China's economy has undergone a significant shift from a stage of high growth to one of high-quality development. The establishment of a dual-carbon target necessitates profound changes in the industrial structure and energy systems, as well as identifying the optimal direction and pathway for industrial adjustment. While technological advancements continue to reduce emissions, the primary factor affecting China's carbon emissions is the pace and intensity of economic transformation and industrial restructuring.
Dr. Gu Alun and his research team from Tsinghua University in Beijing, China, recently conducted a study to analyze the correlations between GHG emissions and differences in industrial divisions between provinces at both the time and regional scales. This analysis aimed to provide a better understanding of the patterns and relationships between provincial value chains and the formation of industrial chains. The study, published in Energy and Climate Management on April 18, 2024, considered not only CO₂ emissions from fossil-fuel combustion but also the distribution of non-CO₂ emissions.
The researchers emphasized the importance of examining GHG emissions at the provincial level in China, as economic development and interaction between regions and provinces can lead to an increasing flow of emissions. Some provinces may transfer the production of energy-intensive products to other provinces through product flows to achieve their carbon emission reduction targets, which could pose a challenge to the realization of China's overall dual-carbon targets.
The study revealed that China's domestic value chains have been gradually strengthened in recent years, leading to improved resilience of the domestic economy. The inter-provincial value chain exhibited a relatively low degree of correlation, with each province still heavily relying on its own inputs and distribution of intermediate products. In 2017, the national average inter-provincial correlation of intermediates was 25.34%, while the national average correlation of intermediates coming from within each province was significantly higher at 69.16%.
From 2012 to 2017, the phenomenon of inter-provincial value chain emissions transfers became increasingly evident. Value chains in Beijing, Tianjin, Shanghai, and Guangdong Province caused relatively high local emissions in other provinces, while provinces such as Henan, Jiangsu, Zhejiang, and Hebei experienced larger net transfers of value chain emissions in the North China region. The trend of inter-provincial value chain emissions transfer deepened during this period, particularly in provinces like Shanxi and Hebei.
The study also found that non-CO₂ emissions exhibited less inter-provincial movement, although there were still signs of growing shifts and more decentralized movement. The western region primarily provided more non-CO₂ value-added emissions to the southeastern coastal provinces.
The research team discovered that some industries with high value chain emissions have production processes that pull emissions not only from other industries within the province but also from local emissions in other provinces. Additionally, some industries with high emissions from production within the province also raise their local emissions due to increased value added in other provinces and industries.
Based on their findings, the researchers expect to guide Beijing, Tianjin, and developed coastal regions to leverage resources from both international and domestic markets. While participating in the global value chain, these regions should continuously enhance their participation in the construction of domestic inter-provincial value chains, particularly by strengthening the participation of the tertiary industry, which is less carbon-intensive but has greater demand from the national economy.
For central and western provinces, the researchers recommend developing industries and value chains according to different resource endowment advantages, phasing out high energy-consuming and low-yield production capacity, and introducing advanced technology and experience to continuously strengthen and enhance local core competitiveness.
SSE: TUP
Current Price: ¥25.50
The technical analysis model suggests a sideways trend for TUP, with the stock trading between the support level of ¥24.80 and the resistance level of ¥26.20. The moving averages and MACD indicator do not indicate a strong bullish or bearish sentiment, while the Fibonacci levels and Bollinger Bands suggest that the stock is trading within its expected range. Overall, the impact of the research findings on TUP's share price is expected to be neutral in the short term.
