Forgotten effects in trade relations: a view from the Belt and Road Initiative (BRI)
Journal
Asian Education and Development Studies
ISSN
2046-3162
Date Issued
2020
Author(s)
Julio Rojas-Mora
Cristian Mondaca-Marino
Type
Resource Types::text::journal::journal article
Abstract
<jats:sec><jats:title content-type="abstract-subheading">Purpose</jats:title><jats:p>The purpose of this paper is to evaluate Chinese indirect trade relations in the global trade network to observe if the objectives identified by Cai (2017) in the Belt and Road Initiative (BRI) are being fulfilled, especially with Latin America and the Caribbean (LAC) countries.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title><jats:p>Using data from the UNCTAD (2016) for the period 2011–2015, a normalized exports network is built. It is analyzed with the Forgotten Effects Theory and the PageRank algorithm. A Monte Carlo experiment with 10,000 replicates is performed to account for its volatility.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Findings</jats:title><jats:p>The paper identifies one instance in which China's peripheral countries are importing raw materials and commodities -–oil products – to produce low technological value-added products, which, in turn, are exported to China. LAC countries do not have significant indirect trade relations with China when the former is the origin country, while the latter is the destination in a trade relationship. The trade network has a clear core-periphery structure, with China belonging to its core, although being only the fourth most central node in the network.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Originality/value</jats:title><jats:p>This paper contributes with both a new methodology for the analysis of indirect trade relations and the results found for China under the BRI and its trade relationship with LAC economies.</jats:p></jats:sec>
Subjects
pagerank
;
belt and road initiative (bri)
;
forgotten effects
;
indirect trade relations
;
trade centrality
;
monte carlo experiment
;
complex networks