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Impact of China’s National Sword Policy on Waste Import Margins: A Difference-in-Differences Approach

Author

Listed:
  • Bowen Li

    (School of International Business, Zhejiang Yuexiu University, Shaoxing 312030, China)

  • Yifei Mu

    (School of International Economics and Trade, Dongbei University of Finance and Economics, Dalian 116025, China)

Abstract

As a major destination of waste products, China implemented the National Sword Policy (NSP) to regulate the high pollution of waste imports. The existing literature primarily focuses on the motivations behind China’s waste imports and the policy implications of the NSP on China’s waste imports and the global recycling market. This study innovatively focuses on the extensive, intensive, price, and quantity marginal effects of the NSP on China’s waste imports using a difference-in-differences (DID) approach with 26 categories of waste products for 150 countries and regions from 2007 to 2021. The findings indicate that: (1) The NSP has led to declines in the intensive and quantity margins of regulated waste imports, while the price margin has increased. (2) In the years following the implementation of the NSP, the impacts continued to intensify. (3) The NSP has reduced the motivation for exporters to export highly polluting waste to China in search of a “Pollution Haven”. (4) Orientations implementing policies that place the responsibility for products’ environmental impact and encourage waste sorting can effectively alleviate the inhibitory effects of the NSP. These results suggest that the Chinese government needs to strengthen the control of high-polluting and low-value product imports. Waste-exporting countries should encourage enterprises to take responsibility for the entire lifecycle of products and promote waste sorting and treatment facilities. Enterprises should strengthen the environmental impact assessment of the entire product lifecycle and consider materials that are easy to sort and recycle.

Suggested Citation

  • Bowen Li & Yifei Mu, 2024. "Impact of China’s National Sword Policy on Waste Import Margins: A Difference-in-Differences Approach," Sustainability, MDPI, vol. 16(2), pages 1-20, January.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:2:p:776-:d:1320217
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    References listed on IDEAS

    as
    1. Sun, Meng, 2019. "The effect of border controls on waste imports: Evidence from China's Green Fence campaign," China Economic Review, Elsevier, vol. 54(C), pages 457-472.
    2. Higashida, Keisaku & Managi, Shunsuke, 2014. "Determinants of trade in recyclable wastes: evidence from commodity-based trade of waste and scrap," Environment and Development Economics, Cambridge University Press, vol. 19(2), pages 250-270, April.
    3. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    4. Derek Kellenberg, 2015. "The Economics of the International Trade of Waste," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 109-125, October.
    5. Jen Baggs, 2009. "International Trade in Hazardous Waste," Review of International Economics, Wiley Blackwell, vol. 17(1), pages 1-16, February.
    6. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June.
    Full references (including those not matched with items on IDEAS)

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