The 'Belt and Road Initiative' and Comparative Regional Productivity in China

Asia & the Pacific Policy Studies, Issue 2, Volume 5, 2018, pages 168-181.

Crawford School of Public Policy, The Australian National University

14 Pages Posted: 21 Jun 2018

See all articles by John Gibson

John Gibson

University of Waikato; Motu Economic and Public Policy Research

Chao Li

University of Waikato, Management School, Economics, Students

Date Written: March 15, 2018

Abstract

We study potential internal effects of China's Belt and Road Initiative. These effects may occur sooner than the international effects, since they face no delay from partner negotiations and from financing and security concerns. For a key part of the overland Silk Road Economic Belt, we identify 46 prefectural‐level units in a corridor from the China–Kazakh border to Xi'an that are likely to see increased investment and economic activity from Belt and Road. These units are smaller, more diverse, poorer, and less productive than are prefectural‐level units in the rest of China. The Belt and Road Initiative will disperse some economic activity to places that the market would not direct it, such as to this corridor. Given that these areas are less productive and are likely to have lower absorptive capacity, investments here will have an efficiency cost since they should yield more GDP if deployed elsewhere in China.

Keywords: Belt & Road, China, DEA, Regional Policy, Sub-national Productivity

Suggested Citation

Gibson, John and Li, Chao, The 'Belt and Road Initiative' and Comparative Regional Productivity in China (March 15, 2018). Asia & the Pacific Policy Studies, Issue 2, Volume 5, 2018, pages 168-181.. Available at SSRN: https://ssrn.com/abstract=3188461

John Gibson (Contact Author)

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Motu Economic and Public Policy Research

19 Milne Terrace
Island Bay
Wellington, 6002
New Zealand

Chao Li

University of Waikato, Management School, Economics, Students ( email )

Hamilton
New Zealand

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