Does China become the “pollution heaven” in South-South trade? Evidence from Sino-Russian trade

Abstract

The South-South trade has witnessed a rapid development over the years, but its impacts on the participating countries remain unknown. Taking Sino-Russian trade as evidence, a multiregional input-output model is adopted and three types of non-carbon pollutant are chosen to investigate whether China has become the “pollution heaven” in South-South trade. After investigating the industry structure distribution and trade flows of embodied pollution during 2000–2014, the driving factors of the changes in embodied pollutant are further explored by Structural Decomposition Analysis (SDA). The results showed that China has gradually lost the win-win situation of trade surplus and pollution reduction. Since the year 2007, China has totally become a net exporter of embodied pollutions, and has become to bear the environmental costs in the trade with Russia. The expansion of exports to Russia is the main cause of increasing embodied pollutant emission in China, and the progress of emissions reduction technology effect is not sufficient to offset the increase in embodied pollutant emissions. From the sectoral aspect, we find that the exports of textiles, leather, chemical, machinery and electronics are the main causes of pollution outflows. Meanwhile, imports of mineral, transport, metals, coke, petroleum and nuclear fuel to a certain extent eased the pressure of pollution reduction in China.