The Impact on Environmental Kuznets Curve by Trade and Foreign Direct Investment in China

Based on data of trade, foreign directinvestment (FDI), economic development andenvironmental conditions in China’s 30 provincesbetween 1990-2002, this paper deals with the impacton Environmental Kuznets Curve (EKC) of tradeand FDI in China. The results show no direct impacton EKC of trade, on the one hand. However, tradecontributes significantly to economic growth, andhas played a positive role in introducing advancedpollution prevention technology and environmentalmanagement methodology to China. Therefore, aproactive trade policy will help solve the environmentalpollution problem brought by economic growth. Onthe other hand, there is a positive correlation betweenFDI and pollutant emission, which proves that FDIdoes have some negative influence on environmentin China due to hasty introduction of foreign capitaland inadequate environmental management systemin China.