How Internalization Of Environmental Cost Impacts China's International Market Power In Export

Viewed from the logic of economics, how internalization of environmental cost impacts on the international market power in export trade derives from trade and environmental issues, its research bases on imperfect competitive market and environmental externalities. In the early stage of international trade, people ignored the scarcity of environmental resources and non-replicative due to the smaller scale of exports. During that time, conflict or contradiction between export trade activities and the environment was still in dormant state. However, with the rapid expansion of international trade and the deep development of economic globalization, the negative impact that large-scale export activities worked on the environment presents a trend of exceeding the ecological threshold. Based on this socio-economic background, since 1970s, environmental movements have developed quickly, one after another, countries establish and perfect the mechanism of internalization of environmental cost, and optimize related institutional arrangements. In recent years, China has gradually accelerated the pace of trade-related environmental regulation, and has implemented a series of measures to internalize environmental costs, thus researches on how internalization of environmental cost impact on export trade increasingly gain widespread attention in mainstream economics.Objectively, most of existing researches explain the impact of internalization of environmental cost worked on export trade from the perspective of international competitiveness, while relevant research results based on the perspective of international market power is lacking. At present, there is an obvious divergence existed in the theoretical circle about how internalization of environmental cost worked on international market power in export trade. According to one tendency, internalization of environmental cost would erode developing countries'international market power in export trade. While in the view of the other tendency, internalization of environmental cost would not weaken the international market power in export trade, but is conducive to nurturing and expanding it in developing countries. The manufacturing industry is strategic industry in promoting the modernization process of China. There is an extremely far-reaching significance of reasonable internalization of environmental cost in achieving the coordinated development of manufactured export trade and environment. However, the academic community has been faced with a confusion, that is, will the continuous improvement of internalization of environmental cost undermine China's international market in export trade. This article attempts to interpret the mechanism of how internalization of environmental cost impact on the international market power in export trade, thus do some exploratory empirical analysis based on China's manufacturing industries.Started from environmental externalities, with the view of international market power, based on the industry level, this paper analyses how China's internalization of environmental cost impacts on the international market power in export trade. Choosing nine manufacturing industries as the research object, respectively using pollution intensity and Lerner index as the measure of internalization of environmental cost and international market power, based on panel data, and using quantitative analysis methods, the empirical research has analyzed how the change in the degree of internalization of environmental cost impacts on the international market power in export trade. By influencing the cost of export products, the degree of production difference and technological innovation, the internalization of environmental cost affects the international market power in export trade. The empirical result shows that China's degree of internalization of environmental cost is upgrading, and this trend will bring each industry's varying degree of increase in the international market in export trade, which means China's environmental cost internalization measures have a greater positive impact on the international competitiveness of each industry than the negative impact, showing a positive impact effect on the whole since 1990s. Based on these conclusions, this article puts forward countermeasures and suggestions on how to achieve the internalization of environmental cost, cultivate international market power and realize coordinated development of export trade and environment etc.