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China's low-carbon technology trade: Facts and implications

Author

Listed:
  • Gallagher, Kevin P.
  • Liu, Renliang
  • Lu, Jiaqi
  • Yin, Ruyu
  • Yu, Miaojie
  • Bandara, Praveena

Abstract

This study examines China's evolving role in global low-carbon technology (LCT) trade and its impact on climate mitigation. The novel data suggests China's transition from a net importer to a net exporter of LCTs over the past three decades. Employing a gravity-equation framework, we identify the economic and institutional factors that drive bilateral LCT flows. Fixed-effects regressions show that China's LCT exports significantly reduce partner-country CO₂ emissions, measured in total, per-capita, and intensity terms, and that these reductions are larger for high-income partners and for the energy-storage and pollution-control LCTs. We further find that partner-country human capital, political stability, and development assistance amplify these environmental benefits. We conclude with policy recommendations including sustained R&D investment, stable export prices, encouragement of outward FDI, further trade liberalization and improved international dialogue on capacity issues to advance global sustainable trade and decarbonization.

Suggested Citation

  • Gallagher, Kevin P. & Liu, Renliang & Lu, Jiaqi & Yin, Ruyu & Yu, Miaojie & Bandara, Praveena, 2025. "China's low-carbon technology trade: Facts and implications," China Economic Review, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:chieco:v:92:y:2025:i:c:s1043951x25001038
    DOI: 10.1016/j.chieco.2025.102445
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    More about this item

    Keywords

    China's economy; low-carbon technologies; carbon emissions;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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