Does Trade Competition with the United States Influence CO2 Emissions in China?
In this session of the International Business Seminar Series, Prof. Mihai Mutascu explored the impact of U.S.-China trade competition on environmental sustainability, shed light on how economic shifts had influenced China’s CO2 emissions, and offered new perspectives on the link between global trade and climate change.
When two large economies compete for market share, particularly by lowering pollution standards, global emissions can be significantly affected. The study presented by Prof. Mihai Mutascu investigates the relationship between U.S.-China trade competition and Chinese CO2 emissions from 2004 to 2022 using wavelet methodology.
The findings reveal that in the short term, the interaction between U.S.-China trade competition and Chinese CO2 emissions was erratic between 2010-2013, when trade competition eased and varied under different conditions. During the COVID-19 pandemic (2020-2022), supply chain disruptions forced many U.S. factories to close, while China became a key manufacturing hub but relied on pollution-intensive production, creating fluctuating dynamics in U.S.-China competition.
In the long term, a coupling effect occurred from 2008-2016, with rising competition as China expanded its industrial sector to meet global demand, relying heavily on coal and fossil fuels, significantly raising CO2 emissions. After 2016, a decoupling effect emerged, especially after the 2018 trade war, reducing U.S.-China competition as both countries sought alternative markets.
Mihai Mutascu is a Professor of Public Economics at the Faculty of Economics and Business Administration, West University of Timisoara (Romania), where he teaches courses in Public Economics and Taxation. He is an affiliated researcher at the Laboratoire d'Economie d'Orleans (LEO), University of Orleans (France), and currently serves as a Visiting Professor at the International Management Institute, ZHAW School of Management and Law, Zurich University of Applied Sciences (Switzerland). Since 2020, he has also been an External Lecturer at Zeppelin University in Friedrichshafen, Germany.
He earned his PhD in Public Economics at West University of Timisoara (2004) and holds habilitations in Finance (Bucharest University of Economic Studies, 2013) and Economics (Laboratoire d'Economie d'Orleans, 2014). His research focuses on Public Economics, International Economics, Energy Economics, and Applied Economics, and he supervises PhD students at West University of Timisoara.
You can learn more about Professor Mihai Mutascu here.