Energy production is a key ingredient of any economy's capacity to create wealth.  The Energy Intensity of a nation's economy is usually measured as being the ratio between the "tons of oil equivalent" of primary energy consumed to that country's GDP.  Of course, it's debated as to in what currency a country's GDP should be measured for this purpose - or whether purchasing power is more appropriate - but many economists, and I, prefer using dollars because the energy market is very global with rates typically denominated in dollars.  In those terms, the US generates $5,670 per TOE, the UK makes an impressive $10,570, while China only makes $1,570. 

Clearly, China would prefer a better ratio since they would like to increase their GDP without having to consume huge amounts of additional energy.  The government had set a goal of a 20% improvement by 2010, and the goal for 2006 was 4%, but China Daily reports that though they achieved their first improvement ever, they didn't get there, reaching only 1.3% and actually increased Electrical Energy Intensity by 2.75%.  The bottom line is that China's energy consumption has a long way to grow on their way to being rich.

From Bloomberg:

China is under 'very heavy pressure'' to meet targets for reducing the amount of energy used to drive the world's fastest-growing major economy after missing last year's goal, a government official said.

... ``I do not recommend that China set an artificial target and then use administrative measures to achieve this — that's more of a political consideration,'' Robert Blohm, an independent energy consultant based in Beijing, said by telephone. ``Market- based measures are the best way to achieve efficiency.''

The government wants to reduce reliance on oil imports that jumped 20 percent last month from a year earlier by promoting renewable energy forms and is studying policies on taxing fuels. Banks were this month ordered to restrict lending to polluters and encouraged to finance users of energy-efficient technology. [Good Luck! -ed.]

... The nation should consider the role prices can play in achieving conservation, Blohm said.

-Additional Commentary Below:

There is a major sub-debate in the Global Warming and Energy Conservation discussions as to whether emissions and consumption goals should be absolute, based on population, or based on the value added to energy production by an economy (which is measured by Energy Intensity).  The absolute theories - upon which European countries and Japan rely, and the Kyoto Protocol is based - set hard targets that developed nations commit to meet regardless of the consequences on their populations and economies or the efficiency of their energy use.  The per-capita theories - which most developing countries argue - are based on a notion of fairness.  They ask, "Why should a person in a poor country who uses 1% of the energy of a G8 citizen be frozen at that level of use instead of having just as much a 'right to emit' as a person from a wealthy country?"

An economist, however, when asking whether to engage in any policy, would try to predict and monetize the costs and benefits of the alternative courses of actions and select the optimal solution in order to maximize social welfare.  Easier said than done, some things are profoundly hard to predict and/or monetize - like the economic impact of Global Warming in the distant future. 

Setting Energy Intensity targets, however, helps to perform this essential balancing exercise, since it wouldn't restrict emissions at all costs (if they did more harm than good) and would help to eliminate the least productive uses of energy first.  Large countries whose economic growth is heavily dependent on additional energy consumption, like Canada, the US, Brazil, Russia, China, India, and Australia tend to favor Intensity targets.  In the end, those hoping for effective, universal, binding, global agreements on emissions anytime soon are almost certainly out of luck given the above news.