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China’s Belt and Road initiative: can Europe expect trade gains? Bruegel Working Paper ISSUE 5/2016

Garcia Herroro, Alicia and Xu, Jianwei (2016) China’s Belt and Road initiative: can Europe expect trade gains? Bruegel Working Paper ISSUE 5/2016. [Working Paper]

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    Abstract

    The Belt and Road initiative, recently embarked on by China, aims to improve cross-border infrastructure in order to reduce transportation costs across a massive geographical area between China and Europe. We estimate how much trade might be created among Belt and Road countries as a consequence of the reduction in transportation costs (both railway and maritime) and find that European Union countries, especially landlocked countries, should benefit considerably. This is also true for eastern Europe and Central Asia and, to a lesser extent, south-east Asia. In contrast, if China were to seek to establish a free trade area within the Belt and Road region, EU member states would benefit less, while Asia would benefit more. Xi Jinping’s current vision for the Belt and Road, centred on improving transport infrastructure, is very good news for Europe as far as trade creation is concerned.

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    Item Type: Working Paper
    Uncontrolled Keywords: China, Belt & Road initiative, infrastructure, international economic system
    Subjects for non-EU documents: Countries > China
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Bruegel (Brussels) > Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 27 Sep 2016 10:43
    Number of Pages: 20
    Last Modified: 27 Sep 2016 10:43
    URI: http://aei.pitt.edu/id/eprint/80016

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