The Impact of Trade on Environmental Pollution of China - An Empirical Analysis Based on Double Difference Model

Abstract

China has joined the WTO for almost fifteen years so far. It is no doubt that WTO does great help in boosting China’s economic growth. However, with the rapid development of our trade and economy, the environmental problem in China has drawn increasing attention. This paper investigates the impact of joining the WTO on environmental pollution and analyzes whether coastal cities are more affected than inland cities. We use difference-in-differences approach to analyze data from approximately 300 cities from 1997 to 2006 in China, taking the emission of industrial SO₂ and the discharge standard-meeting rate of industrial wastewaters as an example, and then examine that the environmental pollution has been relieved since China joined the WTO. Also, the improvement effect on the environment of coastal cities is greater than that of inland cities.