The Belt and Road Initiative: Maximizing benefits, managing risks—A computable general equilibrium approach

Abstract

Using a Global Trade Analysis Project (GTAP) model, and China as the base for analytical compari-son, this paper shows that there are significant economic benefits to China and the participating coun-tries along all six Belt and Road Initiative (BRI) economic corridors. However, to maximize these benefits, the social and environmental risks need to be well managed. The analysis shows a clear sequencing in terms of priority corridors. Two corridors have minimal investments and immediate returns, two corridors have significant investments with huge returns, and two corridors have high investments with lower returns. Overall, the paper demonstrates that to ensure the sustainability of any BRI corridor development, there is a need to consider its costs and benefits from the economic, social and environmental perspectives.