Decentralization of the non-capital functions of Beijing: Industrial relocation and its environmental effects

Research output: Contribution to journalArticle


Relocating Beijing's manufacturing industry, a key measure in the strategy for decentralizing Beijing's non-capital functions, may inadvertently increase environmental pressures in the receiving cities. This study develops a quantitative method to comprehensively identify the environmental effects caused by regional industrial relocations. First, a set of relocated industries is selected by considering the relevant policy motivations and sector-specific economic and environmental performance. Second, a discrete choice model is developed to simulate the relocating process, taking economic geographic factors as well as local environmental quality and regulation into account. Third, the Monte Carlo method is used to quantify the potential effects by considering the sectoral efficiencies of resource use and pollutant emissions. Three scenarios are developed for different priorities of economic growth and environmental regulation. The results show that the decentralization strategy is likely to reduce Beijing's industrial output value by between 68 and 176 billion RMB yuan, or 3.9%–10.1% of its annual total. Meanwhile, the decrease in Beijing's industrial water and energy consumption could range from 2.7% to 7.8% and from 6.4% to 8.1%, respectively, while the decrease in industrial emissions from various pollutants could range from 6.7% to 36%. The industrial output from the receiving cities in the Beijing–Tianjin–Hebei (BTH) region could increase in the range of 0.3%–17% in the scenarios, larger than their change rate of water and energy consumption (0.1%–3.5%) and pollutant emissions (0.1%–7.3%). Environmental pressures may intensify in Tianjin, Langfang, and Shijiazhuang as they are estimated to be the targets for 65% of all relocated industries. Overall, the results imply that the decentralization strategy is a promising approach for promoting regional sustainable development. The study recommends implementing stricter environmental regulations in the receiving cities.


External organisations
  • Tsinghua University
  • Industrial and Commercial Bank of China
  • Tsinghua Holdings Co., Ltd.
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economic Geography


  • Decentralization development, Discrete choice modeling, Impact assessment, Industrial relocation
Original languageEnglish
Pages (from-to)545-556
Number of pages12
JournalJournal of Cleaner Production
Publication statusPublished - 2019 Jul 1
Publication categoryResearch