An analysis of the implications of China's urbanization policy for economic growth and energy consumption

China intends to rely on urbanization policies to increase its economic growth even against the backdrop of new constraints on energy consumption. This paper investigates the impact of urbanization on economic growth and energy consumption using data from China's 266 prefecture-level cities over the 2000-2010 period and examines the heterogeneity of this impact across income and urbanization groups. The main results of our empirical estimation indicate that: (1) the effect of urbanization on economic growth is positive and significant for the entire sample, although it is positive and significant only for high- and middle-income groups (and not the low-income group); (2) the impact of urbanization on energy consumption is positive and significant for all groups when the sample is divided into three urbanization groups based on the Northam curve, indicating that urbanization will lead to large increases in energy consumption. In summary, our empirical results show that urbanization targets will be difficult to achieve in terms of increasing GDP per capita under energy consumption constraints. (C) 2017 Elsevier Ltd. All rights reserved.