Chinese Journal of Population, Resources and Environment 18 (2020) 69–78
Contents lists available at ScienceDirect
Chinese Journal of Population, Resources and Environment
Evolution trends and structural decomposition of China's green value-added
over 40 years of reform and opening-up
Jin Fan a, c, *, Wei Wan a, b, Xiaohui Yuan a, b, Fatemeh Ranaei a, c
a
Research Center for the Study of Economic Development Quality, Nanjing Forestry University, Nanjing, 210037, China
b
Research Center for Decision Consulting, Jiangsu Administration Institute, Nanjing, 210009, China
c
College of Economics and Management, Nanjing Forestry University, Nanjing, 210037, China
A R T I C L E I N F O
Keywords:
Green value-added
Non-competitive input-output table
Factor decomposition
Environmental governance
1. Introduction
Throughout the past 40 years, China has remained committed to
unshackling productivity, with economic development as its central task.
As a result, China's GDP grew from RMB 367.9 billion in 1978 to RMB
82.7 trillion in 2017, with an average annual growth rate of 9.5%, which
is higher than the global GDP rate of 2.9% for the same period. Mean-
while, China is a staunch champion of environmental protection, energy
conservation, and ecological civilization, exemplified by the Chinese
government's expediting the formation of a sound ecological system in
primary functional areas. Major progress has been made in energy con-
servation and emission reduction, ecological protection and restoration
projects, and in ecological and environmental governance. Therefore, the
40 years of reform and opening-up represent the history of China's rapid
economic development along with its history of environmental pollution
and governance.
* Corresponding author.
E-mail address: jfan@njfu.edu.cn (J. Fan).
https://doi.org/10.1016/j.cjpre.2019.10.001
Received 22 May 2019; Accepted 13 October 2019
Available online 8 June 2021
2325-4262/© 2021 Shandong Normal University. Publishing services by Elsevier B.V. on behalf of KeAi Communications Co. Ltd. This is an open access article under
the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
journal homepage: www.keaipublishing.com/cjpre
A B S T R A C T
China's 40-year history of reform and opening-up includes rapid economic development as well as pollution and
environmental governance. Using a four-stage division, this study explores the evolution trend and structural
decomposition of China's green value-added by constructing a non-competitive input-output table for environ-
mental pollution from 1978 to 2017. The results indicate that pollution production coefficients increased
continuously, and the green value-added index decreased. Additionally, the structural decomposition showed that
investment and export were critical for economic growth during the period, though they were accompanied by
serious pollution problems. The pollution generated by the raw material (represented by coal mining) and pro-
cessing industries (represented by the textiles) were not controlled effectively. Pollution treatment for these in-
dustries should be strengthened in the future. The study has implications for government officials, policy makers,
and academics. First, China should make green development a core concept for economic development, increase
environmental pollution governance, develop a “green GDP,” incorporate the external costs of environmental
pollution into the national economic accounting system. Second, it must change the investment and export
structure as well as the traditional economic development pattern that exacerbates pollution. Specifically, the
country should develop industries with low pollution and promote the export of industries producing high value-
added products and increase green GDP per capita. Third, it should closely monitor the development of highly
polluting industries. Upgrading technology to reduce pollution and strengthening pollution treatment will reduce
the number of polluting industries and improve environmental governance efficiency.
China's economic growth has been consistent with the changing trend
of environmental conditions. Although China's GDP per capita has been
rising rapidly since the reform and opening-up, environmental pollution,
especially with regard to solid and gaseous industrial waste, has been
increasing. The impact of economic growth on environmental conditions
has fluctuated through stages. Economic development stages during the
past 40 years determine the varieties of environmental consciousness
(Gao, 2018). Especially after China's accession to the World Trade Or-
ganization in 2001, environmental pollution deteriorated quickly. Since
2012, when ecological civilization was put high on the agenda, the
average person and land carrying capacity of waste water and solid waste
has decreased; however, the average person-land industrial waste
gas-carrying capacity still presented a rising volatility. Furthermore, a
discrepancy remains between economic growth and pollutants. While
pollution of industrial wastewater remained steady at the beginning,
recent years have seen a decreasing trend.
J. Fan et al.
Therefore, combining economic growth and the evolving trend of
value-added of the ecological environment with green attributes with
structural decomposition helps to examine the entire process. Hence, this
study aims to provide a reference for decision makers to progress through
the five-sphere integrated plan (economic construction, political con-
struction, cultural construction, social construction and eco-civilization
construction) toward the “beautiful China” goal. This paper explored
the evolution trend and structural decomposition of China's green value-
added by constructing a non-competitive input-output table for China's
environmental pollution from 1978 to 2017.
This paper is presented in six parts. Following the introduction (1),
Section 2 outlines the extant literature on the topic. Section 3 offers the
methodology of the study, outlining the theoretical model, research
methods, and data sources. Section 4 presents the results that calculate
the evolution trend and the stage division of China's green value-added
since the reform and opening-up and examines industry characteristics
of each stage. Section 5 analyzes and discusses the changes and devel-
opment of green value-added since the reform. Finally, Section 6 con-
cludes and presents limitations and implications.
2. Literature review
As a supplement to the GDP accounting, green GDP refers to the
remaining GDP after deducting the value of natural resource depletion
and environmental pollution loss (Cao et al., 2014; Giannetti et al., 2014;
Li and Fang, 2014; Ouyang et al., 2017; Talberth and Bohara, 2006; Xu,
2004; Zhang, 2004). Launched by the United Nations in 1993, the System
of Environmental Economic Accounting (SEEA)1 (most recent version in
2012), has the greatest influence on the basic concepts, framework
structure, estimation methods of resource depletion and environmental
degradation for an integrated environmental and economic accounting
system. It applies relevant accounting results that adjust for traditional
national economic accounting indicators, including input-output table.
Input-output research on expanding resources and the environment has
always at the core of classic input-output technology textbooks due to its
characteristics being in general equilibrium analysis theory (Chen and
Yang, 2011; Miller and Blair, 2009; Zhong et al., 1993).
Research on green GDP in China began in the 1990s, as a result of the
upsurge in theoretical research and policy implementation on sustainable
development and circular economy; however, the research reached a
climax in 2006, and then fell silence for nearly a decade. The 18th Na-
tional Congress of Chinese Communist Party increased ecological prog-
ress to an unprecedented level and provided a plan to promote the
development of socialism with Chinese characteristics in a five-pronged,
integrated method, including a proposition from the Ministry of Envi-
ronmental Protection to reignite research on green GDP. From the
perspective of theoretical research and empirical analysis, common
research methods include input-output method, SEEA, and emergy
analysis, among which input-output expansion is the most commonly
used (Lei and Li, 2006; Lei and Zhao, 2011, 2014; Li et al., 2016; Liang
et al., 2016; Liao and Zhang, 2018; Ma et al., 2014; Mao and Yang, 2018;
Qiu and Shi, 2018). For green GDP accounting research, green
input-output tables, and green social accounting matrices, researchers
use the officially published input-output table, combine research objects,
and draw on the environmental yearbook for data. The Chinese Envi-
ronmentally Extended Input-Output (CEEIO)2 database, jointly devel-
oped and updated by the University of Michigan and Beijing Normal
University, is commonly used.
Previous research on China's green GDP evolution trend has included
the following perspectives. First, prior to 2013, the China's resource and
environment costs were high, and the green GDP index was rising in
volatility (Qu, 2013; Shen et al., 2017). Second, urbanization was
1 4
https://seea.un.org/.
2
http://www.ceeio.com.
70
Chinese Journal of Population, Resources and Environment 18 (2020) 69–78
accompanied by serious pollution emission problems (Qu, 2013; Wang
and, Wang, 2011). Wang and Wang (2011) analyzed urbanization
through the input-output method and found that consumption increase
caused by urbanization, relative to consumption caused by population
expansion, exacerbated pollution emissions. Third, from 2003 to 2014,
the difference between China's green GDP and its traditional GDP was
significant, though it did demonstrate a downward trend (Li et al., 2016;
Shen et al., 2017).
Existing research on green GDP accounting has two main limitations.
The input-output table used to calculate green GDP is competitive and
fails to distinguish between domestic and imported products. Therefore,
the accounting cannot fully reflect the reality of openness. Additionally,
extant studies use limited time ranges (i.e., certain year, period after the
reform and opening-up, etc.), creating a gap in research examining the
full time span since the reform and opening-up.
Due of globalization, the trend to compile and use Chinese non-
competitive input-output tables exists (Lau et al., 2007; Qi et al.,
2008). Distinguishing between general trade and processing trade in
three production sectors (production of domestic demand (D), processing
to export production (P), and general export and other production (N)),
the DPN input-output table is compiled by the prediction science research
center of the Chinese Academy of Sciences and is highly influential
(Chinese Global Value Chain Research Group, 2014; Zhu et al., 2013).
The DPN input-output table presents the country's response to the
WTO/OECD “made in the world” initiative and is based on the compet-
itive input-output table published by the national bureau of statistics.
This study synthesizes the competitive environmental input-output
table of the CEEIO database and the non-competitive DPN input-output
table of the Chinese Academy of Sciences to construct the green non-
competitive input-output table for this research. This study develops
non-competitive input-output tables based on extended environmental
pollution by combining existing input-output table data with relevant
environmental pollution and governance data. Additionally, based on the
developed non-competitive input-output tables of environmental pollu-
tion from 1978 to 2017, this study examines the change of green value-
added and its factor decomposition during the 40 years since the reform
and opening-up and further analyzes the change of pollution emissions
and governance of major industries.
3. Methodology
3.1. Compiling and updating of Chinese environmental pollution extended
input-output table
1) Data sources and industry division. The study uses data divided
into non-competitive input-output table data and environmental pollu-
tion data. The non-competitive input-output table (DPN tables) data for
1987–2012 are from the prediction science research center of the Chi-
nese Academy of Sciences.3 The environmental pollution data for
1992–2012 are from the CEEIO database,4 jointly developed by the
University of Michigan and Beijing Normal University. As the number of
industries in the data differs, we combine the CEEIO table and DPN table
into 25 sectors (Table 1).
Environmental pollution can be classified into three types: air pollu-
tion, water pollution, and solid waste pollution. The specific types of
pollutants and data sources are shown in Table 2.
The total amount of environmental pollution generated in 1978–1987
is calculated from the 1992 data. Total amount of environmental
3
The division of the DPN table varies from 1987 to 2012. There are 33 sectors
from 1987 to 1992, 40 sectors beginning in 1997, 42 sectors beginning in 2002,
and 139 sectors beginning in 2012. Based on the comprehensive consideration
of the DPN and CEEIO tables over the years, tables are merged into 25 sectors.
CEEIO has two kinds of input-output tables with 45 sectors and 91 sectors.
This study uses data from the table with 45 sectors.
J. Fan et al. Chinese Journal of Population, Resources and Environment 18 (2020) 69–78

Table 1 China Statistical Yearbook on Environment (1992–2016). Data of envi-

Sector consolidation table.
Serial Sector (DPN)
number
1 Agriculture, forestry, animal
husbandry and fishery
2 Coal mining and processing
3 Crude petroleum and natural
gas
4 Metal mining
5 Other non-metallic mineral
mining
6 Food production and tobacco
processing
7 Textiles
8 Sewing and leather products
9 Wood processing and
furniture manufacturing
10 Papermaking and stationery
manufacturing
11 Petroleum refining, coking,
and nuclear fuel
12 Chemicals
13 Non-metallic mineral
products
14 Metal smelting and
processing
15 Metal products
16 General and special
equipment manufacturing
industry
17 Transport equipment
18 Electrical equipment
19 Electronic equipment
20 Instruments, meters, and
other measuring equipment
21 Arts and crafts products and
other manufacturing products
22 Electricity, gas, and hot water
Industry (CEEIO)
Crop cultivation, forestry, livestock,
livestock products, and fishery
Coal mining and processing
Crude petroleum and natural gas
Ferrous metal ore mining
Non-ferrous metal ore mining, non-
metallic minerals, and other mining
Food processing, food production,
beverages, and tobacco products
Textiles
Wearing apparel, leather, furs, down,
and related products
Sawmills, fiberboard, products of
wood, bamboo, cane, palm, straw, and
furniture
Paper and paper products, printing
and record medium reproduction,
cultural products, toys, sporting,
athletic, and recreational products
Petroleum refining, coking, and
nuclear fuel
Chemical materials, chemical fibers
Rubber products, plastic products, and
non-metallic mineral products
Ferrous metal smelting and
processing, non-ferrous metal
smelting and processing
Metal products
General purpose machinery, special
purpose machinery
Transport equipment
Electrical equipment
Electronic equipment
Instruments, meters, and other
measuring equipment
Arts and crafts products and other
manufacturing products
Electricity and heat production and
ronmental governance funds and pollution disposal amount of each
sector from 1978 to 1987 are calculated according to the data of 1992.
2) Calculation of missing year data. As the input-output table of 1987
lacks data and the latest input-output table is only updated until 2015, we
use the interpolation method to calculate data for 1978, 1982, 1987, and
2017. Combined with the final demand data available for 1978, 1982,
1987, and 2017, we use the proportion of final demand for each sector to
ensure calculation accuracy and reliability. Considering the balance of
input-output tables, we construct non-competitive input-output tables for
1978, 1982, 1987, and 2017. Environmental pollution data for 1978,
1982, 1987, and 2017 are calculated by the total amount of pollution
generated in proportion to the total amount of intermediate demand used
by each industry.
3) IO table model based on environmental pollution extension. Since
environmental pollution can be classified as air, water, and solid waste
pollution, this study introduces three pollution control and three pollu-
tion production sectors based on the traditional input-output table.
Following Lei and Zhao (2011), the unit governance price of waste gas,
wastewater, and solid waste is calculated using the amount of waste
governance capital over the years and the corresponding amount of waste
governance. The unit governance price is used as the opportunity cost of
the three pollutants to convert the physical quantity of pollution into the
value quantity. The unit governance prices by waste types are shown in
Table 3.
We calculate the value-added and intermediate input of the decon-
tamination sectors through the amount of waste governance capital over
the years (Table 4).
Adding the pollution generation and decontamination sectors, we
construct the non-competitive input-output model for expanding envi-
ronmental pollution (Table 5).
3.2. Technical coefficients
According to the horizontal equilibrium relationship in Table 5,
X
n

production and supply supply, gas production and supply, zDij þ fiD ¼ xi i ¼ 1; 2; …; n (1)
j¼1
industry water production and supply
23 Construction Construction
24 Transport and post Transport and post X
n

ij þ fi ¼ mi
zM i ¼ 1; 2; …; n
M
25 Other services Other services, scrap and waste (2)
recycling j¼1

where AD ¼ ðaDij Þ ¼ ðzijD =xj Þ is the domestic product direct consumption

Table 2 coefficient matrix, andAM ¼ ðaM
ij Þ ¼ ðzij =xj Þ is the imported product
M

Categories of pollution and data sources. direct consumption coefficient matrix.

Type Specific pollution Equations (1) and (2) are expressed in matrix form as:
Air pollution Carbon dioxide, Methane, Nitrous oxide, Sulfur dioxide, Nitrogen
AD X þ F D ¼ X (3)
oxides, Soot and dust, Atmospheric Hg, Atmospheric As,
Atmospheric Se
Water pollution Chemical oxygen demand, Ammonia nitrogen, Phosphorus, AM X þ F M ¼ M (4)
Petroleum pollutants, Volatile phenol, Cyanide, Aquatic Hg,
Aquatic Cd, Aquatic Cr, Aquatic Pb, Aquatic As, Aquatic Cu, Equation (3) can be summarized as:
Aquatic Zn
Solid waste Industrial solid wastes, Agricultural plastic film, Crop straws,
 1
X ¼ I  AD F D ¼ BD F D (5)
Pollution Animal manure, Sludge, Medical waste, Household waste

Sources: Detailed pollutant generation data from 1992 to 2012 are obtained from
the CEEIO database jointly developed by the University of Michigan and Beijing
Normal University (http://www.ceeio.com).
pollution generated in 2017 is from the China Statistical Yearbook (2018).
Data of pollutant generation in different sectors are divided according to
the proportion of total amount of intermediate demand used in each
sector.
Data on the total amount of environmental governance funds and
pollution disposal amount of each industry during 1992–2015 is from the
whereBD ¼ ðI  AD Þ1 is the complete demand coefficient matrix of the
non-competitive input-output model, namely the Leontief inverse matrix.
BD represents total output of the domestic product required to produce
one unit of final demand.
Suppose V is the matrix of the value-added coefficient, whose diag-
onal elements are avii ¼ vali =xi , then according to the input-output
theory, the value-added can be expressed as:
Val ¼ VBD F D (6)
Bv ¼ VB , Bv is the matrix of value-added inducement coefficient.
D

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J. Fan et al. Chinese Journal of Population, Resources and Environment 18 (2020) 69–78

Table 3
Unit governance prices by waste type.
Year Amount of disposal (ten thousand tons) Cost (one hundred million RMB) Unit governance price (ten thousand RMB/ton)

Waste gas Waste water Solid waste Waste gas Waste water Solid waste Waste gas Waste water Solid waste

1992 7468 1,236,213 25,555 21 30 8 0.00281 0.000024 0.00031

1997 13,959 2,392,780 5186 28 72 6 0.00201 0.000030 0.00116
2002 15,807 1,744,048 15,497 69.8 71.5 16.1 0.00442 0.000041 0.00104
2007 29,095 2,047,110 32,473 275.3 196.1 18.3 0.00946 0.000096 0.00056
2012 80,927 2,032,514 67,992 257.7 140.3 24.7 0.00319 0.000069 0.00036
2015 185,538 4,440,992 69,645 521.81 118.41 16.15 0.00281 0.000026 0.00023

Table 4
Value-added and intermediate input of the decontamination sectors.
Year Industrial value-added rate (%) Cost Value-added of the decontamination Intermediate input of decontamination
sectors sectors

Waste Gas Waste water Solid waste Waste Gas Waste water Solid waste Waste Gas Waste water Solid waste

1992 21.0 21.00 30.00 8.00 4.41 6.30 1.68 16.59 23.70 6.32
1997 29.0 28.00 72.00 6.00 3.16 8.14 0.68 24.84 63.86 5.32
2002 29.8 69.80 71.50 16.10 6.98 7.15 1.61 62.82 64.35 14.49
2007 28.9 275.30 196.10 18.30 41.02 29.22 2.73 234.28 166.88 15.57
2012 22.9 257.70 140.30 24.70 20.87 11.36 2.00 236.83 128.94 22.70
2015 20.0 521.81 118.41 16.15 104.52 23.72 3.23 417.29 94.70 12.91

Note: (Unit: million RMB).

Table 5
Non-competitive input-output model for expanding environmental pollution
Intermediate Use Decontamination sector Final Use (F) Total output

1,…,n Consumption Investment Export

Domestic intermediate input D

z11 … D
znn CD IN D ED X
… zijD … PE
D
zn1 … D
znn
Imported Intermediate input M
z11 … M
z1n CM IN M M
… zijM …
M
zn1 … M
znn
Pollution generation CE
Value-added Val
Total input X

Notes: Superscript D represents domestic products, and superscript M represents imported products. Zij represents intermediate input. PE represents the decontamination
value of the pollution control sectors. CE represents the cost of pollution generated by the pollution-producing sectors. C, IN, and E represent consumption, investment,
and exports, respectively. X represents total output (total input). M represents total imports, and Val represents value-added.

Since net exports account for a small proportion of GDP, the net export GVal ¼ Val  ðCE  PEÞ (8)
rate cannot fully reflect the pulling effect of exports on GDP. If the ratio of
exports to GDP is taken as the driving force of exports, the sum of con- whereCE represents the amount of pollution generated by the pollution-
sumption, investments, and exports will be greater than 100%, which is producing sectors, PE represents the amount of pollution removed by the
illogical (Shen, 2009). Based on Shen (2009), we use the non-competitive pollution governance sectors, ðCE  PEÞrepresents the cost of environ-
input-output table to reasonably calculate the pulling effects of domestic mental pollution, and GVal is the green value-added. The rate of green
consumption, investment, and export on the economy. value-added is calculated as V e ¼ GVal=X. Additionally, we develop
According to Equation (6), the final use of domestic products can be several coefficients related to environmental pollution:
distinguished as:
Pollution generation coefficient CEP ¼ CE=Val (9)
Val ¼ Bv F ¼ Bv C þ Bv IN þ Bv E
D D D D
(7)
Decontamination coefficient QEP ¼ PE=CE (10)
In Equation (7), Bv has already reflected the deduction of the trans-
ferred value of imported products contained in one unit of final products
Green value-added index GVI ¼ GVal=Val (11)
(Shen, 2009). Therefore, the last three items represent the real pulling
effect of domestic consumption, investment, and export, respective, on
4. Results
the economy.
While GDP measures the overall level of economic activity in a
4.1. Evolution trend and stage division
country, it forms only part of the overall social welfare index. It fails to
consider the cost of natural environmental pollution caused by produc-
Qu (2013) divided China's environmental protection process into four
tion. Using the non-competitive IO table based on environmental pollu-
segments:
tion expansion, the value-added after deducting the cost of
environmental loss is defined as green value-added:

72
J. Fan et al.
1. Environmental protection consciousness (1972–1978)
2. Spread of environmental pollution and construction of environmental
protection system (1979–1992).
3. Aggravation of environmental pollution and pollution control
governance (1993–2001).
4. Comprehensive environmental protection governance (2002–2012).
This study examines segments 2, 3, and 4, beginning in 1978, which
was the first year of the reform and opening-up. Using China's human and
land waste carrying capacity and following Qu (2013) and Gao (2018),
we divide the 40 years since the reform and opening-up into four stages
(Fig. 1):
1. Stage I (1978–1992)—Spread of environmental pollution and initial
governance: Waste gas and solid waste discharge gradually rose, but
waste water discharge was controlled to a certain extent, and the
average carrying capacity of human and land industrial waste water
gradually declined.
2. Stage II (1992–2002)—Intensified environmental pollution and scale
governance: The average industrial carrying capacity of human and
land waste gas and solid waste increased. Waste gas and solid waste
aggravated environmental pollution. However, environmental con-
trol of waste water pollution was strengthened.
3. Stage III (2002–2012)—Environmental deterioration and compre-
hensive governance: The average carrying capacity of human and
land industrial waste gas and solid waste reached an average annual
growth rate of about 15%, and the impact of waste gas and solid waste
on environmental pollution was significantly increased. However, the
treatment of waste water discharge was further integrated, demon-
strating that the average carrying capacity of human and land in-
dustrial wastewater continuing to decline.
4. Stage IV (2012–2017)—Moderate control of environmental pollution
and eco-civilization construction: This stage saw a macro economic
transition from Old Normal to New Normal, and quality became the
main economic growth goal. Hence, the pollution deterioration trend
represented by waste gas and solid waste was treated to a certain
extent. The rapid rise in the average carrying capacity of human and
land industrial waste and solid waste was under control, and eco-
civilization construction advanced with the accelerated treatment of
waste water discharge. The average carrying capacity of human and
land industrial waste water decreased.
Fig. 1. Stages of environmental pollution and governance during the 40 years of
reform and opening-up. Source: China Statistical Yearbook on Environ-
ment (1983–2017).
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Chinese Journal of Population, Resources and Environment 18 (2020) 69–78
Considering environmental pollution and governance stages, this
study calculates the proportion of green value-added driven by domestic
products during the 40 years of reform and opening-up using Equation
(10) (Table 6). Comparing the value-added measurement without envi-
ronmental pollution consideration (Table 7) the following results were
calculated (Shen, 2009).
From 1978 to 2017, consumption, investment, and export showed the
same evolutionary trend for value-added, gradually forming the evolu-
tionary feature:
Consumption-driven → inner drive of consumption-investment → outer
drive of investment-export.
At the beginning of the reform and opening-up period, consumption
played a larger role than investment and export in driving the value-
added. However, the deepening of reform and the expansion of
opening-up resulted in a significant decline in consumption-driven eco-
nomic growth and an increase in the critical impact of investment and
export. The contribution of investment to green GDP increased from
19.1% in 1978 to 36.97% in 2017. The contribution of export increased
from 3.68% to 31.00% in the same period, representing an increase of 7.5
times. Consequently, the simultaneous pollution driven by investment
and export was serious, especially in Stages II and III.
Stage I was driven heavily by consumption. The proportion of green
value-added driven by consumption of domestic products reached
77.22% during this period. Although the impact of consumption on
economic growth decreased, the average contribution rate of consump-
tion in Stage I reached 62.26%. Corresponding contribution rates of fixed
capital formation and export to green GDP reached 26.30% and 11.44%,
respectively. Moreover, environmental pollution spread gradually, and
the per capita unit area of industrial waste gas emissions and solid waste
generation slowly increased.
In Stage II, consumption drove economic growth, although invest-
ment promoted economic growth as well. Table 6 shows that the pro-
portion of green value-added driven by consumption decreased from
55.17% in 1992 to 52.42% in 2002. During the same time, the proportion
of green value-added driven by fixed capital formation remained around
30%. Compared to the average of 26.30% in Stage I, the contribution rate
of investment to economic growth increased significantly. Consequently,
the environmental pollution growth rate also accelerated. Fig. 1 shows
that pollution due to industrial waste gas and solid emissions were
constantly rising.
Stage III saw investment expansion and the contribution rate of
export to value-added increased significantly. With China's accession to
the WTO in 2002, foreign trade grew rapidly. In spite of the impact of the
global economic crisis on the export-oriented model after 2007, export-
oriented economic growth remained crucial role in Stage III. The pro-
portion of green GDP driven by export significantly increased from
16.9% in Stage II to 20.04% in Stage III. Simultaneously, domestic con-
sumption's impact on economic growth decreased from more than 50%
to about 45% in Stage III. The economic model changed from
consumption-driven to investment- and export-driven. However, envi-
ronmental pollution saw a significant increase; exhaust emissions and
solid waste generation rose rapidly, representing a rapidly worsening
trend of pollution.
Stage IV saw economic growth driven by investment and export. The
proportion of GDP driven by investment began to exceed that of con-
sumption, and the proportion of GDP driven by export further increased.
As shown in Table 6, by 2017, the proportion of green GDP driven by
investment was 36.97%; in contrast, the proportion of consumption
decreased to 32.03%, 4.94 percentage points lower than that of invest-
ment. At the same time, export increased in driving economic growth,
and the proportion of green GDP driven by export reached 31%. How-
ever, unlike Stage III, investment- and export-led growth were not
accompanied by a simultaneous deterioration in environmental pollu-
tion. This is the result of a series of institutional policies issued by the
Central Committee and the State Council of the 18th National Congress of
the Chinese Communist Party. Quality of economic development became
J. Fan et al. Chinese Journal of Population, Resources and Environment 18 (2020) 69–78

Table 6
Proportion of green value-added by domestic final products in 1978–2017.
Year Proportion of green value-added by domestic final products Stage of development Average proportion of green value-added by domestic final products

Consumption Fixed capital formation Export Consumption Fixed capital formation Export

1978 77.22% 19.10% 3.68% Stage I (1978–1992) 62.26% 26.30% 11.44%

1982 58.02% 26.54% 15.44%
1987 58.61% 29.30% 12.09%
1992 55.17% 30.27% 14.56% Stage II (1992–2002) 53.61% 29.49% 16.90%
1997 53.25% 29.16% 17.59%
2002 52.42% 29.03% 18.55% Stage III (2002–2012) 47.99% 31.97% 20.04%
2007 45.57% 30.52% 23.91%
2012 45.98% 36.37% 17.65% Stage IV (2012–2017) 39.00% 36.67% 24.33%
2017 32.03% 36.97% 31.00%

Table 7
Proportion of value-added by domestic final products in 1978–2017.
Year Proportion of value-added by domestic final products Stage of development Average proportion of value-added by domestic final products

Consumption Fixed capital formation Export Consumption Fixed capital formation Export

1978 75.07% 20.14% 4.79% Stage I (1978–1992) 60.41% 27.71% 11.88%

1982 54.71% 29.92% 15.37%
1987 56.99% 30.24% 12.77%
1992 54.86% 30.54% 14.59% Stage II (1992–2002) 53.38% 29.70% 16.92%
1997 53.11% 29.28% 17.60%
2002 52.18% 29.26% 18.56% Stage III (2002–2012) 47.63% 32.25% 20.12%
2007 44.86% 31.03% 24.11%
2012 45.85% 36.46% 17.69% Stage IV (2012–2017) 38.92% 36.73% 24.35%
2017 31.99% 37.01% 31.01%

Note: Environmental pollution is not considered.

the main goal during this stage, indicating that environmental pollution
had been controlled to a certain extent. Exhaust emissions growth
slowed, and the output of waste water and solid waste was decreased.
In terms environmental pollution, investment and export had less
impact on the value-added based on green GDP accounting. Comparing
Tables 6 and 7, although the evolution trend of consumption, investment,
and export pulling the change of value-added is consistent, each impact is
different. Under the investment and export economic growth model,
environmental pollution is serious, and economic growth quality is low.
To better account for this phenomenon, Fig. 2 shows the changes in
China's green value-added index (the ratio of green value-added and
value-added) and net pollution per capita from 1978 to 2017. A gap
exists between per capita value-added and per capita green value-added;
the difference represents net pollution. Since the reform and opening-up,
net pollution per capita has risen, and different rising rates exist at
different stages. Therefore, considering the environmental pollution
factor, the green GDP is low. Meanwhile, the impact of consumption,
investment, and export on the value-added is small. These gaps and
changes reflect that environmental pollution and its treatment have been
closely related to China's economic development and the link between
China's economic development and environmental issues is also the core
of this study.
4.2. Coefficient characteristics by stage
We use Equations (9)–(11) to calculate China's total pollution gen-
eration coefficient, decontamination coefficient, and green value-added
index in the four stages from 1978 to 2017 (Table 8).
Table 8 indicates that since the reform and opening-up, China's
pollution generation coefficient has increased, while the decontamina-
tion coefficient and the green value-added index have decreased. During
the first three stages the pollution generation coefficient has been
increasing, especially from Stage II to Stage III. During this period, the
pollution generation coefficient increased by two steps. Meanwhile, the
decontamination coefficient and the green value-added index have been
steadily declining, indicating that environmental pollution in China was
worsening in these stages, and the environmental pollution problems
caused by economic growth were accumulating. In 2006, during Stage
III, major pollutant emissions (sulfur dioxide, nitrogen oxides, chemical
oxygen demand, etc.) reached an all-time high (Qu, 2013). Compared to
Stage III, the pollution generation and the decontamination coefficients
in Stage IV decreased, while the green value-added index recovered
slightly. This reflects China's environmental protection efforts after the
18th National Congress of the Chinese Communist Party, which
increased environmental pollution considerations in economic
development.
The study analyzes pollution generation in different development
stages from the perspective of industry (Table 9). Overall, petroleum
refining, coking, and nuclear fuel processing industries, electricity, gas
and heat production and supply industries, non-metallic mineral prod-
ucts, metal smelting and processing industries, and other heavy in-
dustries have higher pollution generation coefficients and lower green
Table 8
Coefficient characteristics by stage.
Stage Pollution generation Decontamination Green value-
coefficient coefficient added index

Stage I 0.0174 0.1835 0.9850

Stage II 0.0223 0.0625 0.9791
Stage 0.0326 0.0388 0.9685
III
Stage 0.0303 0.0154 0.9702
IV
Fig. 2. Change of green value-added index and net pollution per capita.5,6.

74
J. Fan et al. Chinese Journal of Population, Resources and Environment 18 (2020) 69–78

Table 9 and export on value-added and green value-added demonstrates differ-

High pollution generation coefficient and low green value-added index of top ences in externalities caused by environmental pollution. Although in-
industries by stage. vestment and export have played a key role in 40 years of economic
Rank Pollution generation Green value-added index growth, they have been accompanied by serious pollution problems.
coefficient Especially in Stages II and III, the pollution generation coefficient was
Overall 1 Petroleum refining, coking, Petroleum refining, coking, rising, and the green value-added index declined. At the same time,
and nuclear fuel and nuclear fuel comparing industries offers insights. The petroleum refining, coking, and
2 Electricity, gas, and heat Electricity, gas, and heat nuclear fuel processing industries, electricity, gas, and heat production
production and supply production and supply
and supply industries, non-metallic mineral products industry, metal
3 Non-metallic mineral products Non-metallic mineral products
4 Metal smelting and processing Metal smelting and processing smelting and processing industries, and other heavy industries have the
5 Chemical industry Coal mining and processing greatest impact on pollution, and the rapid development of these in-
Stage I 1 Petroleum refining, coking, Petroleum refining, coking, dustries in Stages III and IV was accompanied by rising pollution.
and nuclear fuel and nuclear fuel Therefore, using the structural decomposition analysis method to study
2 Electricity, gas, and heat Non-metallic mineral products
production and supply
the relationship between economic growth and environmental pollution
3 Chemical industry Metal smelting and processing is essential.
4 Non - metallic mineral Electricity, gas, and heat
products production and supply 5. Analysis and discussion
5 Metal smelting and processing Instruments, meters, and other
measuring equipment
Stage II 1 Petroleum refining, coking, Petroleum refining, coking, 5.1. Theoretical model of structural decomposition of green value-added
and nuclear fuel and nuclear fuel
2 Electricity, gas, and heat Electricity, gas, and heat This study defines two different periods t þ 1 and t, and uses sub-
production and supply production and supply scripts to represent them. According to Equation (6), we structurally
3 Non-metallic mineral products Non-metallic mineral products
decompose the increment of green value-added in the two periods after
4 Metal smelting and processing Metal smelting and processing
5 Instruments, meters, and other Instruments, meters, and other deducting environmental loss cost. Due to multi-factor interaction effect,
measuring equipment measuring equipment different factor decomposition methods have different forms. The
Stage 1 Electricity, gas, and heat Electricity, gas, and heat average value of polar decomposition (Chen, 2010; Liu et al., 2017) is
III production and supply production and supply
obtained as:
2 Petroleum refining, coking, Petroleum refining, coking,
and nuclear fuel and nuclear fuel
1  
3 Non-metallic mineral products Non-metallic mineral products ΔGVal ¼ Vtþ1
e
BDtþ1 Ftþ1
D
 Vte Bdt FtD ¼ ΔV e BDtþ1 Ftþ1 D
þ Bdt FtD
4 Metal smelting and processing Metal smelting and processing 2
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
5 Instruments, meters, and other Coal mining and processing Valueadded rate effect
measuring equipment (12)
Stage 1 Electricity, gas, and heat Electricity, gas, and heat 1 e  1 e D 
þ Vtþ1 ΔBD FtD þ Vte ΔBD Ftþ1 D
þ Vt Bt þ Vtþ1 e
BDtþ1 ΔF
IV production and supply production and supply 2 2
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl} |fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
2 Non-metallic mineral products Non-metallic mineral products Sectoral structure effect Final product effect
3 Petroleum refining, coking, Petroleum refining, coking,
and nuclear fuel and nuclear fuel The green value-added rate can be further decomposed as
4 Metal smelting and processing Metal smelting and processing
5 Coal mining and processing Coal mining and processing GVal Val  ðCE  PEÞ ðX  Zd  ZmÞ  ðCE  PEÞ
Ve ¼ ¼ ¼ (13)
X X X
value-added indices. Although the process of heavy industry accelerates where Zd represents domestic intermediate products (row vector), and
rapid economic growth, the growth is based on resource consumption, Zm represents imported intermediate products (row vector). We define
and environmental pollution is unsustainable with low green value- ðCEPEÞ
H d ¼ Zd
XH
m
¼ Zm
XH ¼
e
X , and then have:
added index. However, changes in the coefficient ranking by industry
in each stage demonstrate that pollution emissions of petrochemical in-
V e ¼ 1  Hd  Hm  He (14)
dustries (petroleum refining, coking, nuclear fuel processing, and
chemicals) are controlled to some extent in Stage III and significantly Using Equation (14), we obtain:
after Stage III.
ΔV e ¼  ΔH d  ΔH m  ΔH e (15)
4.3. Summary The domestic product complete consumption coefficient matrix BD is
further decomposed as:
Considering the results, environmental pollution must be considered 0 1 0 1 0 1
and compared by stage from the perspective of green GDP accounting to b11 ⋯ b1n b11 ⋯ 0 0 ⋯ b1n
analyze the driving effect of consumption, investment, and export on @⋮ ⋱ ⋮ A¼@⋮ ⋱ ⋮ A þ @⋮ ⋱ ⋮ A (16)
value-added. Comparing the pulling effects of consumption, investment, bn1 ⋯ bnn 0 ⋯ bnn bn1 ⋯ 0

Equation (16) can be abbreviated as BD ¼ N þ T, and from this we

5 obtain ΔBD ¼ ΔN þ ΔT.
The results of this study are consistent with the trend of green and tradi-
Therefore, the change of green value-added in Equation (8) can be
tional GDP per capita and the difference between 1997 and 2013 calculated by
Shen et al. (2017). The specific value is different, because the two studies differ further decomposed as:
in the definition range of green GDP accounting.   1  
1
6
From 2012 to 2017, it is not contradictory for net pollution per capita and ΔGVal ¼  ΔH d BDtþ1 Ftþ1 D
þ Bdt FtD  ΔH m BDtþ1 Ftþ1 D
þ Bdt FtD
green value-added index to increase at the same time. Proof: Net pollution per
2 2
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
capita ¼ ðCE  PEÞ=N, where N represents population, and higher net pollution Domestic intermediate product effect Imported intermediate product effect

per capita means largerðCE  PEÞ. Green value-added index:GVal= Val ¼ ½Val 
ðCE  PEÞ=Val ¼ 1  ðCE  PEÞ=Val. When ðCE PEÞ=Val decreases, which
means that the growth rate of Val is greater than that of ðCE  PEÞ, the net
pollution per capita and green value-added index increases.

75
J. Fan et al. Chinese Journal of Population, Resources and Environment 18 (2020) 69–78

1   1 e
 ΔH e BDtþ1 Ftþ1 D
þ Bdt FtD þ Vtþ1 ΔNFtD þ Vte ΔNFtþ1
2 2
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl} |fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
Environmental governance effect Sectoral endogenous effect
1 e  1 e D
þ Vtþ1 ΔTFtD þ Vte ΔTFtþ1 D
þ Vt Bt þ Vtþ1
2 2
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl} |fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
Sectoral spillover effect Domestic consumption effect
 Stage III. However, the effect of environmental governance was positive
1  e D  1
þ Vt Bt þ Vtþ1 e
BDtþ1 ΔIN þ Vte BDt þ Vtþ1
2 2
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
|fflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl{zfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflfflffl}
Domestic investment effect Export effect
According to Equation (17), the change of green value-added can be
decomposed into eight effects:
1. Domestic intermediate product effect: The impact caused by change
in the proportion of domestic intermediate products in total input.
2. Imported intermediate product effect: The impact caused by change
in the proportion of imported intermediate products in total input.
3. Environmental governance effect: The influence of change in the ratio
of production process pollution cost to total input.
4. Sectoral endogenous effect: The endogenous effect of an industry
using its intermediate inputs.
5. Sectoral spillover effect: The effect of one industry providing inter-
mediate input to other industries on all other industries.
6. Domestic consumption effect: The impact of domestic consumption
change on value-added.
7. Domestic investment effect: The impact of domestic investment
change on value-added.
8. Export effect: The impact of export change on value-added.
5.2. Analysis of structure decomposition of green value-added
Table 10 provides the results and a comparative static analysis of the
increment of green value-added in each period from 1978 to 2017 for the
eight effects.
The change in China's green value-added can be divided into the ef-
fect of the value-added rate (domestic intermediate products, imported
intermediate products, and environmental governance), sectoral struc-
ture effect (sectoral endogenous, sectoral spillover), and final product
effect (domestic consumption, domestic investment, and export). In
general, the effect of the green value-added rate on China's economy was
mostly negative during the analysis period, and the growth of green
value-added (considering environmental pollution) depended on the
impact of changes in demand for final products, especially prior to Stage
IV.
The effect of the change in the value-added rate of Stage I on the green
value-added was 8.56%. The effect of the change in the value-added
rate of Stage III was further intensified, with the effect of 10.96%,
which was due to the increase in the proportion of input of intermediate
products per unit output in the process of industrialization. However,
after entering Stage IV, the impact of the change in the value-added rate
on green value-added turned positive, related to upgrading industrial
structures. Since 2012, China's economy gradually formed an industrial
structure dominated by the service sector, in which the value-added rate
 of the service sector was higher than that of the industrial sector.
D
Specifically, the negative effect of the value-added rate effect was
predominantly due to the increasing proportion of domestic input of
intermediate products as a result of industrialization. In contrast, the

e
BDtþ1 ΔC impact of the increase in the input proportion of imported intermediate
products on the green value-added changed from negative to positive in

e
BDtþ1 ΔE (17) in all periods. Although there were short-term fluctuations in Stage II, a
slow rising trend of the impact of environmental governance on green
value-added gradually emerged.
At the beginning of the reform and opening-up, China's industriali-
zation level was low, domestic economic growth was driven by con-
sumption, and environmental pollutant discharge was minimal.
However, in Stage II and during the early part of Stage III, the contri-
bution of environmental governance on green value-added decreased
sharply, and the discord between environmental protection and eco-
nomic development appeared. The reasons are multifaceted. China was
more focused on economic growth during this period, and ecological
environmental protection was weaker. With rapid economic growth and
continuous advancement of industrialization and urbanization, the
pressure on the ecological environment increased. However, during the
latter part of Stage III and in Stage IV, environmental governance and
protection was enhanced, and its contribution rate increased. Especially
after the 18th National Congress of the Chinese Communist Party, the
ecological and environmental protection was raised. China's economic
development has transitioned into a new period where the country no
longer pursues aggregate economic growth unilaterally. Hence, envi-
ronmental protection intensity has increased.
The sectoral spillover effect is higher than the sectoral endogenous
effect, because the endogenous effect reflects the effects of the sector on
itself and the spillover effect reflects the effect on other sectors. Together,
they reflect the impact of the change of the domestic economic techno-
logical coefficient (i.e., the change of Leontief inverse matrix) on the
change of green value-added. Table 10 shows that, since the reform and
opening-up, the contribution rate of sectoral endogenous effect has little
change, while the contribution rate of sectoral spillover effect decreased
in the first two stages and then increased beginning with Stage III. This
may be related to China's accession to the WTO in 2002 that promoted
the industrial relevance for industries in the country.
The domestic consumption effect decreases, while the investment and
export effects increase. At the beginning, the domestic consumption ef-
fect is significant, while the export effect is minimal. Subsequently, the
promotion effect of consumption on green value-added decreases, but the
promotion effects of investment and export on green value-added in-
crease significantly. This verifies the static analysis results of the key
nodes and confirms the rationale of the four-stage division for reform and
opening-up.
5.3. Comparative analysis: environmental governance effect in structure
decomposition
Having examined the characteristics and evolution of Stages I–IV, we
can analyze the contribution of the effect by industry and the

Table 10
Effect contribution rate of green value-added increment in each stage.
Stage Domestic Imported Environmental Sectoral Sectoral Domestic Domestic Export
intermediate product intermediate product governance effect endogenous spillover consumption effect investment effect effect
effect effect effect effect

Stage I 6.83% 4.81% 3.08% 5.95% 6.57% 53.90% 28.74% 13.79%

Stage 2.65% 2.03% 0.76% 0.68% 1.44% 52.48% 31.70% 20.31%
II
Stage 13.68% 1.64% 1.08% 1.97% 4.43% 41.42% 40.38% 22.85%
III
Stage 9.10% 5.56% 1.64% 2.85% 11.10% 14.58% 26.20% 28.81%
IV

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J. Fan et al. Chinese Journal of Population, Resources and Environment 18 (2020) 69–78

environmental governance effect of industries on economic growth Table 11

(Table 11). Contribution rate of environmental governance effect by sector.
Compared to the agriculture and service industries, the Industries Stage I Stage II Stage III Stage IV
manufacturing industry's environmental governance effect is low and
Agriculture, forestry, animal 4.22% 0.15% 0.89% 1.20%
shows great differences with various industries. On the one hand, husbandry, and fishery
pollution generated in the production process of the raw material in- Coal mining and processing 8.82% 1.90% 0.36% 0.12%
dustry (coal mining and processing industry, crude petroleum and nat- Crude petroleum and natural gas 3.97% 0.56% 0.87% 0.08%
ural gas mining industry, and metal mining industry), the processing Metal mining 2.85% 0.41% 0.07% 0.11%
Other non-metallic mineral mining 1.57% 0.95% 0.47% 0.52%
manufacturing industry (petroleum refining, coking, and nuclear fuel Food production and tobacco 8.18% 1.26% 0.33% 4.21%
processing industry, non-metallic mineral products industry), and the processing
construction industry has not been treated effectively or timely. Textiles 8.17% 1.93% 0.24% 1.01%
Compared to other industries, the environmental governance effects of Sewing and leather products 1.04% 0.49% 0.26% 0.01%
Wood processing and furniture 4.39% 1.09% 0.23% 1.51%
these industries have been relatively low, and negative influence effects
manufacturing
appeared after Stage IV. Pollution treatment of these industries must be Papermaking and stationery 2.07% 1.36% 0.56% 1.18%
strengthened. Although environmental protection has increased since the manufacturing
18th National Congress of the Chinese Communist Party, and govern- Petroleum refining, coking, and 4.89% 2.36% 3.97% 1.51%
ments at all levels have taken a series of measures, environmental nuclear fuel
Chemical products 4.74% 0.03% 0.02% 1.62%
pollution control is a long-term task. Non-metallic mineral products 2.01% 2.36% 6.59% 3.86%
On the other hand, production technology upgradation, intelligent Metal smelting and processing 7.27% 4.69% 5.30% 5.63%
production, and the promotion of environmental protection projects have Metal products 4.44% 1.18% 0.01% 0.11%
impacted the equipment manufacturing industry (metal smelting and General and special equipment 4.26% 1.16% 0.34% 1.13%
manufacturing
processing industry; instruments, meters, and other measuring equip-
Transport equipment 3.56% 0.61% 0.09% 0.13%
ment manufacturing industry; electrical equipment and general and Electrical equipment 6.32% 0.69% 0.15% 1.11%
special equipment manufacturing industry), the chemical industry, the Electronic equipment 5.45% 0.48% 0.14% 0.01%
textiles industry, and other industries, and the contribution rate of Instruments, meters, and other 1.18% 16.32% 0.13% 1.01%
environmental governance effect is significant. measuring equipment
Arts and crafts products and other 1.89% 3.92% 1.85% 0.01%
manufacturing products
6. Conclusion Electricity, gas, and heat production 9.34% 6.65% 3.03% 8.38%
and supply
During the 40 years of rapid economic growth since China's reform Construction 6.68% 0.37% 0.04% 0.06%
Transport and post 1.48% 2.25% 0.41% 3.59%
and opening-up, the pollution generation coefficient has been increasing,
Other services 5.01% 0.20% 0.09% 1.15%
and the green value-added index has been decreasing. During the Total 3.08% 0.76% 1.08% 1.64%
1978–1992 period, when the reform was initiated and the goal was
explored, the role of consumption dominated in China, while that of
investment and export was minimal. Due to low industrialization, accounting system.
pollution in this period resulted from domestic consumption. In general, Second, China should transform the traditional economic develop-
environmental pollution in China increased in Stage I, and the pollution ment pattern of extensive and high pollution as well as the investment
problem was prominent. In Stages II and III, consumption diminished, and export structure. The country should focus on developing low-
and investment and exports increased. During these stages, investment pollution industries, promote exporting from industries producing high
increased, opening to the outside world expanded, and China's GDP value-added products, and increase green GDP per capita.
increased rapidly. Consequently, the severity of environmental pollution Third, it ought to closely monitor industries with serious pollution
in these two stages also increased and expanded, with pollution reaching problems. Specifically, the country should focus its attention on the raw
its peak in Stage III. In Stage IV, consumption no longer dominated, in- material industry (coal mining and processing industry) and the pro-
vestment was stable, and export was further enhanced. During this time, cessing and manufacturing industry (petroleum refining, coking, and
the Chinese government implemented measures to control environ- nuclear fuel processing industry). These industries must upgrade with
mental pollution and achieved significant results; however, pollution improved technologies, reduce the generation of pollution, and
continued to increase slightly. strengthen the treatment of pollution. Additionally, the proportion of
The structural decomposition showed that investment and exports these industries in the national economy should be appropriately
were critical for economic growth during the 40 years of reform and reduced, thereby decreasing sources of pollution and improving envi-
opening-up but were accompanied by serious pollution problems, espe- ronmental governance efficiency.
cially in Stages II and III. While investment and export became increas- It should be noted that this study has only examined three types of
ingly prominent, pollution worsened, and serious environmental damage pollution during China's economic development from the overall level. A
occurred in the pursuit of economic growth. Pollution caused by the raw point of future study would be to do detailed research on a certain type of
material industry (coal mining and processing industry) and the process- specific pollutant. Additionally, further study can analyze pollution of
ing and manufacturing industry (petroleum refining, coking, and nuclear various regions in China, for example, pollution in different provinces,
fuel processing industry) was not treated in time. Especially after Stage II, which would be useful to demonstrate China's pollution
these industries were the main pollution generators, and their develop- comprehensively.
ment during this period does not account for the pollution they caused.
This study provides insight on how China should improve environ- Disclosure statement
mental governance efficiency and promote ecological civilization
development. First, China should make green development a core No potential conflict of interest was reported by the authors.
concept of economic development ideology. The country should abandon
the “GDP quantity theory,” make green development in ideology Funding
important, implement green development into practice, make environ-
mental pollution governance a priority, develop a “green GDP,” and The study is supported by the Key Project of National Social Science
incorporate environmental pollution costs into the national economic Foundation of China [Grant number: 14AZD085], “Research on the

77
J. Fan et al.
Evolution Trend and Countermeasures of China's Economic Growth
Quality under the New Normal Condition”; and the Project of National
Natural Science Foundation of China [Grant number: 71373106],
“Research on the Transformation Dynamics of Industrial Added Value
Rate and Policy Simulation: A Case Study of Manufacturing Industry in
Yangtze River Delta.”
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