Can policy coordination facilitate unimpeded trade? An empirical study on factors influencing smooth trade along the Belt and Road

Abstract

There are 94 countries and regions along the Belt and Road (CRBR). China proposed the Belt and Road Initiative (BRI) in 2013, and it encompasses five core elements: unimpeded trade (UT), policy coordination (PC), infrastructure connectivity (IC), financial integration (FI) and people-to-people bond (PPB). The BRI has facilitated international relations and multilateral trade, in addition to building a community with a shared future for mankind. However, factors such as political relations and cultural distance have affected bilateral trade (BT) between China and CRBR. Further analysis is required to explore the association between UT and policy, infrastructure, financial and people-to-people connectivity. A multiple linear regression analysis using SPSS 20 revealed that: (1) IC, FI, PPB and improved economic levels can promote BT to varying degrees, but spatial distance inhibits the development of BT; and (2) the coordination between policy subjects does not promote UT up to any significant level. Accordingly, strengthening infrastructure and FI, promoting people-to-people and bilateral exchanges, and opening extra China-Europe freight trains and maritime transport will enhance UT, expand BT and invigorate the global economy.