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Forgotten effects in trade relations: a view from the Belt and Road Initiative (BRI)

Forgotten effects in trade relations: a view from the Belt and Road Initiative (BRI) The purpose of this paper is to evaluate Chinese indirect trade relations in the global trade network to observe if the objectives identified by Cai (2017) in the Belt and Road Initiative (BRI) are being fulfilled, especially with Latin America and the Caribbean (LAC) countries.Design/methodology/approachUsing data from the UNCTAD (2016) for the period 2011–2015, a normalized exports network is built. It is analyzed with the Forgotten Effects Theory and the PageRank algorithm. A Monte Carlo experiment with 10,000 replicates is performed to account for its volatility.FindingsThe paper identifies one instance in which China's peripheral countries are importing raw materials and commodities -–oil products – to produce low technological value-added products, which, in turn, are exported to China. LAC countries do not have significant indirect trade relations with China when the former is the origin country, while the latter is the destination in a trade relationship. The trade network has a clear core-periphery structure, with China belonging to its core, although being only the fourth most central node in the network.Originality/valueThis paper contributes with both a new methodology for the analysis of indirect trade relations and the results found for China under the BRI and its trade relationship with LAC economies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian Education and Development Studies Emerald Publishing

Forgotten effects in trade relations: a view from the Belt and Road Initiative (BRI)

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2046-3162
DOI
10.1108/aeds-12-2019-0182
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to evaluate Chinese indirect trade relations in the global trade network to observe if the objectives identified by Cai (2017) in the Belt and Road Initiative (BRI) are being fulfilled, especially with Latin America and the Caribbean (LAC) countries.Design/methodology/approachUsing data from the UNCTAD (2016) for the period 2011–2015, a normalized exports network is built. It is analyzed with the Forgotten Effects Theory and the PageRank algorithm. A Monte Carlo experiment with 10,000 replicates is performed to account for its volatility.FindingsThe paper identifies one instance in which China's peripheral countries are importing raw materials and commodities -–oil products – to produce low technological value-added products, which, in turn, are exported to China. LAC countries do not have significant indirect trade relations with China when the former is the origin country, while the latter is the destination in a trade relationship. The trade network has a clear core-periphery structure, with China belonging to its core, although being only the fourth most central node in the network.Originality/valueThis paper contributes with both a new methodology for the analysis of indirect trade relations and the results found for China under the BRI and its trade relationship with LAC economies.

Journal

Asian Education and Development StudiesEmerald Publishing

Published: Jun 18, 2021

Keywords: PageRank; Belt and road initiative (BRI); Forgotten effects; Indirect trade relations; Trade centrality; Monte Carlo experiment; Complex networks

References