Gravity Business Model Affection of One Belt – One Road Initiative

Abstract

Since China launched the “The Belt and Road Initiative” (B&R) project in 2013, more than 70 countries have joined the project and signed a trade agreement with China. The rapid development of international trade between China and the rapid development of international trade between China and countries along the “Belt and Road” is a huge potential market, but at the macro-level, the development trend of the international economic and political situation is not ideal. The European Union and China have also broadened and deepened their relations under a complex architecture of now more than 60 political, economic, sector and people-to-people dialogue formats. The background of this paper comes from the status of trade and future development prospects.

This paper focuses on the research on the trade potential of China along The Belt and Road Initiative countries. At first, it explains the researching background, selects the data of 100 trading countries and Chinaʼs import and export trade in 2008–2017 and explains the regression model, the meaning of each explanatory variable and the prediction of possible regression results. Then the data gathered in each database is substituted into the gravity model, and the stochastic frontier gravitation model is derived by reference to the stochastic frontier method. Based on this, the panel data are processed in the STATA-software by using the stochastic frontal gravitation model. The influence of variables on trade has yielded significant results, and the positive correlations of other factors except trade are obtained. Through the comparison of import and export, it proves that China is an export-oriented trading country. Export has more advantages and yet import also plays key role in the domestic economic economy development. The authors made the questionnaire research to the target students in the universities in Asia and European countries and made the analysis of the critical factors affect the perceptions of “One Belt and One Road Initiatives”. The contribution of this article has set up the idea that education and E-commerce have paved the way for international economic growth.

National social science fund of China (16BJY057) project related.