The Study On Environmental Effect Of China's OFDI And Contracting Projects In Host Countries

With the further process of reform and opening,China's outward foreign direct investment(OFDI)has achieved a fast development.As the volume of OFDI keeps increasing,it forms an interactive development with attracting foreign direct investment.Simultaneously,in the last few decades,China's has contracted more and more foreign projects in more and more countries or regions,the accomplished turnovers increasing year by year and.The rapid development of China's OFDI and the contracting of foreign projects have formed a solid foundation for international cooperation on production capacity and equipment manufacturing that China's is currently promoting.However,there has been some misleading public opinions that falsely think that China's multinational enterprises are all lacking outbound environmental responsibility,creating negative impacts on host countries' natural environment,thus even coming up with an idea that China's transfer production capacity is essentially seeking pollution havens.Even though the above-mentioned opinions are just minority,if can't met with cogent citics,they will lead to bigger misleading to increase the comprehensive cost for China's multinational enterprises as they operating overseas,and finally might hinder international cooperation on production capacity from developing on a green,win-win and harmonious basis.Based on relevant theories of International Investment and International Environmental Economics,this dissertation runs empirical tests on the impact China's OFDI and contracting foreign projects have on host countries' environmental quality,using the by-country data of China's foreign economic activities and statistical data of different host countries,strongly disproving the fallacy that China is transferring polluting production capacity and forming suggestions for further promoting enterprises going out as well as regulating their outbound economic activities.Using 83 countries or regions during 2003-2013 as a sample,this dissertation initially runs empirical tests on the relationship between the change of their environmental quality and China's OFDI.The results show that,no matter environmental degradation of host countries is measured by CO2 emission per capita,CO2 emission per unit GDP,forest per capita or forest coverage,there is no significant evidence that can prove environmental degradation of host countries is driven by China's OFDI.On the contrary,as China's OFDI is increasing,host countries' environment might get improved somehow.Although the above-mentioned effect lacks significance level in the overall sample estimation,the moderating effect test proves that,host countries' openness can significantly impove the positive contribution China's OFDI makes to host countries5 environment,therefore in sample with higher openness,China' OFDI has significant posititve effect on their environmental quality.It serves to show that,the opinion of China's OFDI intensifying pollution in host countries has no leg to stand on.China's OFDI has no motive to seek pollution havens,and it would be irrational for them to practice double environmental standards.China's OFDI won't intensify pollution in other countries,and as long as host countries can implement open,fair and transparent trade and investment policy,Chinese enterprises will save some comprehensive cost to use them for forming pollution halo,helping host countries promoting technology of treating and controlling pollution and raise standards of green production.Furthermore,using 95 countries or regions during 2000-2013 as a sample,this dissertation initially runs empirical tests on the relationship between the change of their environmental quality and China's contracting foreign projects.The result shows that,when other factors are being controlled,for a host country,the accomplished turnovers of China's contracting its projects is higher,CO2 emission per capita,CO2 emission per unit GDP appear to be lower while forest per capita and forest coverage appears to be higher.It can be seen that,China's contracting enterprises have strictly held environmental responsibility and effectively improved local environmental quality.The result also shows that,in countries where its labor force takes up a bigger proportion of population,China's contracting foreign projects can realize employment localization more easily,and the positive relationship between the accomplished turnovers of China's contracting foreign projects and the environmental quality of host countries becomes more prominent.Hence,the theoretical judgment in this dissertation is testified that not only won't China's contracting foreign projects intensify environmental degradation in host countries,but also it will improve the industrial structure and environmental regulation in host countries by means of the localization of employment and purchase.To fully understand the evolvement rule of the impacts outbound economic activities have on the environment and to explore international experience,this dissertation takes a further step to run an empirical test on the environmental effect of US OFDI.The result shows that,the one degree term of the US OFDI has a significant positive effect on every index of CO2 emission,but the coefficient of its quadratic term is significantly negative,i.e.as the volumn of investment is increasing,the negative impact on the environmental quality of host countries is alleviated.This indicates that the US enterprises will better hold environmental responsibility in countries which stay in a closer investment relation with the US.The result also shows that,there is a time node in the impact the US OFDI has on host countries'environment.Before 1996,the US OFDI has a significantly positive impact on CO2 emission in host countries,while after 1997,the impact becomes significantly negative.During 1996-1997,New Economy in the US experienced a thriving time,emerging internet and information industry had a bigger and bigger impact on economy.The rapid adjustment of industrial strucute effectively releases the original superior production capacity,and also weakens the polluting nature of exported industry,improving the quality and profits of the US OFDI.The US OFDI has experienced a rather long process of development,and its green transformation can be learned by China.Based on theoretical and empirical analysis,this dissertation provides several policy suggestions for a new opening pattern which is centered on green,harmonious and win-win international cooperation on production capacity.The conclusion,on one hand,generates some enlightenment on constructing China's new opening pattern;on the other,helps reducing unnecessary doubt on international cooperation on production capacity and equipment manufacturing,making international cooperation on production capacity play its role in the transformation of China's export-oriented economy.It also helps keeping an exact direction along which international cooperation on production capacity can be promoted sequentially,grasping the opportunity brought by the construction of the B&R,and promoting a new round of opening up.Besides,this dissertation makes a breakthrough by changing the developed countries being the angle of view with which existing literature studies the environmental effect outbound economic activities has on host countries,discovering and testing the heterogeneous relationship between foreign economic activities and the natural environment of host countries,forming some enlightenment for theoretical development in relevant study of fields.