Review of International Economics, 2024, Volume 32, Issue 2

Authors: Yue Lu, Mengyuan Wang, Junjie Hong, Songbo Wu

Abstract: We estimate the policy effect ofbelt and road initiative (BRl) on China's import. We usehighly detailed, product-country level data from China Customs Trade Statistics Database whichcovers 5364 types of products and 201 economies from 2010 to 2017 to investigate the policyeffects and the underlying mechanisms. We find that the BRl has significantly boosted China'simports firom countries along the route. The BRl have significant expansion effect on imports ofexisting products as well as positive effects on imports of new product import and product exitwhich means BRI may also contribute to the optimization of product structure and growth in valueof China's imports. Moreover, BRl have positive effects on both general trade and processingtrade.Mechanism analysis shows that policy coordination, cultural affinity, and maritimetransportation connectivity have strong explanatory power on the policy effects of BRl. We alsofind that the BRl has played a "boosting" role for import boost for new RTA partner as well asnon-RTA members along the route. We fiuther examine the impact ofBRI on global bilateral tradeand the result shows that BRI has generally promoted bilateral trade among all countries along theroute, not limited to origin-China pairs.

Key Words: belt and road initiative (BRI); bilateral trade; import; mechanism analysis