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China's Belt and Road Initiative: Can Europe Expect Trade Gains?

Alicia Garcia-Herrero () and Jianwei Xu ()
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Alicia Garcia-Herrero: Bruegel

Authors registered in the RePEc Author Service: Alicia Garcia Herrero ()

No 2016-38, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: The Belt and Road Initiative, recently embarked on by China, aims to improve cross-border infrastructure in order to reduce transportation costs across a massive geographical area between China and Europe. We estimate how much trade might be created among Belt and Road countries as a consequence of the reduction in transportation costs (both railway and maritime) and find that European Union countries, especially landlocked countries, should benefit considerably. This is also true for Eastern Europe and Central Asia and, to a lesser extent, South-East Asia. In contrast, if China were to seek to establish a free trade area within the Belt and Road region, EU member states would benefit less, while Asia would benefit more. Xi Jinping’s current vision for the Belt and Road, centred on improving transport infrastructure, is very good news for Europe as far as trade creation is concerned.

Keywords: China; Belt & Road initiative; infrastructure; international economic system (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-int, nep-sea, nep-tra and nep-tre
Date: 2016-12, Revised 2016-12
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http://iems.ust.hk/assets/publications/working-papers-2016/iemswp2016-38.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: China's Belt and Road Initiative: Can Europe Expect Trade Gains? (2017) Downloads
Working Paper: China’s Belt and Road initiative: can Europe expect trade gains? (2016) Downloads
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