#94-DF-22 "Why SOx Emissions are high in China?"
          (Kanji Yoshioka, Hitoshi Hayami, Wong Yu Ching and 
           Takayuki kiji, July 1995.)

A WHOLE SENTENCE

ABSTRACT

    This paper examined the factors that attributed to the high 
emissions of SOx in China with respect to the size of its economy. 
Although SOx emissions in China, is 70 times larger than that in Japan,
the above difference is reduced to about 17 times when the evaluation 
problem relating to the exchange rate is taken into consideration. Our
factor analysis based on the open input-output model estimated the 
reduction in SOx emissions in China by substituting in the various 
Japanese coefficients in the simulation. Firstly, for the effects of 
final demand pattern, our results showed that contrary to the 
hypothesis that the share of capital formation with high energy 
intensity is low in matured economy, SOx emissions increase when China
is assumed to have the same goods and services composition as Japan. 
Emissions increase are recorded in industries such as electricity, 
iron & steel and transport equipment. Secondly, although China, has a 
lower dependency on imports than Japan, the import coefficients for 
sectors with high energy consumption and high SOx emissions such as 
electric power, cement, iron & steel, machinery and transport 
equipment are larger in China. We also found no evidence to support 
the hypothesis that SOx emissions are higher in China as Japan exports
more manufacturing products. Thirdly, with regards to the effects of 
the production sectors, our analysis revealed that the reduction in 
SOx emissions are large when the Japanese input per unit from the 
energy sectors are applied and when sulphur content in energy is 
reduced in China. However, as China is abundant in coal, it is 
unlikely that China will switch its energy inputs to petroleum, Hence 
increasing energy efficiency and increasing the removal of SOx in 
China are the major policy alternatives available.