RESEARCH ARTICLE Environmental cost of natural resources utilization and economic growth: Can China shift some burden through globalization for sustainable development? Muhammad Umar 1 | Xiangfeng Ji 1 | Dervis Kirikkaleli 2 | Muhammad Shahbaz 3,4 | Xuemei Zhou 5 1 Department of Management Science and Engineering, School of Business, Qingdao University, Qingdao, Shandong Province, China 2 Department of Banking and Finance, European University of Lefke, Faculty of Economic and Administrative Science, Mersin, Turkey 3 School of Management and Economics, Beijing Institute of Technology, Beijing, China 4 Department of Land Economy, University of Cambridge, Cambridge, UK 5 Key Laboratory of Road and Traffic Engineering of the State Ministry of Education, Shanghai Key Laboratory of Rail Infrastructure Durability and System Safety, College of Transportation Engineering, Tongji University, Shanghai, China Correspondence Xiangfeng Ji, Department of Management Science and Engineering, School of Business, Qingdao University, Qingdao, Shandong Province, 266000, China. Email: jixiangfeng@qdu.edu.cn Funding information National Natural Science Foundation of China, Grant/Award Number: 71801138 Abstract This study aims to investigate the relationship between CO 2 emissions in China and its prospective determinants, namely economic growth, globalization, financial develop- ment, and natural resources during the period from 1980 to 2017. We present more detailed analyses across multiple econometric approaches within a multivariate system, e.g., the Bayer-Hanck combined cointegration approach, the ARDL bounds test approach, ARDL estimates in short run and long run, robustness check by cointegration regressions (i.e., FMOLS, DOLS, CCR), and Granger causality approach in the frequency domain. Our results show that economic growth and natural resources have a positive impact on CO 2 emissions in China, although globalization contributes to improving its environmental quality. Meanwhile, there is no statistical evidence that CO 2 emissions in China could be affected by financial development. The causality analysis reveals that globalization, economic growth and natural resources all lead to CO 2 emissions in the long run, while financial development only causes the short-run CO 2 emissions, which further demonstrate our findings. Such findings are meaningful for policymakers to achieve the sustainable development in China. KEYWORDS China, CO 2 emissions, economic growth, financial development, globalization, natural resources, sustainable development 1 | INTRODUCTION Sustainable development has become the fundamental policy due to climate change, the goal of which is to decrease greenhouse gas emis- sions. China, as the world's second largest economy, is facing several environmental challenges, for example, China's CO 2 emissions in 2018 rise by 2.2% and account for 27.8% of total CO 2 emissions in the world, and its average growth rate is 2.5% per year from 2007 to 2017 (BP, 2019). Meanwhile, China has committed itself to a 60–65% reduction by 2030 compared to its CO 2 emissions per unit gross domestic product in 2005 (Mi et al., 2017). That is, China must increase its economic growth with low environmental quality risks. Globalization is an international phenomenon that socially and politically affects human lives all over the world (Bekun, Yalçiner, Etokakpan, & Alola, 2020), and it has a more positive impact con- cerning adverse effects, particularly about the poverty reduction in emerging nations and income inequality. Nowadays, China's foreign direct investment flows rank No. 3, and imports rank No. 2 in the world (Trindade d'  Avila Magalh~ aes, 2018). In particular, due to new business growth opportunities, China is rapidly becoming the latest Received: 15 April 2020 Revised: 2 July 2020 Accepted: 17 July 2020 DOI: 10.1002/sd.2116 Sustainable Development. 2020;1–11. wileyonlinelibrary.com/journal/sd © 2020 ERP Environment and John Wiley & Sons Ltd 1