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October 9, 2025SAGE Open11 citationsOpen Access

Industrial Transformation and Environmental Sustainability: The Case of China’s “Made in China 2025” Policy

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TZTinghui ZhangZYZi Hui YinCCChang Hwan Choi

Key Points

  • MIC policy achieves a significant 55.7% reduction in SCPM in pilot cities compared to non-pilot counterparts.
  • The study utilizes a time-varying difference-in-differences approach analyzing panel data from 284 cities spanning 2003 to 2021.
  • Negative spillover effects are observed, with neighboring non-pilot cities facing a 184% increase in SCPM attributed to resource siphoning.
  • Resource-based cities experience a 52.2% greater reduction in SCPM, indicating heterogeneity in policy impact.

Abstract

The synergistic management of carbon emissions and PM2.5 pollution (SCPM) represents a critical challenge for China’s 6G. This study examines the impact of China’s “Made in China 2025” (MIC) industrial policy on SCPM using a time-varying difference-in-differences approach with panel data from 284 Chinese cities (2003–2021). We construct SCPM as an interaction term between carbon emissions and PM2.5 concentrations to capture their synergistic environmental burden, building on established coupling coordination methodologies in environmental research. Results demonstrate that MIC policy significantly reduces local SCPM by 55.7% in pilot cities compared to non-pilot cities. Mechanism analysis reveals that industrial structure rationalization and human capital development serve as primary transmission channels. Spatial analysis using the Durbin model shows negative spillover effects, with neighboring non-pilot cities experiencing 184% increases in SCPM due to resource siphoning. Heterogeneity analysis indicates stronger policy effects in resource-based cities (52.2% greater reduction) and old industrial bases. Policy combination analysis reveals synergistic effects when MIC policy operates alongside smart city, big data, new energy, and carbon trading policies. These findings provide empirical evidence for the environmental co-benefits of industrial policy and inform coordinated regional environmental governance strategies.

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Cite This Study

Zhang et al. (2025) studied this question.

synapsesocial.com/papers/68e77f09d1c187e1c108fd02https://doi.org/10.1177/21582440251382556
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