China’s Belt and Road: Can Europe Expect Trade Gains?

Published on: 2016-12-09


Alicia Garcia-Herrero
Alicia Garcia-Herrero, HKUST IEMS Faculty Associate and Chief Economist for the Asia Pacific at NATIXIS, asks how Xi Jinping’s One Belt One Road initiative will affect EU trade.

The colossal infrastructure project is set to upturn trade relationships across Eurasia, yet the examination of its effects is still “embryonic”. Who will be the major winners and losers in trade? How would FTAs between China and OBOR nations affect the EU? In this latest IEMS Thought Leadership Brief, Prof García-Herrero makes the case for why it is time for the EU to actively participate in the Belt and Road Initiative. The study was conducted at Bruegel Research Institute with colleague Jianwei Xu.

View Full Brief (PDF)

Key Points

  • Better transport links along the Belt and Road benefits EU trade the most due to cheaper rail transportation.
  • Free trade agreements between China and Belt and Road nations would hurt EU trade competitiveness in the region.
  • Combining FTAs with infrastructure development benefits both the EU and Asia, though Asia more so. Land-locked countries benefit more than coastal ones.

This brief is based on a Bruegel blog article titled “What does China’s ‘belt and road initiative’ mean for EU trade?“.

Related Content

[IEMS Working Paper] “China’s Belt and Road Initiative: Can Europe Expect Trade Gains?” by Alicia Garcia-Herrero and Jianwei Xu

[IEMS-EY Event] Presentation from IEMS-EY event “One Belt One Road: Impacts on Trade and Investment” (watch Alicia’s segment directly here)

[External] Bruegel blog article “UK-China agreement on trade in services is no substitute for a UK-EU deal” by Alicia Garcia-Herrero


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