Influence of CPEC–Flagship of Belt and Road Initiative on the agricultural trade of China

Abstract

ABSTRACT This study investigates the potential impact of China’s Belt and Road Initiative (BRI) on its agricultural exports. A gravity model was formulated to find the determinants of China’s agricultural exports. This model uses two measures of distance: Model 1A uses the great-circle measure of distance and Model 1B uses the existing real distance used between China and its trade partners. The determinants of both models are then used to simulate China’s pre-CPEC export potential in agricultural products. The results of Model 1B are then simulated, using the proposed real distance values to calculate China’s post-CPEC agricultural export potential. The findings for pre-CPEC exports show that a strong potential for agricultural exports exists for African, Middle Eastern, and other countries. The findings for post-CPEC trade show that there will be a tremendous increase in the export potential for African and Middle Eastern countries that can be attributed to BRI.