The Relationships Among Environmental Regulation,Pollution,FDI And Economic Growth

In recent years, with the rapid economic growth of our country, the problem of environmental pollution has become more and more serious. Citizen are very afraid of fog and haze. In 2010, China had become the world’s largest emitter of carbon dioxide. In 2015, Premier Li proposed that the environmental pollution should be curbed firmly in the government work report, which shows that the environmental governance action plan has been put on the agenda by the Chinese Government. Under this background, it’s important to study the contradictory relationships among environmental pollution, environmental regulation, FDI and the economic growth. However, the traditional EKC curve has been unable to meet the complex real situation. Whether the environmental pollution will curb the economic growth? Is the environmental effect of FDI positive or negative? Whether the environmental control measures of Chinese Government are effectively stop the environmental pollution? In order to answer these questions, this paper will use the panel data of 30 provinces of China to make an empirical study, the systematic analysis of the relationship between them.First of all, a theoretical classification of the related literature of the economic growth, environmental regulation, FDI and environmental pollution is made, deeply educing the mechanisms between the four factors. Then a unified framework to study the four factors are established, finally a panel simultaneous equations model based on the EKC equation, the equation of FDI, Cobb Douglas equation and environmental regulation equation are formulated.Secondly, the spatial relationships between pollutants are creatively considered, testing by the Moran’s index, and then the spatial weight matrix combining the economic distances and geographical distances are used to deal with the variables of pollutants, finally the model with 3SLS are estimated by using the panel data from 2003 to 2014 in China. The empirical results show that:(1) The four variables of sulfur dioxide, waste water, industrial soot and environmental regulation in China are spatially correlated, and others have not passed the test.(2) Under the decentralization system, the phenomenon like the "competing" hypothesis still exist in the local government, which means to pursue the economic growth at the expense of environmental pollution.(3) The impact of the FDI enterprises impact on China’s environmental pollution is that the effect "pollution halo" is larger than that of the the "pollution haven" effect, the government has made some achievements in the strict control of FDI.(4) The economic growth inherently require the government to strengthen environmental regulation, and the traditional capital accumulation and labor quantity accumulation has been unable to meet the requirements of economic growth with high speed and high quality. To build a resource-saving and environmentally-friendly mode of economic growth is inherent motivation to ensure the continual and rapid development of China’s economy.Finally, a thorough investigation on the current economic growth mode and environmental policy in developed countries is made, and the policy suggestions on the coordinated development between economic growth and environmental governance in China are put forward.