeconomic forces driving changes in RMC in China, 1997−2007.

this income growth effect can be greatly offset by the optimization of the consumption structure. Compared with the significant contribution of consumption pattern trend, the influence of the production pattern trend is negligible. While the improvement in production-related technology level (aggregated changes in F and L) accounted for a considerable proportion of the decrease in RMC (1.7 billion tons) during the 1997−2002 period, a significant increment (4.2 billion tons) occurred in 2002−2007, reflecting the overall failure of China’s policy on improving the use efficiency of natural resources in the study period. Figure 6 illustrates the impacts of these four socioeconomic driving forces based on internal changes by sector and material group during 2002−2007, the period of the greatest changes in RMC. Of the studied driving forces, a 3.9 billion tons increase in RMC was associated with changes in material intensity, with the construction sector playing a dominant role (3.6 billion tons, 93.1%) in this rise, notably nonmetallic minerals (3.4 billion tons). Moreover, although production structure influenced the consumption of each material group considerably, the total contribution of production structure change was low (0.3 billion tons increment) because of the offsetting effect among sectors and material groups. For instance, production structure change led to a moderate decline in biomass (0.2 billion tons) and nonmetallic minerals (0.2 billion tons) consumption owing to the offsetting effect between construction and services. Moreover, while production structure change in the construction sector reduced biomass consumption by 0.3 billion tons, that in the services sector increased biomass consumption by 0.1 billion tons. By contrast, for nonmetallic minerals, production structure change in services reduced nonmetallic minerals consumption by 0.3 billion tons but increased it by 0.1 billion tons in the construction sector. The RMC of the other three material groups was increased by production structure change. Services and construction dominated this rise for fossil fuels (148.2%), iron ores (81.9%), and nonferrous metals (124.9%), while that machinery also played an important role for iron ores (11.1%). In addition, production structure changes in several heavy manufacturing sectors (resource related products, electric and electronic equipment, and transport equipment) together led to a 36.8% reduction for fossil fuels,

3.4. CONTRIBUTIONS BY TRENDS IN PRODUCTION AND CONSUMPTION PATTERN The SDA employed herein allows us to understand the contributions of the four important socioeconomic driving forces identified earlier. Of the four factors, domestic final demand level (ydl) and domestic final demand composition (ydc) are closely related to the consumption pattern, while the material intensity of sectors (F) and production structure (L) together reflect the characteristics of production pattern and the production-related technology level. Hence, we can further understand the effects of changes in both consumption and production patterns owing to the economic transition in China from the RMC variations in these four factors. During the 1997−2007 period, the great impact of the consumption pattern trend on the RMC variations was clear (Figure 5). The growing domestic final demand level (ydl) was the strongest contributor toward the RMC increment, and this resulted in RMC growth of 11.8 billion tons (138.1% of the total variation) in the given period. This finding suggests that affluence and the substantial improvement in income levels have played a significant role in accelerating China’s RMC. By contrast, the changes in domestic final demand composition (ydc) were the largest contributor to reducing China’s RMC over the 1997−2007 period (5.7 billion tons decrease), and these offset approximately half of the increment caused by the growth in the domestic final demand level. This finding suggests that China’s material consumption has greatly increased alongside Chinese people’s income growth and that 5029

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Figure 6. Sectoral contributions to the RMC changes caused by changes in the four driving forces in China, 2002−2007.

tons were caused by construction activities in 2007, approximately 0.19 million hectares of farmland were transformed into construction land,48 and 60% of completed construction area was used for real estate in 2007.49 Furthermore, increasingly investment in urban infrastructure encourages more and more rural people to move to cities. Indeed, over 20 million rural residents did so in 2007,50 placing additional demand on the infrastructure, dwellings, and related services in urban regions. Moreover, the urban:rural population ratio was only 0.47 in China in 1997,50 while that of urban household RMC to rural household RMC was 0.75; however, by 2007, the former had increased to 0.8550 and the latter to 2.5. This trend is set to continue, with the proportion of urban population predicted to increase to 65.4% (urban: rural population = 1.9) by 2025.51 Considering its large population and relatively low development stage, urban households in China tend to have much higher incomes and consumption levels and thus higher RMC. Nonetheless, industrialization, characterized by structural change toward heavy manufacturing sectors,9 has also led to significant RMC growth. Heavy manufacturing sectors such as the production of metals and nonmetallic products and the manufacturing of machinery, automobiles, and electric and electronic equipment were important contributors to China’s

indicating the technological advances and organizational improvements in these sectors in terms of fossil fuels. For the changes in domestic final demand composition, the construction sector, again, played a dominant and positive role in decreasing China’s RMC for all material groups (4.4 billion tons, 98.0%). In addition, agriculture (0.6 billion tons), mining (0.2 billion tons), and services (0.1 billion tons) decreased China’s RMC, while food processing and manufacturing (0.2 billion tons) increased it. As for changes at the domestic final demand level, all sectors contributed to increasing China’s RMC, notably construction (6.9 billion tons, 82.4%).

4. DISCUSSION China’s economic transition greatly influences its materialization process, especially if we connect this process with the urbanization and industrialization seen in the 2002−2007 period, during which the average annual growth rate of RMC reached 10.6%. Of these two influencing factors, urbanization is the predominant driving force behind increasing RMC, characterized by the rapid increase in urbanization-related investment, notably in the construction sector (e.g., infrastructure, real estate), and rises in urban household consumption. Of the 16.6 billion tons increase in RMC due to investment, 15.0 billion 5030

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presented results. This approach might also remind other developing countries to consider intersectoral impacts when promoting the rapid development of services sectors as a means of economic development.

RMC increment (see Figure 3). Moreover, the rapid development of manufacturing sectors further accelerated the development of construction activities. For instance, approximately 20% of completed constructions were used as factory buildings in 2007.49 Although this proportion is much smaller than that of real estate buildings, the indirect effect on China’s growing RMC is considerable. In the 12th Five-Year Plan (2011−2015) of China,52 manufacturing sectors such as mobility, wind power equipment, and aviation equipment were given high priority, and thus their potential impact on future RMC should be paid more attention. With regard to dematerialization in the Chinese economy, the presented findings imply that the change in final demand composition played a significant and positive role in decreasing China’s RMC, whereas the changes in production pattern and production-related technology level did not during 1997−2007. Further, the comparison of raw material intensity (RMC/GDP) between China (6.6 tons/1000 US dollars at 2005 constant prices in 2005) and the EU (0.6 tons/1000 US dollars)27 highlights that improving material efficiency is an urgent target for lowering RMC (see Section 6 in the SI). Considering the overcapacity of the main basic materials production industries (e.g., steel, cement, plate glass), we can expect a transition from these high resource-consuming industries to less resourceconsuming alternatives. In addition, the overall technological and efficiency level of material use in China is still low relative to that in developed countries, and the Chinese government has set targets and related policies for improving this indicator in its 11th and 12th Five-Year Plans,52 especially the use of fossil fuels. We can thus regard changes in production pattern and production-related technological advances as another focus for future dematerialization. In this direction, the Chinese government has set the following three policy directions for changing the country’s industrial structure toward a dematerialization society: (i) increasing the proportion of services sectors, (ii) developing high-tech industries, and (iii) restructuring resource- and pollution-intensive industries.52 Further, as noted above, it has targeted a 20% improvement in energy intensity between 2005 and 2010 as well as a mandatory 16% reduction in energy intensity and a voluntary 15% improvement in resource productivity between 2010 and 2015. In 2008, China’s Circular Economy Promotion Law was also passed with the main aim of reducing China’s material (and mainly energy) intensity.53 Hence, China has set a good example for other developing countries for ways in which to reduce energy intensity. As China is moving toward a tertiary economy, services are taken as important solutions for dematerialization. However, our results indicate that services actually cause a considerable rise in RMC through changes in both production pattern when providing services and final demand level when consuming services. Indeed, while the DMC for services is relatively small, large services-related RMC comes from indirect effects through intersectoral and supply chain impacts. However, as the contribution of the tertiary industry to China’s economy is expected to grow from its current relatively low level (45.6% in 2012),50 it would be greatly important to consider the intersectoral impacts and avoid indirect consumption through supply chains when formulating strategies and policies for services development. In particular, improving the standard for the RME embodied in upstream products through lifecycle management as well as the production structure of services sectors might promote dematerialization based on the

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ASSOCIATED CONTENT

S Supporting Information *

Additional text and tables. This material is available free of charge via the Internet at http://pubs.acs.org.

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AUTHOR INFORMATION

Corresponding Author

*Phone: +86-10-62780478; +81-52-789-3840. Fax: +86-1062780478; +81-52-789-3840. E-mail: [email protected]. Notes

The authors declare no competing financial interest.

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ACKNOWLEDGMENTS This work was in part supported by the Environment Research and Technology Development Fund (S-6, K113002) of the Ministry of the Environment, Japan, Chinese Ministry of Education Project of Humanities and Social Sciences (13YJCZH172, 13YJC790106), National Natural Science Foundation of China (71373003, 41301643), and Fundamental Research Funds for the Central Universities (N120302004).

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