An Analysis of Trade Potential of the Silk Road Economic Belt with Simultaneous Equation Model

Abstract

The concept of “Silk Road Economic Belt” is an innovative model of cross-regional economic cooperation proposed by China based on the new situation of regional economic integration and economic globalization. Using the simultaneous equations model, the trade potential of countries with important nodes of the Road Economic was studied. By analyzing the trade of the Silk Road Economic Belt of the Economic Belt of 30 provinces, cities and municipalities in China and 26 countries or regions in 2007, the results show that there is a complementary relationship between the trade in the Silk Road Economic Belt and the economy of the Silk Road. Look, the European economic belt has the greatest flexibility for international trade, followed by Asia and Africa, and the vertical trade system based on the differences in resource endowment has intensified the trend of FDI investing in China. The trade pattern of each province depends on the economic scale of the two parties. Geographical distance: The scale of the economic zone's trade potential is directly proportional to its respective economic aggregate, and the geographic distance (transportation cost) of both parties constitutes a drag factor for trade between the two places. Geographical location has become an important factor hindering the development of international trade in Asia and Africa.