How Does the Belt and Road Initiative Improve China's Product Export Potential: A Global Value Chain Perspective

Abstract

This study examines the impact of the Belt and Road Initiative (BRI) on China's export potential at the product level. Using country–product-level data from the Centre d'Etudes Prospectives d'Informations Internationales-Base pour l'Analyse du Commerce International (CEPII-BACI), which includes 5,049 product types across 196 economies from 2007 to 2022, it explores the trade effects of the BRI and its mechanisms from the perspective of global value chains. The results indicate that the BRI has increased China's product export potential significantly to participating countires. The BRI has had the greatest impact on capital goods and labor- and capital-intensive industries. The effect has been most pronounced in China's exports to Southeast Asia, South Asia, and Europe. The mechanism analysis reveals that the BRI has improved the division of labor in the global value chains for participating countries along the BRI, strengthened China's position in their output supply chains, and stimulated the growth of China's exports.