Belt and Road: The China Dream?
Jackson, K. and Shepotylo, O. 2021. Belt and Road: The China Dream? China Economic Review. 67 101604. https://doi.org/10.1016/j.chieco.2021.101604
| Title | Belt and Road: The China Dream? |
|---|---|
| Type | Journal article |
| Authors | Jackson, K. and Shepotylo, O. |
| Abstract | This paper explores the impact of the Belt and Road Initiative (BRI), in terms of changes in trade costs on trade and consumer welfare in China, the EU, and the rest of the World. We employ a general equilibrium structural gravity approach and conduct a counterfactual analysis. Our key findings are as follows: (i) China and the EU are expected to make substantial gains from the BRI due to reductions in transport costs (ii) signing and implementing a deep FTA between China and the EU is equivalent to transport cost reductions of 15-20 percent (iii) the joint policy of the BRI and FTA is super-additive, magnifying the gains from the separate policies (iv) where transport cost reductions are 20 percent or more, the potential negative effect of the China-US trade war on China is more than compensated for by the BRI initiative. Our results provide evidence that the BRI has the potential to deliver significant welfare gains, particularly if combined with other trade integration schemes, and to counterbalance aggressive trade policies. |
| Keywords | Belt and Road Initiative |
| China | |
| EU | |
| Gravity model | |
| trade | |
| Article number | 101604 |
| Journal | China Economic Review |
| Journal citation | 67 |
| ISSN | 1043-951X |
| Year | 2021 |
| Publisher | Elsevier |
| Accepted author manuscript | License CC BY-NC-ND 4.0 File Access Level Open (open metadata and files) |
| Digital Object Identifier (DOI) | https://doi.org/10.1016/j.chieco.2021.101604 |
| Publication dates | |
| Published online | 22 Feb 2021 |
| Published in print | Jun 2021 |