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Exposure of belt and road economies to china trade shocks

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  • Bastos,Paulo S. R.

Abstract

The Belt and Road Initiative seeks to deepen China's international integration by improving infrastructure and strengthening trade and investment linkages with countries along the old Silk Road, thereby linking it to Europe. This paper uses detailed bilateral trade data for 1995-2015 to assess the degree of exposure of Belt and Road economies to China trade shocks. The econometric results reveal that China's trade growth significantly affected the exports of Belt and Road economies. Between 1995 and 2015, the magnitude of China's demand shocks was larger than that of its competition shocks. However, competition shocks became more important in recent years, and were highly heterogeneous across countries and industries. Building on these findings, the paper documents the current degree of exposure of Belt and Road economies to China trade shocks, and discusses policy options to deal with trade-induced adjustment costs.

Suggested Citation

  • Bastos,Paulo S. R., 2018. "Exposure of belt and road economies to china trade shocks," Policy Research Working Paper Series 8503, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8503
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    Cited by:

    1. Meng Gao & Chenxin Jin & Wei Jin & Bin Sheng & Linpu Xu, 2024. "The trade and welfare effects of the belt and road initiative," Review of International Economics, Wiley Blackwell, vol. 32(2), pages 446-479, May.
    2. Weiming Li & Zhaoyang Cai & Shixiong Cao, 2021. "What has caused regional income inequality in China? Effects of 10 socioeconomic factors on per capita income," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13403-13417, September.
    3. Liu, Zhigao & Schindler, Seth & Liu, Weidong, 2020. "Demystifying Chinese overseas investment in infrastructure: Port development, the Belt and Road Initiative and regional development," Journal of Transport Geography, Elsevier, vol. 87(C).
    4. Wang, Qiuyi & Wu, Jing & Wu, Shuping, 2025. "Export slowdown and increasing land supply: Local government’s responses to export shocks in China," Journal of Urban Economics, Elsevier, vol. 149(C).
    5. Zhi Luo & Guanghua Wan & Chen Wang & Xun Zhang, 2022. "The distributive impacts of the Belt and Road Initiative," Journal of Economic Surveys, Wiley Blackwell, vol. 36(3), pages 586-604, July.
    6. Zhao, Yu & Zhang, Ning, 2025. "Energy Trade Access and Market Monopoly: Evidence from China’s Power Sector," World Development, Elsevier, vol. 185(C).
    7. Nugent, Jeffrey B. & Lu, Jiaxuan, 2021. "China's outward foreign direct investment in the Belt and Road Initiative: What are the motives for Chinese firms to invest?," China Economic Review, Elsevier, vol. 68(C).
    8. Yue Lu & Mengyuan Wang & Junjie Hong & Songbo Wu, 2024. "How does the belt and road initiative promote China's import?," Review of International Economics, Wiley Blackwell, vol. 32(2), pages 394-445, May.
    9. Shuhei NISHITATENO & Yasuyuki TODO, 2025. "Economic and Political Impacts of the Belt and Road Initiative on Western Nations in Infrastructure Investment Competitions," Discussion papers 25034, Research Institute of Economy, Trade and Industry (RIETI).
    10. Jianhong Qi & Kam Ki Tang & Da Yin & Yong Zhao, 2020. "Remaking China’s Global Image with the Belt and Road Initiative: Is the Jury Out?," Discussion Papers Series 635, School of Economics, University of Queensland, Australia.
    11. DeStefano, Timothy & Timmis, Jonathan, 2024. "Robots and export quality," Journal of Development Economics, Elsevier, vol. 168(C).
    12. Jiemiao Dong & Zhuangxiong Yu & Xunpeng Shi & Yang Yang, 2024. "Industrial Policy, Product Switching, and Export Performance," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 32(1), pages 167-196, January.
    13. Sha Fan, 2023. "Does the Belt and Road Initiative Promote Bilateral Trade? An Empirical Analysis of China and the Belt and Road Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 15(2), pages 190-214, May.
    14. He, Qing & Liu, Junyi & Yu, Jishuang, 2023. "Dancing with dragon: The RMB and developing economies’ currencies," Research in International Business and Finance, Elsevier, vol. 64(C).
    15. Jing Fang & Jinghua Ou & Shujie Yao, 2022. "On COVID‐19 pandemic and China’s foreign trade," The World Economy, Wiley Blackwell, vol. 45(11), pages 3507-3533, November.
    16. Fredrik Sjöholm, 2023. "The Belt and Road Initiative: Economic Causes and Effects," Asian Economic Papers, MIT Press, vol. 22(1), pages 62-81, Winter/Sp.
    17. Jian Chen & Xiao-qin Dong & Wei Li & Di Zhao, 2025. "Third-country investment effects of the belt and road initiative: evidence from China’s overseas direct investment," Empirical Economics, Springer, vol. 69(2), pages 951-978, August.
    18. Zhang, Yun & Liu, Yun & Zhang, Yifei & Chen, Xin, 2022. "Globalization blueprint and households’ fintech debt: Evidence from China’s One Belt One Road initiative," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 38-55.
    19. Tian Zhao, 2023. "Crowding-Out or Spillover: Reassessment on the Impact of the Belt and Road Initiative on Innovation Efficiency," SAGE Open, , vol. 13(1), pages 21582440231, March.
    20. Rui Xue & TianChen Chang & HuiZheng Liu & Claude Baron, 2025. "How does the Belt and Road Initiative reshape the regional trade network? - Evidence from Equipment Manufacturing Industry," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 15(5), pages 1-4.
    21. Koffi Dumor & Li Yao & Jean-Paul Ainam & Edem Koffi Amouzou & Williams Ayivi, 2021. "Quantitative Dynamics Effects of Belt and Road Economies Trade Using Structural Gravity and Neural Networks," SAGE Open, , vol. 11(3), pages 21582440211, July.

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    JEL classification:

    • F1 - International Economics - - Trade

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