China and the international economy: a gravity model of the Belt and Road Innitiative

Abstract

The Belt and Road Initiative aims to increase China ́s integration with the world economy through infrastructure projects and investment. We want to assess whether the Belt and Road Initiative (BRI) has contributed to increase Chinese trade with Sub-Saharan Africa. While the literature has covered the trade effects of the BRI, most of the studies try to measure the gains of trade derived from decreased transportation costs. While this remains as one of the most important features of the BRI, we wanted to measure how countries receiving BRI related investments trade with China. To achieve this goal, we built a Gravity model of trade for Chinese exports to 16 Sub-Saharan countries. If BRI investments are effective, China should trade more with these countries.