Growth in China's electricity consumption
According to the International Energy Agency, electricity demand in China's economy will grow to 10,498 TWh by 2025, more than double US demand of 4,475 TWh.
Growth in China’s electricity consumption.
According to a forecast from the International Energy Agency, electricity demand in China’s economy will grow to 10,498 TWh, more than double US electricity needs of 4,475 TWh, by 2025. China will consume five times more electricity than the European Union (2,692 TWh) in 2025. India is gradually catching up with the EU on this measure, consuming 1,734 TWh next year.
This chart shows the real size of China’s economy, which is in fact almost twice as large as America’s. Energy consumption is directly linked to the volume of output in an economy. Rising electricity consumption drives higher labour productivity and therefore greater output. Over the past 30 years the world has seen China’s economy grow at a frenetic pace. Measured by nominal GDP, the US economy is worth $26.9 trillion and China’s $19.4 trillion. Gross domestic product (GDP) is the market value of all goods and services produced and consumed in a country in a year.
But nominal GDP should not be confused with GDP (PPP). Goods and services produced in one country may cost more than equivalent goods and services elsewhere because of high wages, inflation and other factors, which creates more money and raises the total value of nominal GDP. GDP (PPP) — purchasing power parity — is calculated from the prices of around 1,000 goods and services, set according to how the purchasing power of different currencies compares for those goods and services. GDP (PPP) allows countries’ real GDP to be measured.
Take a person who buys a burger, a cola and fries, then gets a haircut, takes a taxi home and pays a month’s gas and electricity bill: in country “A” they spend $200, creating GDP of the same amount; in country “B”, $150; in country “C”, $100. The first country therefore creates twice the nominal GDP of the last, even though the same quantity of goods and services was consumed.
According to the IMF, China’s economy by PPP was worth $37 trillion, the United States $24.5 trillion and India $16.8 trillion in 2023.