Lifestyle change, structural transitions and natural resources : new approaches and applications of input-output analysis in China

This PhD thesis employs and further develops the current input-output techniques from different approaches to explore the opportunities for quantitative research on sustainable development in developing countries, particularly applied to the case of the fastest growing economy - China. China's economic success can be confirmed by showing a continuous annual Gross Domestic Production growth rate of over 8% since 1980; being the world's fourth strongest economy since 2005 and the second largest exporter in 2006. China's economic structure has been transformed from agricultural to industrial based while the tertiary sectors are gaining increasing importance. Much of China's population has been experiencing a transition from poverty to adequate food and clothes, and a growing part of populations are changing to "western lifestyles". The economic reform also creates unbalanced regional development, which has resulted in significant income gaps between rural and urban areas, coastal and interior China. All these developments have left deep marks on China's environment. On the other hand, deteriorated eco-systems have the potential to affect the continuity of development and in some regions, as for example North China. This thesis investigates the interrelationships and interactions between the economy and the environment in order to identify the major drivers of environmental degradation for the fast developing economies in the "South". Chapter 4 designs a hydro-economic accounting framework to demonstrate how water has been involved in production, then discharged to the natural environment with degraded quality and its impacts to the regional hydro-systems. By applying the framework to North China which is characterised as water scarce, the water demand was 96% of its annual available water resources, mostly for the water and emission intensive sectors. Chapter 5 takes a different angel by assessing virtual water flows between North and South China. It uses international trade theory as a starting point to address its inability to treat natural resources properly as a factor of production. Both Chapters 4 and 5 suggest that it is important 'to design' an economic structure as well as trade patterns at the beginning of industrialisation process, especially for newly industrializing countries in the "south", from the perspective of sustainable development. Chapter 6 conducts an IPAT-IO structural decomposition analysis on China's C02 emission to picture a race between consumption growth and technology improvements over the past 20 years. It also points out that it is vital to establish policies to switch westernising consumption trend to more sustainable consumption patterns to reduce C02 emissions. This might be the case for many other developing countries as well.