Empirical Analysis Of China's Foreign Trade And Environmental Pollution

China's economy and its foreign trade have experienced a two-decade period of steady high growth rate, the trade-off relationship between environment and sustainable economic development has became an important research agenda, especially the impacts of environmental resources on China's long-term economic growth in an open economy. This paper analyzes the effect of trade and FDI on the environment. 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 among trade,FDI and environment deterioration. The empirical analysis discovered that the Chinese manufacturing industry trade growth and the environmental pollution cause the Granger reason which for the correlational dependence the environmental pollution intensifies, with trade-environment matrix (TEM) the analysis discovered that China have the possibility to become the "pollution haven" of developed country; By drawn lessons from the thinking of the Wanghuijiong decomposing model and carried on research to the pollution caused in export trade of Chinese manufacturing industry of 2003- 2006 year, the result shows: The discharge capacity per export of most departments is reducing progressively in recent years. Export structure and environmental technology level help to reduce the pollution from export. Improve the adverse effect on the environment of China's export trade, will need to adjust the export structure and improve the environmental technology level, pay attention to the reduce efforts degree of various discharge capacity, prevent appears the minority department to pollute the phenomenon which between the emission in inverses proportion. It has been widely tested by using new econometric estimation tools such as unit root test, co-integration, Granger-causality test, VAR estimation, panel data model as well as simultaneous equation estimations to discuss the relationship among the export,FDI and environmental pollution. With the rapid development of Chinese economy and trade, the limitation of traditional zone dividing emerges gradually in researching question about trade and the environment policy. This paper through analyzing data from 1992 to 2005 various provinces, the autonomous region and cities in China more than 10 years about economies, the trade growth and the environmental pollution, extracts synthesis factor score of various provinces, autonomous region and cities by using the factor analysis and further introduces a method of clustering panel data. The wide difference between the classification of region by positive analysis in this paper and the traditional region classification has provided the new reference for the trade and the environmental pollution region research. Finally, used Panel data model to analysis four areas whether to have inverse U type EKC , and series of policy suggestions are also provided.