Water pollution in China has expanded from regions to river basins. It is of great significance to study the behaviors of regulated subjects from the perspective of river basins for protecting the water environment and improving the effectiveness of environmental regulations. This paper constructed a basin spatial regression design to discuss the governance effect and economic effect of water pollution from industry in relation to the central environmental protection goal of China, as well as the response and strategy of local government. Considering the validity of the data, the annual average chemical oxygen demand (COD) concentration of each monitoring station was adopted as the ambient water quality index, and there was direct evidence that the ambient water quality index influenced water-polluting industries. We found that, if the downstream COD concentration in the last year rose by 1 mg/L, the water-polluting industries reduced their pollution and output value by 1.9% and 0.2%, respectively. After using the upstream COD concentration as the tool variable, the result was still robust. However, the results of local government’s two strategies, which we can call regulatory constraint force and fiscal incentive force, were opposites. Specifically, the governance effect of polluting industries under regulatory constraints was more significant, while fiscal incentives encourage water-polluting industries to create more value. In addition, we estimated the impact of ambient water quality on water-polluting industries in the Yangtze River Basin and the Yellow River Basin, and revealed that the governance effect exceeded the average value of seven river basins. After further distinguishing the relative upstream cities and relative downstream cities, the results show that the response of relative upstream cities to water quality was significantly higher, and the gap between regions expanded further after 2013.

The basin economy is essential in China’s high-quality development, which brings prodigious economic and social benefits. However, high industrialization and urbanization led to a significant escalation in water pollution within basins. The achievement of synergistic control of water environment pollution at the basin scale has emerged as a primary goal for governmental departments in developing environmental policies. This study constructs a “four-in-one” basin’s water environment regulation system comprising four categories: total, quality, project, and governance. Further, the spatial spillover effects of water environment pollution control in 27 Chinese provincial-level administrative regions spanning key river basins were analyzed. This study aims to provide evidence from China on the transfer of water pollution in basins worldwide. The results indicate the following conclusions: (1) A consistent upward trend in the environmental regulations and water environment pollution indexes across all provinces in the basin. Compared to 2006, in 2018, the mean value of the basin environmental regulation index was 0.21, which is an increase of 23.5%, and the mean value of the water environmental pollution index was 0.83, which is an increase of 29.7%. (2) Whether in the basin’s upper, middle, or lower reaches, the relationship between environmental regulations and water pollution follows a “U”-shaped pattern, with thresholds of 0.318, 0.331, and 0.390, respectively. (3) Under the neighbor weight matrix and water flow distance weight matrix, the impact coefficient of the water environment pollution index on the surrounding areas is significantly positive, implying that the implementation of local environmental policies will radiate to the neighboring areas in the short term and bring positive governance effects. (4) Regarding the time-lag effect, it is observed that the lag term associated with the water environment pollution index exhibits a statistically significant positive relationship. This finding suggests that the pollution of the water environment within the basin follows a cumulative and continuous pattern. (5) It is noted that long-term environmental regulation measures do not contribute favorably to the amelioration of water pollution in the neighboring regions. This implies the presence of a characteristic neighboring avoidance effect.

With the deceleration of China’s economic growth, the crude economic model will progressively diminish in its competitive edge, thereby posing challenges for state-level economic and technological development zones (ETDZs) in terms of transitioning their development model and grappling with low levels of total factor productivity (TFP). This study aims to evaluate the TFP of prominent cities in China, examine the influence of the establishment of state-level ETDZs on urban TFP, and investigate the moderating effect of transportation infrastructure on this relationship. The results show that the aggregate TFP of Chinese urban areas declined from 1999 to 2020, a trend linked to structural economic adjustments and persistent underutilization of capital in several regions. The establishment of state-level ETDZs has been found to exert a notable positive influence on regional TFP. The presence of transportation infrastructure plays a moderating role in facilitating state-level ETDZs, thereby enhancing regional TFP. Among various modes of transportation, highways and railways are particularly prominent in this regard. These conclusions provide a theoretical basis and decision-making reference for further unleashing the policy potential of development zones in China.