Economic evaluation of the Belt and Road Initiative from an unimpeded trade perspective

ABSTRACT

China’s the Belt and Road Initiative (BRI) will likely change the existing pattern of the international trade network, which may affect both global supply chain management and logistics development. To explore the impacts of OBOR on the world economy and international trade, this paper provides a quantitative evaluation with a global multi-region model. The results reveal that the trade barriers between China and areas along BRI are prominent for some sectors, which implies significant potential for cooperation. The BRI is conducive to the export of Chinese energy-intensive industries and will relieve the overcapacity concern. Particularly, the north line strategy has the greatest potential for textile exports, the middle line is most beneficial to the ferrous metals industry, and the south line may revitalise both chemical and ferrous metals industries. This paper reveals the economic growth and social welfare improvements for the participating regions, which will enhance mutual trust and promote the development of the BRI.

KEYWORDS:

• The Belt and Road Initiative
• unimpeded trade
• global trade analysis project
• energy-intensive industries
• logistics network

Acknowledgements

We appreciate the support from the National Natural Science Foundation of China (Nos. 71503001, and 71471001), Program for Projects in Philosophy and Social Science Research of the Ministry of Education of China (Grant No. 14JZD031), and Anhui Federation of Social Sciences (Grant No. 2016ZD010). The authors would also like to thank the three anonymous reviewers for their valuable suggestions and comments on the earlier drafts of this paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by National Natural Science Foundation of China [grant numbers 71471001, 71503001]; Anhui Federation of Social Sciences [grant number 2016ZD010]; Program for Projects in Philosophy and Social Science Research of the Ministry of Education of China [grant number 14JZD031].