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Green development is a key aspect of China’s new development strategy, with Pilot Free Trade Zones (PFTZs) serving as critical areas for promoting reforms and openness. This study uses PFTZs as quasi-natural experiments in the Yangtze River Economic Belt, analyzing urban data from 2006 to 2020. The findings reveal that PFTZs significantly enhance urban green development, though effects vary by location and establishment period. Key mechanisms include technological innovation, industrial upgrading, and reduced government intervention. Additionally, PFTZs positively influence green development in both the host and neighboring cities through spatial spillover effects.
Since the reform and opening-up, China has seen rapid economic growth, but this has led to severe environmental pollution due to a development model characterized by high input, high consumption, and low output. This pollution threatens urban sustainability, necessitating urgent action to reduce emissions. According to the “China’s Ecological Environment Status Bulletin 2021,” 35.7% of Chinese cities exceeded environmental control standards. The 20th National Congress of the Communist Party of China emphasized that high-quality development, with a focus on green economic and social growth, is essential for building a modern socialist country. This green development aims for efficiency, harmony, and sustainability through better resource use, clean production, and improved environmental protection measures.
To support economic globalization and enhance openness, China has promoted Pilot Free Trade Zones (PFTZs) to facilitate resource allocation and global market integration. In 2021, the Ministry of Ecology and Environment issued guidelines to enhance ecological protection in PFTZs, aiming for high-quality development. This policy advocates integrating green development into all aspects of PFTZ construction, including manufacturing, services, trade, and supply chains.
Since then, PFTZs like those in Shanghai and Zhejiang have actively implemented green initiatives. Shanghai has incorporated carbon neutrality into its development plans, while Zhejiang has upgraded its logistics systems for better environmental management. These efforts highlight the need to assess the actual impact of PFTZs on urban green development.
The Yangtze River Economic Belt (YREB), spanning nine provinces and two municipalities, serves as a key area for China’s economic transformation with a focus on green development. In 2022, the YREB’s GDP reached 55.98 trillion yuan, with significant contributions to national economic metrics. Since the establishment of the China (Shanghai) PFTZ in 2013, 21 PFTZs have been created, including nine within the YREB. Studying the environmental impacts of these PFTZs is crucial for maximizing their strategic value. However, existing research has mainly focused on coastal PFTZs, leaving the effectiveness of YREB’s PFTZs in replicating coastal successes as an area for further investigation.
This paper examines the impact of Pilot Free Trade Zones (PFTZs) on urban green development in the Yangtze River Economic Belt (YREB) from both theoretical and empirical perspectives. Unlike existing studies that focus on the economic effects of PFTZs, this research highlights their influence on green urban development, addressing a significant gap in the literature. The paper offers several unique contributions: it expands the analysis to include the effects of PFTZ construction, explores these effects using a spatial double difference model with city-level data, and investigates the mediating roles of technological innovation, industrial upgrading, and government intervention. Additionally, it examines the heterogeneous impacts based on the timing and location of PFTZ establishment, and considers the spatial spillover effects on surrounding areas. The study uses panel data from 99 major cities in the YREB to enhance the applicability of its findings. The structure of the paper includes a literature review, research hypotheses, research design, empirical analysis, further research discussion, and conclusions with policy recommendations. This comprehensive approach provides valuable insights for refining PFTZ policies to promote sustainable urban development.
Urban Green Development: Urban green development emphasizes integrating economic, trade, and environmental factors to support ecological sustainability and the green economy. The Green Total Factor Productivity (GTFP) is a key metric for measuring regional green development, assessing both economic and environmental performance. Researchers use methods like Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA) to measure GTFP, with the Global Malmquist-Luenberger (GML) index being particularly effective for tracking changes over time. Influencing factors for GTFP include environmental regulations, low-carbon policies, technological progress, human capital, foreign direct investment, and the digital economy, all contributing to green innovation and entrepreneurship.
PFTZ Policy Impact on Urban Green Development: Pilot Free Trade Zones (PFTZs) are special economic zones aimed at fostering international trade and economic growth through relaxed trade and investment constraints. Studies highlight the positive economic impacts of PFTZs, such as increased economic growth, foreign investment, trade, industrial restructuring, and technological innovation. However, the environmental impact of PFTZs remains debated. Some argue that PFTZs might increase environmental burdens or turn developing countries into “pollution havens,” while others contend that trade liberalization within PFTZs can enhance environmental quality by promoting technological advancements. Empirical studies, particularly on the Shanghai PFTZ, show mixed results regarding the long-term environmental benefits. This study focuses on 99 prefecture-level cities in China’s Yangtze River Economic Belt (YREB) to assess the impact of PFTZs on green development, aiming to offer insights for future PFTZ construction in China.
Achieving high-quality economic development requires balancing economic growth with environmental protection. In China, Pilot Free Trade Zones (PFTZs) are part of the national strategy to open up the economy and should also prioritize green development. This study uses data from 2006 to 2020 to assess the impact of PFTZs on urban green development in cities along the Yangtze River Economic Belt (YREB). The findings indicate that PFTZs positively influence green development by driving technological progress, optimizing industrial structures, and promoting industrial upgrading. The implementation of policies like the negative list management model in PFTZs has reduced government intervention, increased market efficiency, and furthered green development.
The study highlights that the impact of PFTZs varies by region due to factors like geographical location and resource endowments. Thus, it is important to adapt policies to local conditions, taking into account the unique characteristics and development needs of each city along the YREB. Tailoring policies to local realities can enhance the effectiveness of PFTZs in promoting green development.
Moreover, spatial analysis shows that PFTZ policies not only benefit the cities where they are implemented but also have positive spillover effects on neighboring cities. To maximize these benefits, future strategies should focus on coordinated regional development, improving linkages among PFTZs, and facilitating resource, information, and talent flow. Simplifying registration, streamlining approvals, optimizing customs procedures, and enhancing communication infrastructure are crucial steps. Additionally, fostering collaboration among enterprises across the upstream, midstream, and downstream regions can promote sustainable economic growth.
In conclusion, the construction of PFTZs along the YREB has demonstrated its potential in promoting green urban development. By leveraging technological innovation and reducing carbon emissions, PFTZs can enhance urban green development. The government should play a proactive role in guiding these developments, ensuring that policies are effectively tailored to local conditions, and fostering regional cooperation for balanced and sustainable growth along the Yangtze River.
Source:
Wu, W., Tian, X., Liu, Y., & Huang, W. (2024). Research on the impact of pilot free trade zones on urban green development: A case study based on the Yangtze River Economic Belt in China. PloS one, 19(5), e0303626. https://doi.org/10.1371/journal.pone.0303626