Abstract
Based on the cooperation network formation theory, a Belt and Road trade cooperation network was constructed from the multi-distances perspective under the backdrop of the Belt and Road initiative. The geographic, factor endowment, cultural, and institutional distances were selected as variables from the aspects of geography, economy, culture, and politics to expand the gravity model. With this model, an empirical test was conducted using the data from China’s export trade flows to Belt and Road countries from 2007 to 2016. The results showed that a Belt and Road country had greater trade flows from China when it had smaller geographic, factor endowment, and cultural distance and greater institutional distance from China. Based on the empirical results, we improved the comprehensive index method to measure the comprehensive distance indices between China and the Belt and Road countries. According to the comprehensive distance indices, these countries could be divided into four cooperation circles, in which the prioritized countries in the different phases were identified. Subsequently, the cooperation network construction was designed in four stages to gradually build an all-round, multi-level, and all-encompassing trade cooperation network between China and the Belt and Road countries. Eventually, based on the above consideration, policy suggestions are provided for the construction of such a network.
Highlights
In the 21st century, a new era marked by peace, development, cooperation, and mutual benefit, during his visit to Central and Southeast Asia in September and October 2013, Chinese President Xi Jinping successively introduced the initiative of jointly building the Silk Road Economic Belt and the 21st Century Maritime Silk Road, hereinafter referred to as the Belt and Road [1]
When the Silk Road Economic Belt was first proposed by Xi Jinping in 2013, the Belt and Road initiative was to be conducted in five aspects: policy communication, road connectivity, unimpeded trade, currency circulation, and common people [3]
If the gross domestic product (GDP) of the trading target country or institutional distance increased by 1%, trade flows would increase by 2.1235% and 0.3241% respectively, whereas if the geographic, factor endowment, or cultural distance increased by 1%, trade flow would decrease by 1.0964%, 0.0720%, and 0.2569%, correspondingly
Summary
In the 21st century, a new era marked by peace, development, cooperation, and mutual benefit, during his visit to Central and Southeast Asia in September and October 2013, Chinese President Xi Jinping successively introduced the initiative of jointly building the Silk Road Economic Belt and the 21st Century Maritime Silk Road, hereinafter referred to as the Belt and Road [1]. Some scholars found that cultural distance has a significant and long-term negative influence on bilateral trade flows between China and the Belt and Road countries [29]. The above studies laid a solid theoretical foundation and method basis for the research of a cooperation network construction between China and the Belt and Road countries. Since the Belt and Road Initiative includes 65 countries with diversified cultural and institutional backgrounds, to study the cooperation network construction among them requires considering the cooperation benefit factors and the cooperation opportunity factors. In this study, based on the principle of facilitation, friendliness, and complementarity of cooperation network formation theory [34], the geographic, factor endowment, cultural, and institutional distances were selected as variables to expand the gravity model from a multiple distances perspective. Based on the results of the empirical research, we designed and constructed a Belt and Road Trade cooperation network from a multi-distances perspective
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