China's belt and road initiative: A preliminary quantitative assessment

Using a global computable general equilibrium model, this paper investigates the macroeconomic impact of China's Belt and Road Initiative (BRI). Accounting for the externalities of infrastructure development with respect to trade cost reduction and energy efficiency improvement, the analysis finds BRI would bring sizable benefits to the world economy in terms of welfare and trade, even under conservative assumptions about the size of total investment under the initiative. However, China and other BRI countries need to address several important challenges in order to implement this initiative with success and realize these benefits.