Ecological unequal exchange between China and European Union: An investigation from global value chains and carbon emissions viewpoint

Abstract

European Union (EU) becomes the largest trade partner of China since 2005, and China is the second-largest trade partner of the EU. However, the deepening interdependence between these two major economies also brings worries about the ecological unequal exchange (EUE). Comparing the carbon emissions of China and the EU, the most distinct difference is that the carbon emissions of China have raised greatly from 2010 to 2020, while the carbon emissions of the EU dropped significantly in the same period. The EUE between China and the US has been studied by many scholars, while the EUE between China and the EU is rarely explored in literature, especially during the China-US trade disputes since 2018 and Coronavirus pandemic since 2019. Employing the MRIO model, we assess embodied carbon emission from the value-added perspective of China and EU bilateral trade with 26 sectors, then investigate the embodied carbon emission sectors in import for intermediate and final consumption. The results suggest that global value chains mean “global pollution chains”, too, and emissions produced from the export trade of the EU countries to China much less China's emissions produced from the export trade of China to the EU, which endorse the EUE theory.