Does the Belt and Road Initiative Promote Value Chain Connection Between China and the Silk Road Countries?

The global value chains have become the core skeleton of the global economy. As a large-scale international cooperation initiative, the Belt and Road Initiative (BRI hereafter) may have a significant impact on the global economic landscape. In this context, the spatiotemporal pattern and evolution of the value chain connection of the Silk Road countries and whether the BRI will promote the value chain connections between China and these countries are important research questions for understanding the changing global economic landscape. This paper employs input-output analysis, network analysis and difference-in-differences based on Propensity Score Matching (PSM-DID) to conduct an in-depth quantitative study of these questions. The results show that, first, the overall value chain connection between China and the Silk Road countries has been rising since 2001. From the perspective of geographical distribution, Southeast Asia is the highest value chain connection region with China, and the growth in the central and eastern Europe is the most significant, whereas the central Asia is the lowest value connection region. From the perspective of complex network analysis, China’s position in the network of value flow among the Silk Road countries has been increasing continuously, and it has been in the lead position since 2008. Besides, the implementation of the BRI has had a significant positive influence on the overall value chain connection between China and the Silk Road countries, but this positive influence is limited to the central and eastern Europe region, whereas it is not significant in other regions. Finally, this paper suggests that to promote the development of value chain connection, the Silk Road countries need to develop more specific policies related to value chains. Policymakers need to be able to correctly identify the comparative advantages of the region and the types of value chains that are compatible with them and then find suitable partners and formulate targeted promotion policies.