Exposure of Belt and Road Economies to China Trade Shocks
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 de...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/444691530324394149/Exposure-of-belt-and-road-economies-to-china-trade-shocks http://hdl.handle.net/10986/29976 |
| Summary: | 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. |
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