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Assessing the potential of trade policy in promoting inclusive green growth: Evidence from China

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  • Zhang, Jiangang
  • Cao, Zhimin

Abstract

Globally, the rapid expansion of cross-border e-commerce is accelerating the digitalization of trade, yet it remains uncertain whether this transformation can achieve inclusive and environmentally sustainable economic growth. Against this backdrop, it is crucial to assess whether digital trade reforms can support inclusive green growth (IGG) in line with the United Nations Sustainable Development Goals. This study provides the first evidence on how China’s Cross-border E-commerce Comprehensive Pilot Zones (CECPZ) policy affects IGG. Using data from Chinese prefecture-level cities, we construct a multidimensional IGG index that goes beyond traditional efficiency-based measures, and employ a Double Machine Learning framework to test the causal effects. The findings show that the CECPZ policy significantly promotes IGG, mainly by enhancing digitalization, optimizing employment quality, strengthening intellectual property protection and promoting entrepreneurial activity in green industries. The gains are larger in less developed cities, while neighboring cities experience limited or even negative spillover effects. This study not only reveals that achieving IGG requires clear digital trade rules, enhanced regional coordination and targeted support for lagging regions, but also provides practical guidance for emerging economies seeking to integrate digital trade with inclusive green development.

Suggested Citation

  • Zhang, Jiangang & Cao, Zhimin, 2026. "Assessing the potential of trade policy in promoting inclusive green growth: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 89(C), pages 1005-1025.
    • Handle: RePEc:eee:ecanpo:v:89:y:2026:i:c:p:1005-1025
    DOI: 10.1016/j.eap.2026.01.015
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • 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
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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