Exploring the co-opetition mechanism of renewable energy trade between China and the “Belt and Road” countries: A dynamic game approach

Abstract

In an attempt to find the key factors influencing the co-opetition relationship between China and “Belt and Road” countries, we firstly analyzed the status quo of the renewable energy trade between the two parties. Then, we constructed a dynamic game model, taking China and the “Belt and Road” countries as two players of the game. Next, we estimated the influence of different strategies to be adopted by China and the “Belt and Road” countries based on the model evolution results under different scenarios. Results show that: (1) The strategies to be adopted by both sides (players) for renewable energy product trade in the dynamic game process depend on the differences between their trade costs and additional benefits; (2) Whether China and the “Belt and Road” countries can achieve a win-win situation in their trade cooperation depends on the additional benefits obtained by the two sides (players) due to the additional benefits from cooperation and external benefits of the “Belt and Road” countries through technology spillovers, trade costs and the losses brought by the game strategies of both players, i.e., when one player adopts a cooperation strategy while the other takes a competition strategy; and (3) There is an extra income distribution coefficient in the co-opetition relationship between the two parties in the renewable energy trade, which will maximize the probability of “cooperation strategy” to be adopted by both sides. Finally, we put forward policy implications based on the above findings.