Data Tells: Easing trade and investment along the Belt and Road
Since the Belt and Road Initiative (BRI) was proposed, China has set up a series of cross-border channels, platforms, and programs to facilitate trade and investment between all countries involved, laying down the foundations for long-term, stable and sustainable growth along the Belt and Road.
While the ancient Silk Road saw impressive trade networks established between East and West, bringing exotic goods to new markets, today's Belt and Road Initiative is taking place in a sophisticated and often complicated global trade and investment system that involves tariffs, e-commerce, compliance with local laws and multiple currencies.
With the Belt and Road Initiative designed to boost trade, China in 2018 lowered import tariffs on four occasions. Last September, the Ministry of Finance confirmed that tariff reductions on 1,585 taxable products would see the overall tariff level lowered from 9.8 percent the year before to 7.8 percent.
According to the Chinese Ministry of Commerce (MOFCOM), between 2013 and 2018, Chinese companies directly invested more than 90 billion U.S. dollars in countries along the Belt and Road, an average annual growth rate of 5.2 percent.
The value of newly signed foreign contracted projects in countries along the route exceeded 600 billion U.S. dollars, an average annual growth rate of 11.9 percent.
Further efforts on trade liberalization have seen the establishment of 16 free trade agreements (FTAs) with 24 countries and regions, according to MOFCOM. Partnerships with blocs like ASEAN have seen tariffs removed on more than 90 percent of products and services traded between China and Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.
The FTA established with Pakistan in 2007 plays a key role in the China Pakistan Economic Corridor, with bilateral trade expanding rapidly in the past decade to 19.1 billion U.S. dollars in 2018.
China currently has 24 FTA negotiations under construction, while 82 economic and trade cooperation zones set up in 24 Belt and Road countries have helped create 300,000 local jobs, the National Development and Reform Commission said earlier this month.
Following the investment of around 29 billion U.S. dollars, the 82 zones have seen more than two billion U.S. dollars in taxes paid to their host countries, the NDRC reported.
According to the Development Research Center of China's State Council, the economic and trade cooperation zones are an increasingly important platform for Chinese enterprises to conduct foreign direct investment.
The zones allow companies from China, the host country and third countries to establish businesses, with several focusing on cross-border economic cooperation.
The rapid expansion of the e-commerce sector, particularly in China, has also been reflected in the development of BRI trade facilitation. Thirty-five comprehensive cross-border e-commerce pilot zones have been established in cities across China, the State Council reported in August 2018.
According to the Department of Foreign Trade under MOFCOM, the e-commerce pilot zones represent a new engine of economic transformation and upgrading, a new platform for innovation and entrepreneurship, as well as a new carrier to serve the construction of the Belt and Road.
China has established bilateral e-commerce cooperation mechanisms with 17 countries, formed e-commerce cooperation documents and accelerated corporate coordination and brand cultivation under multilateral mechanisms such as BRICS.
By 2017, cross-border e-commerce trade was worth 7.6 trillion yuan (1.12 trillion U.S. dollars), China Daily reported citing a study by iResearch.
The Asian Infrastructure Investment Bank also plays an important role in facilitating trade and investment along the Belt and Road. 93 countries and regions have signed up as members to the Beijing-based institution, which provides renminbi financing to countries along the Belt and Road.
Renminbi payments have also expanded since the BRI was proposed, with 165 banks in 40 countries along the Belt and Road now able to process transactions in the Chinese currency.