Identifying export opportunities for China in the ‘Belt and Road Initiative’ group of countries: a decision support model approach

• Pages: 101-126
• Published date: 03 June 2021
• Date: 03 June 2021
• DOI: https://doi.org/10.1108/JITLP-11-2020-0061
• Subject Matter: Strategy,International business,International business law,Economics,International economics,International trade
• Author: Martin Cameron,Ludo Juul Cuyvers,Dahai Fu,Wilma Viviers

Identifying export opportunities

for China in the ‘Belt and Road

Initiative’group of countries: a

decision support model approach

Martin Cameron

TRADE Research Entity and Trade Advisory, North-West University,

Potchefstroom, South Africa

Ludo Juul Cuyvers

Department of Management, Faculty of Applied Economics,

University of Antwerp, Antwerp, Belgium and TRADE Research Entity,

North-West University, Potchefstroom, South Africa

Dahai Fu

School of International Trade and Economics, Central University of Finance and

Economics, Beijing, China, and

Wilma Viviers

TRADE Research Entity, North-West University, Potchefstroom, South Africa

Abstract

Purpose –This paper aims to identify China’s realistic exportopportunities (REOs) among the “Belt and

Road Initiative”(BRI)group of countries.

Design/methodology/approach –The methodologyused is a decision support model (DSM)that f‌ilters

data based on countryrisk; macro-economic country performance; market potentialin terms of import growth

and import marketsize; and market access conditions. The high-potential REOs are revealed.

Findings –Out of the 84 BRI countries, 79 countries represent42.5% of China’s REOs globally and 26.9%

of China’s globally untapped potential value. Interestingly, 17.9% of this untapped potential is in the BRI

countries Poland, Austria and the Czech Republic, thus providing a potentially important route into the

EuropeanUnion.

Research limitations/implications –If China wants to develop additional or new markets, focus

should be put on the BRI markets outside of the top 20. China should also investin the development of most

BRI economies, to ensure theirfuture growth and increased demand for import of products and services from

China.

JEL classif‌ication –F13, F145, F15, F17, O50

The authors are grateful for the comments and suggestions received from the participants of the

93rd WEAI Annual Conference, the 2018 China–Brazil Economic and Development International

Conference and the Sixth Annual Conference of the Association of Sino-Russian Economic

Universities. This work was supported by the Humanity and Social Science Foundation of Ministry

of Education of China (No. 20YJC790024) and the National Research Foundation of South Africa (No.

115360). Any opinion, f‌indings and conclusions or recommendations expressed are those of the

authors.

Identifying

export

opportunities

for China

101

Received13 November 2020

Revised22 February 2021

11March 2021

Accepted11 March 2021

Journalof International Trade

Lawand Policy

Vol.20 No. 2, 2021

pp. 101-126

© Emerald Publishing Limited

1477-0024

DOI 10.1108/JITLP-11-2020-0061

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1477-0024.htm

Practical implications –The shortlist of China’s REOs in theindividual BRI countries makes for more

eff‌icient planning and prioritising of export development activities. It also highlights the need for

policymakers to lookbeyond international trade and focus on how to also improve the domesticeconomies of

the BRI partners.

Originality/value –To the best of authors’knowledge, this paper is the f‌irst to usethe DSM to identify

China’s REOs at HS6-digit level within the BRI group. The f‌indings haveimportant implications for China’s

export promotionagencies, industry associations and individualcompanies.

Keywords China, Export promotion, Comparative advantage, BRI, Decision support model,

International market research, Realistic export opportunities, DSM

Paper type Research paper

1. Introduction

The Chinese President Xi Jinpingcalled for the establishment of a new regional cooperation

model through the construction of the “Silk Road Economic Belt”during his visit to

Kazakhstan in September 2013. While visiting Indonesia in October 2013, he called for the

creation of the Asian Infrastructure Investment Bank and the construction of the “21st

Century Maritime Silk Road”. These two initiatives together are off‌icially named the “Belt

and Road Initiative”(BRI).

The BRI aims to enhance trade ties, mutual trust and greaterpolicy coordination among

those countries that link China’sancient land and maritime silk routes to Europe, the Middle

East, Africa and the rest of Asia (Johnston, 2019). Among the BRI’s priorities are to

rigorously research and identify optimal investment and trade facilitation solutions,

eliminate barriers to trade and investment and createa free trade zone among participating

countries[1]. The BRI also aims to strengthen bilateral investment ties and facilitate the

formation of cross-countryindustry value chains. To this end, China aims to reduce its own

trade barriers, increase internal market eff‌iciency and strengthen its regional economic

integration efforts.

The BRI has provided a stimulus to China’s efforts to deepen trade, investment and

infrastructurelinks with the associated countries. Although the BRI could help foster a trade

revival for China, it also affords BRI countries access to China’s overseasdirect investment,

thereby assisting them in the development and/or upgrading of their infrastructure. Such

developments create important export opportunities for China. However, the BRI countries

are very diverse in terms of their development status, political system, market size,

consumption characteristics and transport infrastructure. As a result, Chinese companies

are exposed to a range of opportunitiesin different countries. Owing to resource limitations,

though, relatively few of China’s potential export opportunities havea good chance of being

successfully and sustainably exploited. Yet, a key component of a successful export

promotion drive is the ability to identify the “most realistic”foreign markets for specif‌ic

products or groups of products,using comprehensive and reliable data.

The main purpose of this paper is to reveal China’s most realistic export opportunities

(REOs) in the BRI countries usingthe decision support model (DSM) approach. This will add

rigour to China’s export promotion efforts. There are many models available for choosing

international markets: the Green and Allaway shift-share model, trade-off model of

Papadopulous et al., the InternationalTrade Centre’s (ITC) multi-criteria method, the gravity

model, the product space network methodology, Canada’s Trade Opportunity Matrix and

the TRADE-DSM are but a few (Steenkamp et al., 2012). For this paper, the TRADE-DSM

was selected as it was specif‌ically designed for international market selection purposes and

has been widely used (Cuyvers and Viviers, 2012). For example, since 1995, the TRADE-

DSM has been applied in various countries, including Belgium, Thailand, Rwanda, the

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