Firm ownership, China's export related emissions, and the responsibility issue

China's CO<inf>2</inf> emissions and those embodied in its exports have been extensively studied. One often neglected aspect is the prevalence of foreign-invested enterprises (FIEs) in China's exports, for which a substantial portion of benefits return to the investing countries. In this paper, we revisit China's export-related CO<inf>2</inf> emission responsibilities by viewing them from a "new", gross national income perspective. Using a recently developed environmental input-output framework, one which distinguishes firms by ownership and trade mode, we find that China's CO<inf>2</inf> emissions responsibility for each Yuan of national income from FIE exports, is actually higher than that attributable to Chinese owned enterprise (COE) exports. The result has a somewhat surprising implication: it suggests another source of conflict between China's and global interest in reducing CO<inf>2</inf> emissions. From a purely Chinese (as opposed to global) standpoint, a higher share of exports by COEs rather than FIEs is favorable, even though COEs emit more CO<inf>2</inf> when producing each unit of exports. This finding should sound an additional warning to those who still think that global climate change mitigation can be effectively pursued by allocating country-by-country emissions responsibility.