A Study on the Carbon Emission Effects of Chinas OFDI in Belt and Road Countries

The Belt and Road Initiative (BRI), proposed by China in 2013, is a major global initiative aimed at fostering economic development and connectivity. However, relevant data indicate that some BRI countries rank among the highest in global carbon emissions, raising international concerns about the environmental impacts of Chinas outward foreign direct investment (OFDI). Based on panel data from 62 BRI countries spanning the years 2003 to 2023, this paper explores in depth the impact of Chinas OFDI on carbon emissions in these countries. The results show that: (1) Chinas OFDI significantly reduces carbon emissions in BRI countries, demonstrating a pollution halo effect. Additionally, the impact of Chinas OFDI varies across countries with different levels of carbon emissions; (2) Chinas OFDI curbs carbon emissions mainly by promoting technological innovation and enhancing government effectiveness; (3) Heterogeneity analysis reveals that Chinas investments in OECD and developed countries under the BRI show a more pronounced carbon reduction effect. Moreover, the carbon mitigation impact of Chinas OFDI differs between neighboring and non-neighboring countries. Therefore, China should continue to deepen cooperation with BRI countries and develop targeted investment strategies based on the economic development level, trade openness, and geographical location of each country. Emphasis should be placed on strengthening mechanisms for the sharing of green technologies and improving governance capacity among participating countries.