Embodied Pollution in China-U.S.Trade——An Empirical Study Based on Estimation of Input-Output Technology Matrix

Using input-output tables of China and the U.S., this paper has calculated the pollution embodied in trade and structure of pollution, the balance of emissions embodied in trade （BEET） and the pollution terms of trade （PTT） for 18 manufacturing sectors of China and the US. between 2001 and 2010. The calculation aims to verify whether China has become a ＂pollution haven＂ in bilateral trade with developed countries represented by the U.S., and whether Chinese exports are ＂dirtier＂ compared with imports from the U.S., and further conducting an industry structure analysis and effect decomposition study on pollution embodied in trade in industrial goods between China and U.S.. Result of our research indicates that according to our calculation of the BEET, China remains a country with environmental deficits in bilateral trade with the U.S. while the gaps between pollution embodied in China＇s export and import are narrowing. Pollution embodied in China＇s export has the tendency of increase before decline while pollution embodied in import demonstrates no significant tendency of decline. Through effect decomposition, we further found that the effect of technology arising from the substantial decline of pollution intensity effectively lowered pollution embodied in export and narrowed the environmental deficits of China in its bilateral trade. The effect of scale arising from growing export volumes significantly increased China＇s environmental deficits while the structural effect arising from changes in the structure of import and export is insignificant in reducing environmental deficits. Our calculation of the PTT led to the finding that China＇s export goods are more pollution intensive compared with import goods and that the structure of US exports to China is cleaner than the structure of Chinese exports to the US., which requires further improvements of China＇s import and export structure.