Research on The Regional Economic Effects of “The Belt & Road Initiative” and China’s Countermeasures_Based on GTAP Model

“The Belt and Road Initiative” sponsored by China leads to a new era of regional economic cooperation to the countries along the route, which also deepened China's opening policy to the outside world. A series of policies, such as trade facilitation and infrastructure connectivity, have boosted the economic development of China and the countries along the route significantly. Using the GTAP(Global Trade Analysis Project) model, by dividing the industrial sectors according to the factor intensity and resetting the main regions according to official divisions, this paper has measured the economic effects of “The Belt and Road Initiative” on China and the countries along the route, with the application of policy shocks based on quantification of import tariffs and transportation costs. Through quantitative research on the Initiative's expected economic effects with GTAP model, the numerical simulations show that the main policies of the Initiative have promoted the economic development in this area positively and prominently. For instance, both the trade facilitation and infrastructure connectivity under the Initiative have strengthened economic growth significantly with welfare improvement, trade optimization and industrial output growth etc.