Abstract
This paper investigates the linkages between real openness and service trade under the belt and road initiative. Three dimensions including competitiveness, growth rate of services export and proportion of emerging services are used to measure service trade. Covering the period of 1995-2016 and using vector-error correction (VEC) model and impulse response functions (GRIFS), we find that a general long-run equilibrium relationship among the service trade, the openness, the human capital and the import and export of the goods, as well as a short-run relationship. The results of this study indicate that real openness plays an important role in implementing the belt and road initiative. The competitiveness and growth rate of service trade in China are increasing while the emerging services has no improvement under the belt and road initiative.
Highlights
The belt and road initiative has been in effect for five years since its first release in October 2013
This paper investigates the linkages between real openness and service trade under the belt and road initiative
Covering the period of 1995-2016 and using vector-error correction (VEC) model and impulse response functions (GRIFS), we find that a general long-run equilibrium relationship among the service trade, the openness, the human capital and the import and export of the goods, as well as a short-run relationship
Summary
The belt and road initiative has been in effect for five years since its first release in October 2013. The “anti-globalization” and trade protectionism are re-emerging. In this case, the belt and road initiative is a recent strategic shift in China’s foreign policies, aiming to “going-out”. The focus on service trade is required to ensure that belt and road initiative promotes sustainable development. The implementation of the belt and road programs for services includes increasing direct investments in projects, as well as investments in science and technology cooperation. In 2016, the import and export of service trade in China along the “Belt and Road” countries and regions reached 122.2 billion dollars, accounting for 15.2 percent of the total trade.
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