In September 2020, China announced its intentions to reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060 (known as the ‘30–60’ greenhouse gas reduction goals). With a focus on China’s pilot low-carbon city initiative, this paper adopts the difference-in-differences approach to examine the effect of low-carbon policies on the green development of China’s manufacturing industry. The findings show that the implementation of low-carbon policies could significantly reduce pollutants and improve productivity. The results hold after a battery of robustness tests. Further analysis shows that the effect of low-carbon policies on the emissions reduction of larger taxpayers is more pronounced, suggesting that including low-carbon policies as a part of the government’s performance assessment weakens the opportunistic behaviour of local governments in pursuing economic growth at the expense of the environment. It also finds that manufacturing firms typically do not respond to the policy in a negative way (by limiting or reducing production) but instead achieve positive emissions reduction by increasing resource recycling. The findings of this paper provide empirical evidence and policy implications to support the government expanding its low-carbon policies to a national level to mitigate climate change and achieve green manufacturing development.

How to effectively break down market segmentation and build a sustainable and unified domestic market has become critical to achieving high-quality development in the Chinese economy nowadays. This study examines the effects and mechanisms of improved judicial independence on the development of larger and more sustainable domestic supply chains, using a sample of Chinese enterprises from 2011 to 2016 and a quasi-natural experiment of local judicial reforms. We find that, after the establishment of local circuit courts, the distribution distance of a firm’s supply chain increases significantly. The mechanism analysis suggests that the increase in distribution distance in the domestic supply chain is due to the breakdown of market segmentation resulting from the reduction in local judicial protectionism and the improvement in the quality of local justice after the establishment of circuit courts. Further tests show that the impact of improved judicial independence on the domestic supply chain is most pronounced among small and manufacturing non-state-owned enterprises and those from less competitive industries. Overall, the findings of this paper provide important insights into developing large and sustainable supply chains via breaking down market segmentation, thereby promoting long-term economic growth.

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