The rapid economic growth in China has greatly impacted its environment and people’s quality of life across China in the past four decades. In this report, using a panel data set of 31 Chinese provinces from 2004 to 2017 and both panel econometric models and special econometric regressions, I estimate the relationship between environmental pollution (as measured by industrial sulfur dioxide emissions) and economic growth while controlling for four other variables, and find that (i) China’s economic growth impacts its environmental pollution through a decreasing, rather than the more commonly known inverted U-shaped relationship; and (ii) environmental pollution in one province is directly associated with the environmental pollution in its neighboring provinces. Based on the regression results, I recommend that government increase investments in high value-added, renewable, and low-carbon industries and encourage cooperation between neighboring provincial governments to ensure stable and sustainable economic growth while protecting the environment.
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