Empirical Study On The Air Environmental Effect Of Foreign Trade In Shandong Province

Reform and opening up brought rapid integration of Chinese economy with global market. However, environment problems followed. Shandong Province is an important window of China’s foreign trade. Free trade brought abundant capitals and advanced technologies. While at the same time, air pollution of Shandong Province is serious. Many kinds of air pollution indexes are at the top of the list. Environment problems cause more and more public concern. International trade has made remarkable influence on the environment, so it is necessary to put it into research framework of relationship between economic growth and environmental pollution. Consequently, correct research on the relationship between foreign trade and environment is fatal basis for Shandong Province to choose appropriate economic development route.To describe the influence of foreign trade on the air environment, we establish a simultaneous equation system based on the relationship between foreign trade dependence, economic growth and pollution discharge. We use 3-stage least square methods based on panel data of 17 cities from 2000 to 2014. According to direct effect, scale effect, structure effect, technology effect, we discuss the influence of foreign trade on the air pollution. In addition, we divide Shandong province into 2 parts to compare on the basis of geographical position and foreign trade developed degree. One is coastal area, another one is inland area.The result shows that foreign trade causes reduction of pollution directly. Indirectly, economic scale expansion caused by foreign trade exacerbates air pollution, technology development caused by foreign trade reduces air pollution, and adjustment of industrial structure caused by foreign trade has insignificant effect on the air pollution on the level of whole province. The results of sub-regional research shows, adjustment of industrial structure caused by foreign trade has different influences on the air pollution between different areas. Secondary industry proportion decreases as foreign trade developed in the coastal area which improved air quality. While secondary industry proportion increases as foreign trade developed in the inland area which damaged air quality. Combined direct effect and indirect effect, overall effect of foreign trade on the air pollution is negative, which means foreign trade improves air quality of Shandong province.According to the conclusion, we offered several suggestions for Shandong province’s sustainable development. For instance, boosting investment of labor capitals and human resources, cultivate and bring in technical talents; readjusting industrial structure, optimization and upgrading traditional industry, reducing dependency of economic growth to resources; strengthening the ability of scientific and technological innovation, boosting investment of technology funds, obtaining technical breakthrough on the areas such like energy-saving, emission-reduction, new energy.