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Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?

Chunjiao Yu (), Ren Zhang (), Lian An () and Zhixing Yu ()
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Chunjiao Yu: Department of International Economics & Trade, Business School, Hubei University, Wuhan 430062, China
Lian An: Coggin College of Business, University of North Florida, Jacksonville, FL 32224, USA
Zhixing Yu: Open Economy Research Centre, Hubei University, Wuhan 430062, China

Sustainability, 2020, vol. 12, issue 17, 1-1

Abstract: The Belt and Road Initiative (BRI) is designed to intensify reciprocal trade preferentiality between China and the Belt-Road countries. However, there has been little research empirically examining the policy effects on the trade links between China and the involved countries. This paper attempts to evaluate the BRI effects quantitatively by constructing a new bilateral revealed trade preference index to measure the bilateral trade preferentiality between China and its 114 trading partners. Using a difference in differences model, we show that the trade of China with the Belt-Road countries has become more preferentially linked since the implementation of the BRI. In particular, the bilateral revealed trade preference index between China and the Belt-Road countries has grown approximately 8% faster than has that with the non-Belt-Road countries. We further show that the BRI effects are heterogeneous across different regions. The bilateral trade links have been more significantly intensified in the regions of the China–Indochina Peninsula Economic Corridor, the China–Pakistan Economic Corridor, the China–Central Asia–West Asia Economic Corridor and the Bangladesh–China–India–Myanmar Economic Corridor. The findings strongly indicate that BRI has been acting as a catalyst for intensifying bilateral trade preferentiality between China and the Belt-Road countries.

Keywords: Belt and Boad Initiative; bilateral revealed trade preference index; difference-in-differences methodology (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2020
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