Research Of Environmental Regulation And Export Trade Interest

With the rapid growth of international trade and the serious global environmental pollution,the conflict between trade and environment is occurring after industrial civilization, and manycountries begin implementing trade and investment liberalization policies together withenvironmental protection policies and systems. As a developing country, China has beenimplementing the policy of "market for technology" for a long time and focus on the import andexport increment regardless of resource consumption and environmental pollution. SinceChina’s export commodities include a large number of high energy-consuming products, sothere is a huge ecological and energy deficit behind the trade surplus interests. Meanwhile,foreign trade without consideration of resources and environmental factors is bound to lead tothe implementation of more stringent trade barriers in developed countries. Therefore, it isnecessary for the implementation of environmental regulation. Study on environmentalregulation promoting or inhibiting the competitiveness and its trade relations with tradeinterests under sustainable development has become the inevitable choice for the currentdevelopment of China’s foreign trade. Based on the analysis of the meaning and measurementof foreign trade interests under sustainable development, and on the analytical framework oftrade effects of environmental regulation, the impact of environmental regulation on China’sexport trade has been analyzed theoretically and empirically, and the rationality of China’sforeign trade structure has also been analyzed based on green input-output analysis.Then forChina’s environmental sensitivity of the industry, first environmental regulations’ impact onChina’s export competitiveness were examined without its innovation,then environmentalregulations’ impact on China’s export trade interests has also been examined underenvironmental regulation’s impact on the innovation. On the basis of the above mentioned, thereis important theoretical and practical significance to seek policies and suggestions of enhancingthe interests of our country ’s foreign trade under the sustainable development.This paper begins with the connotation of trade benefits under the paradigm of sustainabledevelopment, and puts forward three indexes to measure the real trade benefits such asreasonability of green trade structure, income terms of green trade and green export earningsindex under the low-carbon economy environment, then China’s green trade interests has beenempirically analyzed with reasonability of green trade structure based on Professor Lei Ming’sresearch basis. Then the evolution of environmental regulation is chronologically described,environmental regulation is divided into three types from view of the implementation, andinnovation, environmental regulation and competitiveness are included within one analyticalframework after learning Sartzetakis&Constantatos (1995) and Alpay (2001) analyticalframework. First, environmental regulations of the impact on international competitiveness is analyzed in a closed economic system, and then this kind of analysis is extended to the openeconomic system; meanwhile, our paper analyzed environmental regulation’s impact on theinternational competitiveness from the demand side instead of mainly from the supply-sidepreviously. Finally, endogenous and exogenous environmental regulation’s impact ofcompetitive conditions is firstly empirically analyzed for6environmental sensitivity industrieswith modified gravity model of trade under the premise of environmental regulation havingno promotion to innovation, and environmental regulation’s influence of export trade interestsof China’s environmental sensitivity industries is then empirically analyzed based on index ofexport earnings and measurement of export interest of our environmental sensitivity industryunder the premise of environmental regulation’s promotion to innovation.Based on the above, we draw the following conclusions.Theoretical studies show that afterinclusion of the existing resources and environmental factors, green trade reasonable degree ofstructure, green terms of trade and green income index can be used to measure real tradebenefits under low carbon economic environment. Environmental regulation will have directand indirect effect on a country’s corporate environmental costs. In an open economy system,there are three different cases of environmental regulation’s impact on the competitiveness ofdomestic enterprises. The first case is that two companies at home don’tinnovate;environmental regulation will enable foreign firms to increase their market share, butits impact on the market share of domestic manufacturers and profits depends on demand priceelasticity and the number of licenses.The second case is that two domestic companies are tryingto innovate and get better technologies at the same cost;whether environmental regulationwould increase trade competitiveness and bring the benefits of trade largely depends oncomparison result of the cost of before and after implementing innovative environmentalregulation.The third case is that only one company tries to innovate while other remains itsoriginal technology at home;under this situation, and the company ’s market share of innovationcompany will be larger than non-innovative enterprises, but more benefits can be gotten fromonly one enterprise innovation than both innovation. In addition, changes in environmentalpolicy will also affect the economic demands, and in case consumers prefer environmentallyfriendly way to produce the products, more stringent environmental regulations will increasethe demand for domestic goods.Empirical studies have shown that for those industries with a large green influence butinsufficient export, we should take advantage of both market mechanisms and governmentsupport to promote their export, and for those with small green influence coefficient buthigher green exports influence coefficient, we should focus on improving its green influence tothe national economy; And for those with higher green impetus coefficient but lower greenimport driving force coefficient,we should increase their import or output, and for those with alarger proportion of imports but insufficient green driving force,we should focus on promotingtheir role of driving force. Effects of endogenous and exogenous environmental regulation onthe export competitiveness of China ’s pollution-intensive products are shown as an inverted U-shaped curve, that is，export competitiveness improves with more stringent environmentalregulations initially, but falls with stricter environmental regulations after reaching aninflection point; Currently export interests of our environmental sensitivity industry are shownas an increasing trend on the whole, but still rely on labor-intensive and resource-intensiveindustries to obtain trade interests; export interests of resource-intensive steel industries andtechnology-intensive industry including chemical and pharmaceutical industry have asignificantly positive correlation with endogenous and exogenous environmental regulation,while export interests of labor-intensive textile industry have a significantly negativecorrelation with endogenous and exogenous environmental regulation.