Relationship Analysis Between Economic Growth And Environmental Pollution Of Shandong Under Open Conditions

With the acceleration of economic globalization, the global environmental pollution and ecological destruction continue to deteriorate, and the relationship among economy, trade and environment is shaping up. Since China's entry into the World Trade Organization, the economic development and trade of Shandong Province have fruited rapid. But environmental pollution and ecological destruction also have become increasingly serious. The relationship among economy, trade and environment, needs to be treated seriously and handled with wisdom. Whether the environmental pollution and ecological problem can be solved through the economy and trade development, to realize the virtuous circle of the three factors? Relevant theories have explained the economy-trade-environment nexus. How does this relationship affect Shandong province? And what measures can we take to protect the environment, thus promoting the development of economy and trade? This paper attempts to answer the questions mentioned above by theoretical analysis and empirical testing.Analyses are made in terms of the following aspects.PartⅠ, the essay begins with reviewing the theories about the relationship of economy, trade and environment, and then summarizes the relevant empirical literature. Existing empirical research has focused on the economy, trade and environment of different countries and areas, thus come to the conclusion that the economy and pollution, the trade and environment both have the correlation. The studies compare the different sample data, but don't reach the same conclusion. But little literature has analyzed the mechanism of the relationship. Most of current studies are about the developed and developing countries, different countries of the world, provinces of China, while few is about the areas of the province. Therefore, using the existing literature for reference, this paper studies the relationship among economy, trade and environment of Shandong province.PartⅡ, this part briefly describes the status of Shandong economy, trade and environment, which mainly describes the pollution-intensive industries, trade and the pollution dilemma. The economy develops rapidly, but still is industrial-based. Pollution-intensive industries occupy a larger proportion. Followed by increasing trade and interdependency in trade, the export of pollution-intensive products keeps stable and the import is growing. The manufacturing attracts more than 60% of the foreign investments. The high proportion of pollution-intensive industries and products lead to serious environmental pollution and ecological damage. In addition, this part also collects empirical data for purpose.PartⅢ, this part analysts the intrinsic relationship among economy, trade and environment. After selecting the representative variables, we found that the pollution variable has the long-term stable cointegration with economy and trade by unit root test and cointegration test. Economy and trade have significant effect on environmental pollution, the economy deteriorate the pollution, while the trade liberalization reduces the pollution.PartⅣ, this part further explores the mechanism of economy-trade-environment. Based on the methods of Cole (2003) and Frankel and Rose (2005), this part uses the simultaneous equations to explore how the relevant factors influence environmental pollution and output, at the same time solving the endogenous variables problems. Empirical results indicate that physical capital, human capital and trade liberalization increase the output, but the impact of trade liberalization is weak; the pollution-output nexus isn't significant, but the output is beneficial to reduce pollution; the trade liberalization and environmental regulation deteriorate environment; the structural effect has no impact.PartⅤ,We use the panel data of 17 areas in Shandong province to explore the economy-trade-environment nexus, which avoids the defects of cross-sectional data and time data. The impact is classified as income effect, scale effect and structural effect, and the conclusion of three effects is consistent with the analysis of time data. But the trade liberalization deteriorates the pollution dilemma.PartⅥ, this part is about the conclusion and the policy recommendations. According to the foregoing results, we provide policy recommendations of better promoting economy, trade and environment, with the hope of forming virtuous circle between social economy and environment.