Economic Impacts of Ban on Solid Waste Imports: Evidence from China

Authors: SHEN Zekai

Date: 2019

Abstract:

The State Council of China issued ‘the ban on imported solid waste entry promoting the solid waste management system reform implementation plan’ on July 18, 2017. This plan strictly prohibited the import of solid waste with environmental hazards that were of public concern by the end of 2017 while ignoring the fact that the solid waste in the ban were raw materials of many important industries in China. This makes it a question whether the ban will have an impact on the Chinese economy. Using quarterly data from 2015 to 2020 across 31 provinces in China, this paper utilized the difference-in-difference method to investigate the impact of the ban on industrial economy in China. The study found that the ban on imported waste has a significant impact on the secondary industry production of the provinces that relied on imported solid waste, with an estimated average decline of 29.3 billion yuan. This paper also found that the pulp and paper industry experienced a similar negative impact on output, although the plastic industry appeared to be less affected. However, the study revealed that the impact of the ban on the economy was only short term. As the supply of solid waste increases in the domestic market, the economy is expected to eventually return to the pre-ban levels. Although the ban has cause a short-term shock to the economy, it is unlikely to hinder long-term growth. The ban not only protects the environment in China, but also promotes the development of domestic solid waste market, thereby facilitating long-term sustainable development.

Keywords:

Ban on imported waste, DID model, Industrial Economy

Current Status:

Work in Progress