Paths And Effects Of Environmental Regulation On China’s Industrial Structure Restructuring

Since the reform and opening up 30 years ago, China witnessed a boom economic development. However, resource exhaustion and ecology deterioration are serious problems at the same time. It becomes social consensus to restructure industrial structure. Following the economic slowdown after the financial crisis in 2008, restructuring of industrial structure becomes the focus of economic reform. Among all the regulative policies for structure restructuring, environmental regulation is a popular one. So how does environmental regulation influence structure restructuring? What’s the specific influence mechanism? What’s the results of different paths? All these problems need a deeper study.First of all, this paper organized the literature related to environmental regulation and industrial structure restructuring, which reflected that exiting studying focused on the direct influence. However, there is little literature analyzed the indirect influence, which provided the basis for the innovativeness of this paper.Secondly, this paper analyzed the influence mechanism between environmental regulation and industrial structure restructuring, and studied the effect of environmental regulation on structure restructuring by means of consuming structure, investment demand, technology development and international trade.Thirdly, this paper used Chinese provincial panel data to test the relationship between environmental regulation and industrial structure restructuring empirically. As a result, not only did environmental regulation influence industrial structure restructuring directly, it will also influence structure restructuring by means of consuming structure, investment demand, technology development and international trade. All of these influences are positive.At last, this paper raised related recommendation combining the empirical result and the condition of China. Firstly, practicing the policy of environmental regulation and perfecting the related system. Secondly, using environmental regulation as guidance to household consumption. Thirdly, formulating measured environmental regulation policy according to different conditions. Lastly, reinforcing environmental regulation to foreign companies and giving play to the technical effect of FDI.