『Abstract
　The pricing mechanism for energy is not in line with international standards, because the energy prices are controlled by the government partly or completely in China. Chinese government made a lot of efforts to improve the pricing mechanism for energy. The relations between Chinese energy prices and energy consumption are the foundations to reform the mechanism. In this paper, the relations between Chinese energy consumption and energy prices are researched by cointegration equations, impulse response functions, granger causality and variance decomposition. The cointegration relations among energy prices, energy consumption and economic outputs show that higher energy price will decrease energy consumption in Chinese industrial sectors but will not reduce the economic output in the long run. The cointegration relation between energy price and household energy consumption shows that higher energy price will decrease household energy consumption in the long run and increase it in the short run. So Chinese government should deepen the reform of pricing mechanism for energy, and increase the energy prices reasonably to save energy.

Keywords: Cointegration; Energy consumption; Energy price』

1. Introduction
2. Methodology and data used
　2.1. Methodology
　2.2. Data
3. Results and discussion
　3.1. Relations among energy consumption, energy price and output in Chinese industrial sectors
　3.2. Relations among energy price, household consumption and household energy consumption
4. Conclusion
Acknowledgement
Appendix A. The variables and abbreviations
References