Study on the Emission Reduction Effect of China's OFDI in Countries along the Belt and Road

Abstract

With extreme weather events occurring more frequently around the world, urgent action on climate change is becoming increasingly urgent. In the countries along the "Belt and Road", many adopt extensive development methods and face increasing pressure on carbon emissions. This paper explores the impact of China's outward direct investment (OFDI) on carbon dioxide (CO2) emissions from 108 countries along the route that have joined China's Belt and Road Initiative, reported by Xinhua News Agency, from 2005 to 2020. The findings show that China's OFDI helps reduce carbon emissions in host countries, strongly refuting the claim that China's OFDI poses an environmental threat. At the same time, OFDI has promoted the spread of environmental protection technology and industrial upgrading in countries along the route, especially in developing countries, which may bring the phenomenon of "pollution halo". Based on the results of the study, it is suggested that China and countries along the "Belt and Road" should carry out international environmental technology exchanges and cooperation, and strengthen green and low-carbon investment in these countries. These cooperation measures will help push countries along the Belt and road towards a more sustainable development path and jointly address the challenge of global climate change.