Five Stylized facts on Belt and Road Countries and their Trade Patterns

Since the start of the China-led Belt and Road Initiative, several countries became involved and some of them received investment projects. Using data for the period 2012-2018, we show that pre-existing trade patterns are related to the likelihood to participate in the initiative and receive investments. We summarize our findings into five stylized facts. First, BRI countries with completed projects tend to be poorer and larger. Second, projects are more likely to occur in countries with intensified intermediate trade with China. Third, countries that received projects have more diversified export structures and their sectoral specialization overlaps to that of China. Fourth, among middle-high income countries, projects tend to favor those with high levels of intra-industry trade. Fifth, among BRI countries with projects, the complexity or sophistication of goods trade increases faster with income. These findings suggest that the allocation of BRI investments partially reflects the trade patterns, favoring destinations with specific characteristics.