International trade, pollution industry transfer and CO2 emissions in Chinese industries1

Li Xiaoping1, 2 and Lu Xianxiang1

1 School of Economics, Zhongnan University of Economics and Law
2 Institute of Finance and Trade Economics, Chinese Academy of Social Sciences

 
Abstract:

Will developed countries turn China into a haven for “dirty” industries through international trade by specializing in producing and exporting “clean” products and importing pollution-intensive products from China? How does international trade affect Chinese industries’ CO2 emissions? This paper presents an empirical test of these hypotheses using statistical techniques such as the environmental input-output model and net exports as a proportion of consumption (NETXC) based on the trade data of 20 industries in China, and G7 and OECD developed countries. In this study, we draw three conclusions: (1) The proportion of domestically produced CO2 emissions in CO2 emissions embodied in products exported from China has been declining; (2) Industries migrated or displaced from developed countries into China include both “dirty” and “clean” industries; (3) International trade can help industries reduce CO2 emissions in aggregate and per unit of output. China has not become a haven for developed countries’ “dirty” industries as a result of international trade.

Key words: International trade, pollution industry transfer, CO2 emissions

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