Trade Challenges along the Belt and Road

China faces challenges as well as opportunities in its trade cooperation with the countries taking part in the Belt and Road Initiative.

By the end of 2016, the overall GDP and population of the countries taking part in the initiative accounted for 16 percent and 43.4 percent of the global total respectively. The foreign trade of these countries also accounted for 21.7 percent of the world total.

However, China cannot ignore the problems that exist. Tariff and nontariff barriers are high along the routes, as most of the participating countries are developing and several are some of the least developed countries in the world.

The soaring of China’s trade surplus with these countries may give rise to trade frictions.

Customs clearance in trade for these countries lacks efficiency and transparency, and many of these countries have not signed free trade agreements with China nor are they yet a member of the World Trade Organization.

Given the regional uncertainties along the Belt and Road routes, there needs to be trade dispute settlement mechanisms and risk prevention and control systems for trade issues on the Belt and Road routes.

(The authors Yang Rongzhen and Jia Ruizhe are from China Institute for WTO Studies, UIBE. This is an excerpt from their article which was first published in Chinese. The translator is Li Yang.)