The Environmental Effect Of Trade Liberalization In China

The environmental effect of trade liberalization is the important aspect of dealing with the relationship between trade and environment. Firstly, this paper stated the connotation of the environmental effect of trade liberalization and its rationale, which established the theoretical basis for analysis of the whole paper. Secondly, this paper used the data of 29 provinces and autonomous regions, as well as municipalities of mainland China from 1993 to 2005 to make an empirical analysis of the environmental effect of trade liberalization via dynamic panel data model based on ACT model estimated by system GMM. Finally, some policy proposals on how to make the sustainable development of trade and environment in China according to our country's present situation were put forward.The results showed that trade liberalization had a negative impact on environment both in the short term and in the long term. There among, the positive net scale-technical effect could not offset the negative composition effect which played a leading role in the change of environmental quality. Our country accorded with the hypothesis of pollution heaven motivation. Environmental effect had an obvious regional difference between developed areas and underdeveloped areas. With the intensity of environmental regulation unchanged, environmental pollution in underdeveloped areas was much more serious than that in developed areas following with the continuous deepening in trade liberalization.