This paper addresses the issue of the relationship between economic growth and environmental
quality in China. The main hypothesis to be examined in the study is the environmental Kuznets
curve hypothesis, which postulates an inverse U-shaped relationship between pollutions and income.
The empirical analysis uses prefecture level panel data of China over the period 2003–2010,
and employs fixed effects model and a sample split method. The empirical results tend to confirm
the inverse U-shaped relationship as well as the N-shaped relationship between income and
pollution.