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China’s belt and road initiative: A preliminary quantitative assessment

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  • Zhai, Fan

Abstract

Using a global computable general equilibrium model, this paper investigates the macroeconomic impact of China’s Belt and Road Initiative (BRI). Accounting for the externalities of infrastructure development with respect to trade cost reduction and energy efficiency improvement, the analysis finds BRI would bring sizable benefits to the world economy in terms of welfare and trade, even under conservative assumptions about the size of total investment under the initiative. However, China and other BRI countries need to address several important challenges in order to implement this initiative with success and realize these benefits.

Suggested Citation

  • Zhai, Fan, 2018. "China’s belt and road initiative: A preliminary quantitative assessment," Journal of Asian Economics, Elsevier, vol. 55(C), pages 84-92.
    • Handle: RePEc:eee:asieco:v:55:y:2018:i:c:p:84-92
    DOI: 10.1016/j.asieco.2017.12.006
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    References listed on IDEAS

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    1. Zhai, Fan, 2008. "Armington Meets Melitz: Introducing Firm Heterogeneity in a Global CGE Model of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 575-604.
    2. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    3. Alicia Garcia Herrero & Jianwei Xu, 2017. "China's Belt and Road Initiative: Can Europe Expect Trade Gains?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(6), pages 84-99, November.
    4. Tim Summers, 2016. "China’s ‘New Silk Roads’: sub-national regions and networks of global political economy," Third World Quarterly, Taylor & Francis Journals, vol. 37(9), pages 1628-1643, September.
    5. Joseph Francois & Miriam Manchin & Annette Pelkmans-Balaoing, 2009. "Regional Integration in Asia: The Role of Infrastructure," Palgrave Macmillan Books, in: Joseph Francois & Pradumna B. Rana & Ganeshan Wignaraja (ed.), Pan-Asian Integration, chapter 7, pages 439-485, Palgrave Macmillan.
    6. World Bank, 2005. "Global Economic Prospects 2005 : Trade, Regionalism and Development," World Bank Publications - Books, The World Bank Group, number 14783.
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