Can the Belt and Road Initiative alleviate the negative impact of TPP on China?
【Abstract】TPP is an important part of Asia-Pacific strategies of the Obama Government. However, with the new President Trump taking office in the White House, the progress of TPP has met certain hindrance. Though Trump withdrew the United States from the TPP, it does not mean that the TPP is completely aborted and traditional allies still negotiate on the signing of the Comprehensive Progressive Trans-Pacific Partnership (CPTPP). How will the adjustment of the TPP policy by the United States affect China? What economic benefits will the Belt and Road Initiative (BRI) that China put forward to counter potential impacts of the TPP bring to the countries along the Belt and Road? Can the BRI become an effective measure for China to counter the TPP? Further, what kinds of differentiated industrial impacts will the TPP and the BRI bring to China and what kinds of challenges and opportunities? Analyses and discussions of these questions will be very helpful of enriching China’s strategies to counter the TPP as well as accelerating the progress of the BRI. With a Global Trade Analysis Project (GTAP) model and the latest database GTAP 9.0, this paper quantitatively evaluates the economic effects of the TPP and the BRI in terms of the actual GDP, the social welfare and the import and export trade. The study sets six policy scenarios centering on whether the U.S. should be back to the TPP and how will China push forward the BRI to selectively analyze benefits and losses of China under different macro-economic effects. The main conclusions of the paper are as follows. (1) Judging from actual GDP and residents’ welfare, China suffers from such strategy no matter the U.S. returns to the TPP or not. In the scenario of GPTPP, the actual GDP of China decreases by 0.019% and the residents’ welfare level decreases by USD 4.111 billion. (2) Promotion of the BRI is able to effectively alleviate the negative impacts of the TPP on Chinese economy: when the BRI and the TPP both exist, the actual GDP of China increases by 0.055% and the residents’ welfare level increases by USD 11.465 billion. (3) From the perspective of unimpeded trade, promotion of the BRI can stimulate outputs of energy-intensive industries of China, especially the textile and garment industry, the steel and metal industry and the chemical industry, which is helpful to alleviate the problem of overcapacity in the energy-intensive industries of China.(4) Implementation of the BRI has strong negative impacts on South Korea, but if South Korea could participate in the BRI, significance improvement can be realized in its economic growth and residents’ welfare level. The marginal contributions of this paper can be elaborated from three aspects. First, this paper introduces both the TPP and the BRI to comparatively analyze international economic effects of different regional economic cooperation modes, which can provide a valuable technical reference for China to promote the BRI in the context of the TPP. Second, this paper provides a quantitative evaluation of the withdrawal of the U.S. from the TPP, and the impact of the CPTPP on China is also discussed, which will be useful for China to adopt reasonable measures to cope with the CPTPP. Third, the impacts of the TPP on different countries or areas along the Belt and Road are quantitatively evaluated to reveal benefits and losses of these countries or areas under different the TPP strategies, which is helpful in promoting those countries to participate in the BRI to cope with the negative impacts of the TPP.
【Keywords】 CPTPP; Belt and Road Initiative; GTAP model; energy intensive industries; unimpeded trade;
(Translated by Lin Jing)
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