A Bayesian Analysis of the Determinants of China’s Overseas Contracted Projects in Countries Along the Belt and Road Initiative

Abstract

The Belt and Road Initiative (BRI), also known as the New Silk Road, was adopted by the Chinese government in 2013 to enhance regional connectivity and cooperation on a transcontinental scale connecting China and East Asia to Europe and Africa. This paper investigates the main determinants of China’s Overseas Contracted Projects (OCPs) in 45 Countries along the two principal axes of BRI—the Silk Road Economic Belt (the Belt) and the 21st Century Maritime Silk Road (the Road) by Bayesian linear regression models. We further divide the whole sample into the higher-income and lower-income subgroups, and the before-BRI and after-BRI subgroups, to compare the different determinants of China’s OCPs in countries of different income levels and during different periods. The Findings indicate that: (1) In general, China’s OCPs have resource-driven and labour-driven motivations while the backward infrastructure and the political instability of host countries are the hindrance of their development; (2) The abundant resources of higher-income countries are the important element to attract China’s OCPs, while the main determinants of China’s OCPs in lower-income countries are their development potential and labour resources; (3) The positive correlations of China’s OCPs with local economic growth rate and infrastructure development turn to be significant after the BRI.