How Does Trade Openness Drive New-Type Urbanization in Regions of China? The Moderating Role of Industrial Upgrading

Against the backdrop of accelerated global integration and China’s pursuit of new type urbanization pathways, the role of trade openness—moderated by industrial upgrading—represents a critical yet underexplored nexus for emerging economies. Using provincial panel data from 31 Chinese provinces spanning from 2008 to 2022, this study empirically examines the impact of trade openness on urbanization. It further examines the moderating role of industrial structure upgrading in this relationship. To address endogeneity and distributional heterogeneity, we employ economic distance as an instrumental variable and apply quantile regression methods, thereby providing a robust quantification of the dynamic effects of trade openness on urbanization. The study demonstrates that trade openness contributes to the advancement of China’s new type urbanization and that the upgrading of industrial structures positively reinforces this effect through trade openness. Further heterogeneity analysis reveals that the eastern region, which is more economically developed and more globally integrated, exhibits a stronger awareness of and responsiveness to the impact of trade openness on urbanization. This article provides a theoretical framework for the sustainable development of China’s new type urbanization, encouraging stakeholders to actively engage in the urbanization process and to promote balanced economic, social, and environmental development. This study offers actionable insights for policymakers to align trade openness with new type urbanization pathways.