Impact of China’s National Sword Policy on waste import:A difference-in-differences approach

Abstract

The international trade of waste in China has been growing for several years. In 2017, China announced that it would prohibit the importation of 24 different types of solid waste in 2018 to protect the environment and people’s health. This study investigates the impact of China’s import ban policy on waste, known as the National Sword Policy, using a difference-in-differences approach. We included 116 Chinese trading partners in the period between 2015 and 2019 before and after the import ban policy. We found that China’s policy led to a 30% decrease in its import of unit value. Our results indicate that the trade dampening effect from the import ban policy dominates the quality effect. However, a quality effect exists when separating exporters according to income level. Furthermore, this policy affects Southeast Asian exporters more than non-Southeast Asian exporters.