Essays on trade liberalization and the environment in China

Xu, Fangya (2010) Essays on trade liberalization and the environment in China. PhD thesis, University of Nottingham.

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Abstract

This thesis is concerned with understanding the relationship between trade liberalization and the environment in the context of China. Four empirical essays are conducted to investigate different aspects of the nexus. We first look at the changing patterns of revealed comparative advantage in manufacturing industries for China and other countries to examine whether dirty industries have `migrated' from developed countries to China as a result of an environmental regulatory gap. The attention is then turned to the determinants of trade specialization and the role played by environmental stringency using cross-industry regressions within a Heckseher-Ohlin framework. The environmental consequences of trade liberalization are evaluated at both the industrial and provincial level. Next, Environmental Input-Output Analysis (EIOA) is used to measure the `potential' and `actual' pollution content (for three air pollutants, C02, SO2, NO, 1) in imports and exports by industry and overall. In the last essay, we evaluate different and countervailing effects (scale, income and trade-induced composition effects) of trade's impact on the environment using Chinese provincial data.

Some generalizations can be made from the studies. Firstly, little evidence is found to support the feared `Dirty Industry Migration' phenomenon from North (developed countries) to South (e. g. China) at ISIC 3 digit level for the past three decades. Secondly, environmental stringency seems to be a negative effect on trade performance at cross-industry level in China. Thirdly, China `saves' in environmental terms through trade and its exports structure is cleaner than that of imports; however, these two conclusions are completely overturned when technology heterogeneity across countries is allowed for. Finally, the channels through which trade liberalization can affect the environment are conflicting and there is no clear cut answer to the question 'is freer trade good or bad to the environment'.

Item Type:Thesis (PhD)
Supervisors:Milner, C.R.
Uncontrolled Keywords:Free trade, industries, environmental aspects, China
Faculties/Schools:UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
ID Code:2930
Deposited By:Ms Valerie Airey
Deposited On:19 Nov 2012 09:55
Last Modified:19 Nov 2012 09:55

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