Empirical Analysis On Influence To Environment Deterioration By Trading Liberalization In China

With the increasing volume of international trade and the economic development of each country, the increasing non-sustaining production and consumption exceeds the endurance of the environment. The aforementioned phenomenon caused the degeneration of environment which even threatens the survival and development of human beings. Otherwise, with the promotion of income and living standards, people concentrate more on the quality of the environment and enhance the preference for the cleanly environment of human beings. Thus, the issues of environment are more focused on. This paper analyzes the effect of trade liberalization on the environment. First, we reviews the literatures on the effect that influence the issues of environment theoretically and positively, after which it forms the theoretical framework to analyze the correlative influence between trading liberalization and environment deterioration. Later on, it analyzes the dynamic process of the effect on environment in China by trading liberalization theoretically. After that, according to the current reality of trading patterns and environment in China, it measures how much does the liberalization affect the environment by calibrating the data of China. On the basis of former analysis the paper put forward the corresponding politic suggestions of how to humanize the development of trade and environment.By regressing the panel data of different provinces in China, the paper discovers that trade liberalization influence environment in different terms. The three terns are listed as follows. Firstly, increasing openness of trading expands the economic scale, promote the utilization of nature resource and increase the pollution outlet of production. Secondly, increasing trade volume drives the transition and the upgrading of industrial structure in China. It leads to the transition from the production of primary goods which harms environment seriously to manufactured goods and high-tech goods which do least harm to environment in China. Thirdly, the increasing income standard and increasing demand for environment cleanness speed up the utilization of environment saving technology and apparatus. Aforementioned element alleviates the pressure of environment on a whole. On the basis of former analysis, the paper tests the long-term equilibrium relations and bilateral causality between pollution outlet and trading variables by Co-integration model and ECM. The empirical analysis concludes that there is a positive co-integrative relation betweenSO2 outlet, trading and FDI volume, and there is a negative co-integrative relation between SO2 outlet, trading and import volume. Fatherly, the change of trading variables is the major causality of increasing pollution outlet, while, the reverse causality relations is not the case. There are prominent short-term correlations between import, export and FDI, moreover, they do most contribution to the variance of the pollution's prediction.