Has the Belt and Road Initiative Improved the Quality of Food Imported by Chinese Enterprises?

• Published date: 01 March 2022
• Author: Kexuan Zhou,Sanjay Kumar,Futao Lu,Qiaoyun Fang,Linhui Yu
• Date: 01 March 2022
• DOI: http://doi.org/10.1111/cwe.12410

©2022 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 60–83, Vol. 30, No. 2, 2022

60

*Kexuan Zhou, Assistant Professor, School of Economics and Management, Guangdong Open University,

China. Email: 2009zhoukexuan@163.com; Sanjay Kumar, Professor, College of Business, Valparaiso

University, USA. Email: Sanjay.Kumar@valpo.edu; Futao Lu (corresponding author), Assistant

Professor, School of Law, Zhejiang University City College, China. Email: lufutao@vip.qq.com; Qiaoyun

Fang, Associate Professor, School of Economics, Zhejiang University of Technology, China. Email:

fangqy2018@163.com; Linhui Yu, Professor, School of Economics, Zhejiang University, China. Email: yulh@

zju.edu.cn. This research was supported by the National Natural Science Foundation of China (Nos.71673251,

71873120, and 7217030190) and the Characteristic Innovation Project of Colleges and Universities in

Guangdong Province of China (No. 2021WTSCX329).

Has the Belt and Road Initiative Improved the

Quality of Food Imported by Chinese Enterprises?

Kexuan Zhou, Sanjay Kumar, Futao Lu, Qiaoyun Fang, Linhui Yu*

Abstract

Using micro-level data from 2009–2015 and the difference-in-difference method, this

paper empirically examines the impact of the Belt and Road Initiative (BRI) on the

quality of food imported by Chinese enterprises from BRI countries. Our baseline

results show that the BRI signifi cantly improved the quality of food imported from these

countries. Further investigation reveals that trade patterns, ownership types, import

regions, transportation methods, and product quality show significant heterogeneous

effects in infl uencing the quality of imported food. A mechanism analysis indicates that

the BRI improves the quality of imported food through three main channels: import trade

environment enhancement, competition effect, and consumption upgrading, with the

competition effect having the largest impact compared with the other two channels. Our

fi ndings suggest that China should not only improve the infrastructure in BRI countries

but also use the BRI as an opportunity to enhance the level of cooperation with BRI

countries and maintain stability and sustainability in cooperation with them.

Keywords: Belt and Road Initiative, difference-in-difference method, quality of

imported food

JEL codes: F13, F14, Q18

I. Introduction

Brexit and the recent Sino–US trade conflict have destabilized the global trading

environment. Increased complexity in the international trading environment has also

©2022 Institute of World Economics and Politics, Chinese Academy of Social Sciences

BRI and Quality of Food Imported by China 61

resulted in greater trade policy uncertainty. In March 2020, the global Economic

Policy Uncertainty Index reached a high of 348.11 points and this index is trending

upwards.1 Global trade volatility is increasing. In recent years, the WTO’s multilateral

coordination framework mechanism has failed to stabilize international trade. With

the WTO’s inability to influence and stabilize international trade, many countries are

giving increasing attention to a framework of regional cooperation and trading blocs

characterized by bilateral cooperation between nations. Regional cooperation has

become an essential means to eliminate trade friction and promote mutually benefi cial,

stable, and orderly trade.

In 2013, Chinese President Xi Jinping proposed a cooperative initiative to

build the New Silk Road Economic Belt and the 21st Century Maritime Silk Road,

referred to as the Belt and Road Initiative (BRI), creating a novel model for China’s

regional cooperation with foreign countries in the 21st century. The development and

advancement of the BRI have become a cornerstone of China’s rapid and sustained

foreign trade growth.

From early 2010, China’s economy has shifted from a rapid growth stage to a high-

quality development stage. The Chinese government is increasingly giving attention to

the quality of imported food due to food safety concerns. According to a 2020 report on

the Global Food Security Index published by The Economist, China ranks 39th globally

with a Food Security Index of 69.3 points. China lags behind developed countries and

regions such as Canada (ranked 12th), Ireland (ranked 2nd), and the US (ranked 11th),

and developing countries such as Poland (ranked 25th), Russia (ranked 24th), and

Uruguay (ranked 30th).

The literature has shown that improved imported food quality, resulting from an

import promotion strategy, can bring economic and social benefits. Such a strategy

can also help to improve domestic food enterprises’ productivity rapidly (Amiti and

Konings, 2007; Yu, 2015; Pane and Patunru, 2020). This, in turn, can drive the pace

of technological innovation in domestic food enterprises (Liu and Qiu, 2016; Bos and

Vannoorenberghe, 2019; Chen et al., 2020; Tang et al., 2020). Moreover, an import

promotion strategy can lead to expanding the scale (Feng et al., 2017) and quality

(Bas and Strauss–Kahn, 2015; Zhu and Tomasi, 2020) of food exported by domestic

enterprises. Ultimately, better quality food could help people’s needs for a better life

and could help to achieve the goal of the high-quality development of the Chinese

economy.

1The database is available from www.policyuncertainty.com (online; cited May 2021).