Research On The Trade Effects Of CAFTA On China's Pollution Intensive Products

In the context of global promotion of low-carbon production,the Chinese government has pledged that at the end of 2030,it will reduce carbon emission per unit of GDP about 60%to 65%based on the year of 2005,and make the total carbon emission arrive the peak in the year of 2030.The "Chinese Manufacturing Strategy 2025" points out that the unit value added carbon emissions will be reduced 40%based on 2015.Now China has gradually shifted its focus from economic interests of trade to environmental benefits.Pollution-intensive industries refer to those industries which discharged more pollution than other industries.They play a key role in Chines emission reduction targets.To promote the friendly development of China and ASEAN countries,the two sides signed a higher standard cooperation agreement based on previous agreement and reduced the tariff,which bring a large increase of production?pollution and environmental cost.Now China has exported more than imported,which means it bears the pollution transferred by ASEAN countries.What's worse,it becomes more serious by the CAFTA's trade creation effects.The 2016 is the first year of "13th Five-Year-Plan",the environmental problem is urgent to be solved.Through analysis of the factors affecting the Chinese pollution intensive products' export and focus on the trade effect and changing trend,this paper has proposed some advice to achieve emission reduction target.This paper calculates pollution index and sorts them to determine the pollution-intensive industries to be studied.They are non-metallic mineral products industry,paper and paper products industry,ferrous metal smelting and rolling processing industry,metal smelting and rolling processing industry,chemical materials and chemical products manufacturing industry.By combining the theory and statistics and calculating the RCA index to predict trade effect and further compared with statistic results.This paper also compares the trade amount between China with members of CAFTA and Non-CAFTA which makes the analysis more accurate.By reviewing the theory of trade union and free trade area,this paper introduces the definition of trade creation effect and trade diversion effect,and lays a theoretical foundation for the analysis of trade effect caused by the establishment of CAFTA.This paper collects the relevant export data of pollution-intensive industries from 2001 to 2015 between China and six ASEAN countries and also between China and 20 Non-CAFTA countries,to make a comprehensive analysis of Chinese pollution intensive industry products exporting situation and the CAFTA's trade effect.Based on the empirical results,this paper draws the following conclusions.Overall,the establishment of CAFTA has significantly promoted export trade of pollution-intensive industries between China and ASEAN countries,and there is obvious trade creation effect.It also promotes the trade between China and non-member of CAFTA,and there are no signs of trade diversion.All industries have shown an obvious trade creation effect on exporting,which means some enterprises will export more to obtain profit without considering the environment problem and hampered to reach the goal of emission reduction.Finally,this paper puts forward some suggestions on the development of Chinese pollution-intensive industries under the trade effect brought by CAFTA.And from the respective of CAFTA and three levels to make some recommendations for the development of pollution intensive industries.The possible innovation of this paper is to analyze pollution intensive industries which is deferent with the existing paper focused on the overall trade effects and pollution transfer.In the framework of CAFTA,by using empirical study to view CAFTA's trade effects.And from the perspective of trade agreements,to promote China's emission reduction targets and make recommendations for the export of China's pollution intensive products.However,the paper does not use the data of other four countries of ASEAN for the zero trade.To further analysis,it should use Heckman two stage estimation method to correct the sample selection bias problem.