China's One Belt One Road: Opportunity or Threat? (March 2020)

75 pages. China brought its 'Go Global' policy to the next level with its pursuit of the multi trillion dollar Belt and Road Initiative (BRI) investment programme in 2013 to connect China on land and sea to Asia, Africa and Europe. Under the BRI, China has made heavy investments and involved in major infrastructure projects including roads, rail, ports, power plants and power lines across six main economic corridors. BRI promises huge potential benefits to China, diversifying its trading routes and expanding markets for its manufactured goods. From the BRI projects, China is expecting its annual trade with the participating countries to reach USD 2.5 trillion in the next ten years. In 2016 trade flows between China and BRI countries exceeded USD 916 billion and jumped to USD 1.1 trillion in 2017. As China expands its commercial and political influence in the world in its pursuit of global economic development via the BRI, this can be a growing concern for other exporting countries. On the other hand, transportation development via BRI is likely to benefit exporting countries other than China with improved connectivity. Hence, this study was undertaken by MREPC to assess the impact of China's BRI on Malaysia's export of rubber products as well as exports from other major exporting countries. A quantitative approach has been undertaken where the gravity modelling method was used to estimate the impact of BRI in terms of improved connectivity and reduced trade costs on the export of rubber products. Note that this study was conducted exclusively based on a statistical analysis.