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Economic gains and environmental costs from China's exports: Regional inequality and trade heterogeneity

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  • Zhang, Zengkai
  • Duan, Yuwan
  • Zhang, Wei

Abstract

As the world's factory, processing exports comprise a remarkable share of China's total exports. By fully taking the special characteristics of processing trade into account, this paper comprehensively investigates the unbalanced distribution of trade-related economic benefits and environmental costs across different regions in the years of 2007 and 2012. We find a serious regional mismatch between trade-related pollutions and economic gains, with the coastal region gaining more economically but emitting less, whereas the inland regions gain less but emit more. We also conclude that trade-related value added and air pollutions would be overestimated significantly if trade heterogeneity was not correctly captured. Processing exports are cleaner but result in greater regional inequality in terms of trade-related economic gains and environmental costs, although the regional inequality induced by processing exports presented a decreasing trend over the period 2007–2012. The electricity generation sector plays a dominant role in this outcome. Coastal regions should transfer more trade-related economic gains to help sustainable development in inland regions.

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  • Zhang, Zengkai & Duan, Yuwan & Zhang, Wei, 2019. "Economic gains and environmental costs from China's exports: Regional inequality and trade heterogeneity," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    • Handle: RePEc:eee:ecolec:v:164:y:2019:i:c:43
    DOI: 10.1016/j.ecolecon.2019.05.020
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    2. Tian, Kailan & Dietzenbacher, Erik & Yan, Bingqian & Duan, Yuwan, 2020. "Upgrading or downgrading: China's regional carbon emission intensity evolution and its determinants," Energy Economics, Elsevier, vol. 91(C).
    3. Tao Song, 2024. "Pollution reduction by rationalization hypothesis and water pollution in China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    4. Chuai, Xiaowei & Gao, Runyi & Huang, Xianjin & Lu, Qinli & Zhao, Rongqin, 2021. "The embodied flow of built-up land in China's interregional trade and its implications for regional carbon balance," Ecological Economics, Elsevier, vol. 184(C).
    5. Wei Zhen & Quande Qin & Lei Jiang, 2022. "Heterogeneous Domestic Intermediate Input-Related Carbon Emissions in China’s Exports," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(3), pages 453-479, March.
    6. Duan, Yuwan & Yan, Bingqian, 2021. "Has processing trade made China's exports cleaner? A regional level analysis," Energy Economics, Elsevier, vol. 96(C).
    7. Fan, Xiaojia & Wu, Sanmang & Lei, Yalin & Li, Shantong & Li, Li, 2020. "Have China's resource-based regions improved in the division of GVCs? — Taking Shanxi Province as an example," Resources Policy, Elsevier, vol. 68(C).
    8. Lin, Yongsheng & Dong, Zhanfeng & Zhang, Wei & Zhang, Hongyu, 2020. "Estimating inter-regional payments for ecosystem services: Taking China’s Beijing-Tianjin-Hebei region as an example," Ecological Economics, Elsevier, vol. 168(C).

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