Promotion Effects of China's Loans on Economic Development of Countries along the Belt and Road—An Empirical Analysis Based on 24 Countries Along the Belt and Road

doi:10.16716/j.cnki.65-1030/f.2021.02.006

Abstract

Abstract: In order to refute the faulty statement that China has led the countries along "the Belt and Road" (CBR) into "debt trap", the debt data for the 24 CBR are collected. It is found that measured by the ratios of the debt of the CBR to China to their GDP, the average annual debt burden of CBR is so much low. And empirically, there exists positive correlations between loans from China and CBR's economic growth, which demonstrates that loans from China to the CBR has promoted their economic growth. At the same time, the debt structure of the CBR shows that although the ratios of the debt of the CBR to China in their total foreign debt is increasing, so far, such debt structures are also driving their economic growth. And such feature is more obvious in the countries with high sovereign credit risk. These conclusions will help China put forward the CBR further to abstract more countries joining to the "Dual Circulation" Strategy.

Key words: "the Belt and Road" Initiatives, "Debt Trap", Economic Growth, Silk Road Economy, "Dual Circulation" Strategy, International Economic Circulation

CLC Number:

F831.6

Du Xiaorong, Zhou Jing. Promotion Effects of China's Loans on Economic Development of Countries along the Belt and Road—An Empirical Analysis Based on 24 Countries Along the Belt and Road[J]. Finance & Economics of Xinjiang, 2021, (2): 59-70.

References

[1] Hurley J,Morris S,Portelance G.Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective[J].Journal of Infrastructure Policy and Development,2019(1):139.
[2] Horn S,Reinhart C M,Trebesch C.China's Overseas Lending[Z].CEPR Discussion Papers,2019.
[3] Kaplan S B.The Rise of Patient Capital:The Political Economy of Chinese Global Finance[Z].Working Papers,2018.
[4] Singh A.The Myth of 'Debt-trap Diplomacy' and Realities of Chinese Development Finance[J].Third World Quarterly,2020(8):239-253.
[5] Reinhart C M,Rogoff K S.Growth in a Time of Debt[J].American Economic Review,2010(2):573-578.
[6] ToktaşY,Altiner A,Bozkurt E.The Relationship between Turkey's Foreign Debt and Economic Growth:An Asymmetric Causality Analysis[J].Applied Economics,2019(26):2807-2817.
[7] Warner A M.Did the Debt Crisis Cause the Investment Crisis?[J].The Quarterly Journal of Economics,1992(4):1161-1186.
[8] Hildreth W B,Miller G J.Debt and the Local Econom:Problems in Benchmarking Local Government Debt Affordability[J].Public Budgeting and Finance,2002(4):99-113.
[9] Afonso A,Agnello L,Furceri D.Fiscal Policy Rresponsiveness,Persistence,and Discretion[J].Public Choice,2010 (145):503-530.
[10] Krugman P.Financing vs.Forgiving a Debt Overhang[J].Journal of Development Economics,1988(3):253-268.
[11] Pattillo C,Poirson H,Ricci L.External Debt and Growth[Z].IMF Working Paper,2002.
[12] Schclarek A.Fiscal Policy and Private Consumption in Industrial and Developing Countries[J].Journal of Macroeconomics,2007(4):912-939.
[13] Kumar M,Woo J.Public Debt and Growth[J].IMF Working Papers,2010.
[14] Cohen D.Low Investment and Large LDC Debt in the1980's[J].American Economic Review,1993(3):437-449.
[15] Markus E,Presbitero A F.Public Debt and Growth:Heterogeneity and Non-linearity[J].Journal of International Economics,2015(1):45-58.
[16] 程宇丹,龚六堂.政府债务对经济增长的影响及作用渠道[J].数量经济技术经济研究,2014(12):22-37.
[17] 刘洪钟,杨攻研,尹雷.政府债务、经济增长与非线性效应[J].统计研究,2014(3):29-38.
[18] 赵新泉,陈旭.政府债务影响经济增长的非线性效应研究[J].国际金融研究,2018(2):54-65.
[19] 刘金林.基于经济增长视角的政府内外债规模研究:来自OECD的证据[J].宏观经济研究,2013(12):38-46.
[20] Cristina C W,Rother P.The Impact of High Government Debt on Economic Growth and Its Channels:An Empirical Investigation for the Euro Area[J].European Economic Review,2012(7):1392-1405.
[21] 莫亚琳,徐鹏程.东盟国家政府债务现状及风险研究[J].亚太经济,2016(3):18-23.