Abstract: How to achieve a win-win result in both foreign trade transformational upgrading and environmental governance is a key issue that needs to be solved urgently in the Chinese economy under the new development stage. Based on matched Chinese customs data and Chinese city-level data, this paper empirically examines the effects and mechanisms of export trade transformation on pollution. The results show there is a significant inverted U-shaped relationship between export trade transformation and pollution, which is still robust after considering endogenous problems and changing the measurement of variables. The transformation of export trade affects pollution through the positive composition effect and negative technique effect. When the transformation of export trade does not reach the critical value, the composition effect is greater than the technique effect; when the transformation of export trade exceeds the critical value, the composition effect is less than the technique effect. The inverted U-shaped relationship between export trade transformation and pollution is more evident in the central and western regions and cities with relatively low levels of financial development. These findings provide a new perspective to better understand the relationship between international trade and the environment.

Key words: export trade transformation, environmental pollution, ordinary trade