Relationship between forest resources and economic growth: Empirical evidence from China

Natural resources, especially forests, are critical to China's sustainable development. In recent years, effective utilization of forest resources has become a significant concern in China. In this study, on the basis of the environmental Kuznets curve (EKC) hypothesis, the relationship between forest resources and economic growth is examined using panel data from 30 provinces in China for the period 2002–2015 and the generalized method of moments (GMM) approach to control for potential endogeneity. The empirical results indicate that with continuous economic growth, the timber output and area of afforestation would at first increase and then decrease after reaching the corresponding turning points. Given the considerable regional gap in economic and social development, three regions of China were investigated to perform a more in-depth analysis. Evidence observed for the country and the three regions suggests an EKC for forest resources. These findings indicate positive effects of China's pursuit of a more balanced growth path where forest resources would be less consumed and more actively protected.