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LOCALIZED IMPLEMENTATION: ECONOMIC AND ENVIRONMENTAL IMPACT OF THE BELT AND ROAD INITIATIVE IN CHINA

Published online by Cambridge University Press:  12 November 2021

Haitao Yin ,
Yunyi Hu  and
Xu Tian
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Abstract

China's overcapacities in manufacturing industries, including pollution-intensive industries, served as an important motivation of the Belt and Road Initiative (BRI). The popular Pollution Haven Hypothesis (PHH) therefore expects that the initiative will lead to the relocation of polluting industries from China to the recipients. Focusing on the implementation by local governments, we argue that actual outcomes of the BRI depend on the way local states and businesses respond to the BRI in accordance with their preferences. Through investigating industries’ actual responses to the BRI, we found that pollution-intensive industries have not relocated but rather expanded exports to the BRI countries. This has two implications: on the one hand, it alleviates the overcapacity issue in China and helps sustain the economic performance of the industry; on the other hand, it results in more pollution within Chinese borders and aggravates the environmental challenges facing the country.

Keywords

BRItradeforeign investmentenvironmental impactsBelt and Road Initiative
Type
Article
Information
Journal of East Asian Studies , Volume 21 , Issue 2 , July 2021 , pp. 237 - 257
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Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of the East Asia Institute

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