The Environmental, Economic and Social Welfare Impacts of the CCREW Project in China: A Study Based on the CGE Model

Abstract

Countries around the world have carried out digital transformations to improve their economic resilience. As the largest developing country, China put forward the “channeling computing resources from the East to the West (CCREW)” project in 2022 to balance and promote the development of various regions. This paper constructs a three-region computable general equilibrium model covering the eastern, western, and other regions and evaluates the impact of the project on economic development, social welfare, and carbon emissions in different regions. By simulating the transfer share of the CCREW project, this paper attempts to further reveal the impact of the policy both on regional differences and national development. The results show that the effects of the project are quite different among regions. Our findings can be summarized as follows. (1) In terms of carbon dioxide emissions, the policy will cause emissions to shift from the East to the West. (2) In terms of economic development, the policy will lead to an overall downward trend in the GDP of the eastern and other regions, whereas for the western region, the policy will promote the development of the regional economy. Regional differences may affect the implementation of the policy and its effects. (3) In terms of social welfare, the policy will result in an inverted U-shaped change in social welfare at the national level, which first rises and then falls, and will change from positive to negative when the transfer share exceeds 20%. At the regional level, social welfare in the eastern and other regions will decline, whereas that in the western region will show an inverted U-shaped change that first increases and then decreases. (4) In the short term, the project at the national level has reduced carbon emissions at the expense of economic development and incurred a loss in social welfare.