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If you want to get rich, first build a road

Otto Syk, Marcus LU (2018) NEKH01 20181
Department of Economics
Abstract
This paper examines the effect of Chinese OFDI on China’s bilateral trade with affected countries, to investigate the possible build-up of a Eurasian China-centric trade network. The main contribution of the paper is to have combined economics, war theory and geopolitics to analyse and produce a theoretical framework for it.

Whereas there is a lack of consensus on the effect of FDI on trade in general, this study suggests that the influence of the CCP over the Chinese economy allows the party to use Chinese OFDI for its own interests. Furthermore, trade has become a vital interest to the CCP. Another problem for the CCP is the increasing geopolitical tension with primarily USA. According to this paper, the formation of a China-centred... (More)
This paper examines the effect of Chinese OFDI on China’s bilateral trade with affected countries, to investigate the possible build-up of a Eurasian China-centric trade network. The main contribution of the paper is to have combined economics, war theory and geopolitics to analyse and produce a theoretical framework for it.

Whereas there is a lack of consensus on the effect of FDI on trade in general, this study suggests that the influence of the CCP over the Chinese economy allows the party to use Chinese OFDI for its own interests. Furthermore, trade has become a vital interest to the CCP. Another problem for the CCP is the increasing geopolitical tension with primarily USA. According to this paper, the formation of a China-centred trade network would help the Chinese domestic economic situation, increase Chinese influence in Asia and increase the economic resilience of China. All this would help address the aforementioned concerns facing the party.

This was tested empirically using a modified version of the gravity model of trade. The result was in line with the theoretical prediction but not in line with the prediction of the gravity model. This could not be explained but was still taken to support the theory, thus opening for future studies on the subject. (Less)
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author
Otto Syk, Marcus LU
supervisor
organization
course
NEKH01 20181
year
type
M2 - Bachelor Degree
subject
keywords
OFDI, trade, China, Belt and Road Initiative, China-centric trade network
language
English
id
8947664
date added to LUP
2018-07-05 11:27:15
date last changed
2018-07-05 11:27:15
@misc{8947664,
  abstract     = {This paper examines the effect of Chinese OFDI on China’s bilateral trade with affected countries, to investigate the possible build-up of a Eurasian China-centric trade network. The main contribution of the paper is to have combined economics, war theory and geopolitics to analyse and produce a theoretical framework for it.

Whereas there is a lack of consensus on the effect of FDI on trade in general, this study suggests that the influence of the CCP over the Chinese economy allows the party to use Chinese OFDI for its own interests. Furthermore, trade has become a vital interest to the CCP. Another problem for the CCP is the increasing geopolitical tension with primarily USA. According to this paper, the formation of a China-centred trade network would help the Chinese domestic economic situation, increase Chinese influence in Asia and increase the economic resilience of China. All this would help address the aforementioned concerns facing the party. 
 
This was tested empirically using a modified version of the gravity model of trade. The result was in line with the theoretical prediction but not in line with the prediction of the gravity model. This could not be explained but was still taken to support the theory, thus opening for future studies on the subject.},
  author       = {Otto Syk, Marcus},
  keyword      = {OFDI,trade,China,Belt and Road Initiative,China-centric trade network},
  language     = {eng},
  note         = {Student Paper},
  title        = {If you want to get rich, first build a road},
  year         = {2018},
}