The Impact of Trade Cooperation with China, Financial Development, FDI Flows, and Economic Growth on Environmental Degradation in ASEAN-5 Economies

Through the widespread implementation of green development, the Chinese government hopes to achieve shared prosperity while ensuring sustainable development. For all countries participating in the Belt and Road Initiative, sustainable development remains a priority. The pooled mean group (PMG) technique was employed in the present study to investigate the factors impacting environmental cleaning, economic growth, and trade cooperation between China and ASEAN-5 economies between 1992 and 2020. The empirical evidence suggests that trade cooperation with China is advantageous for environmental cleaning and economic sustainability in the explored economies. According to the results of a Sasabuchi-Lind-Mehlum (SLM) test, the environmental Kuznets curve (EKC) hypothesis applies to all ASEAN-5 economies except the Philippines. The causality test findings indicated that trade cooperation with China played a decisive role in influencing the environmental and economic conditions of ASEAN-5. The empirical results have led the study’s researchers to propose policy suggestions for ASEAN-5 economies. The economies are recommended to adopt a cooperation and self-development mode that balances economic growth and environmental cleaning while pursuing the ultimate mission of the “Green Belt and Road Initiative”.