Does the All-China Federation of Industry and Commerce Align Private Firms with the Goals of the People's Republic of China's Belt and Road Initiative?

Abstract

This paper demonstrates that the largest business association of private firms in the People's Republic of China (PRC), the All-China Federation of Industry and Commerce (ACFIC), has induced its members to help achieve the goals of the PRC's extremely ambitious but risky Belt and Road Initiative (BRI) since its inauguration in 2013. Through its newspaper, the ACFIC has drawn the attention of its member firms to countries participating in the BRI, which has led to increased trade between provinces in the PRC and BRI-participating countries emphasized by the ACFIC's newspaper. The results show that the PRC's exports have been encouraged substantially more than its imports, which could be a cause for concern for the sustainability of the BRI. The results were obtained through various specially designed versions of the gravity model and have shown to be robust to the use of various methods for mitigating possible estimation biases.