Quan-Ding Liu

To study China's development strategy, we have to mention the One Belt And One Road initiative what is now known as Belt and Road Initiative (BRI), and China's FTA development strategy is no exception. BRI is one of China's important national development strategies. BRI's economy is much bigger than America's "Marshall Plan"[1], and it is a big undertaking that Beijing has proposed to the international community, with more than $5trln in international infrastructure projects. The Chinese government promoted this national strategy through such core ideas as "development", "mutual respect and trust", "the old Silk Road story", "Action speaks louder than words", "China is a partner, not a colonialist" and "win-win" （Gao, May Hongmei, 2020.

In the international context of the global economic "recession" caused by the trade war between China and the US, the COVID-19 pandemic, Trump's protectionism and the UK's departure from the EU, China is facing up to the new trend of globalization through BRI. Singapore, Qatar, India, Russia, Saudi Arabia, Czech, Poland, Israel, Hungary and Malaysia are among the top 10 countries along the "One Belt And One Road" in terms of macroeconomic development. The One Belt And One Road "line presents a pattern of close regional economic level （leipin, 2020） Among the countries along the BRI route, China has a certain degree of trade dependence on the countries with large economies in Asia and Europe, while most of the Asian countries have a great degree of trade dependence on China.

The economic powers along the route are more important to China's trade development in terms of the broad margin of trade potential （types of trade products） and the intensive margin （total trade volume） （Xie Yiqing, Le Venter, 2020. Through BRI, China has gradually built a global ecosystem of South-South cooperation, Shanghai Cooperation Organization, China-ASEAN FTA, RCEP, 16 + 1, Asian Infrastructure Investment Bank, Silk Road Fund and New Development Bank. The operation of this new system can play a role in revitalizing free trade and rebalancing the trading system to the benefit of developing countries （Andrew Podger, 2019.  

Some scholars even believe that BRI will greatly change the global economy in the next few years （Lars Wachter, 2020).  In "Belt and Road: a Chinese World Order", Lyailya Nurgaliyeva directly points out that China's "One Belt And One Road" initiative （BRI） is a means to establish a new World Order, which will replace the current US-led global system （Lyailya Nurgaliyeva, 2019）.

BRI promotes the development of FTA in China, which in turn makes One Belt And One Road's "circle of friends" closer and more stable. With the deepening of the BRI, China and the "area" all the way along the countries will sign or upgrade the FTA on the agenda: take effect between China and Georgia the FTA, complete the FTA negotiations with Mauritius, sign FTAs with Singapore upgrade protocol, and panama launched FTA negotiations, regional comprehensive economic partnership agreements （RCEP） positive progress was made in talks, and the Eurasian economic union signed economic cooperation agreement. Through the signing of the FTA, China's economic ties with countries and regions along the belt and road are getting closer, and a network of high-standard FTAs, based on the surrounding areas, radiating "One Belt And One Road" and oriented to the whole world, is taking shape at an accelerating pace.

FTA between China and Georgia, for example, the FTA is the "area" initiative launched after start negotiations between China and the relevant countries and reached the first FTA, is also China's first FTA with Eurasia countries, milestones and model significance, to promote the "area" closer economic and trade cooperation between relevant countries and institutionalized operation plays an important role. With the entry into force and implementation of the agreement, bilateral trade between China and Georgia continues to grow. According to the data of the National Bureau of Statistics of Georgia, the bilateral trade volume between China and Georgia reached us $ 257 million from January to March 2019, with a year-on-year growth of 26.8%. Among them, the export of Georgia to China was USD 35.2552 million, with a year-on-year growth of 72.6%. Imports from China reached us $222 million, up 21.6% year on year.

With the implementation of BRI strategy, China has become more closely connected with countries along the routes. BRI has deepened the connectivity of countries along the belt and Road, laid a political, economic and social foundation for China to sign FTAs with countries along the Road and establish FTA, and promoted the implementation of China's FTA strategy （Wang Yiwen, 2019）. According to the data released by the ministry of commerce of China on January 24, 2019[2], the total import and export volume of goods between China and the "One Belt And One Road" countries along the belt and road reached 1.3 trillion us dollars in 2018, with a year-on-year growth of 16.3%, higher than the growth rate of China's foreign trade in the same period of 3.7 percentage points, accounting for 27.4% of the total foreign trade value.

Trade has become more frequent and areas of cooperation have expanded. The potential of two-way investment has also been further unleashed. Chinese enterprises' non-financial direct investment in the countries along the Belt and Road reached us $15.64 billion, up 8.9% year on year and accounting for 13% of the total in the same period. Direct investment in China from countries along the belt and Road reached us $6.08 billion, up 11.9% year on year. At the same time, China has gradually established high-standard FTA networks in BRI countries. China has formally entered into force an FTA with Georgia, concluded negotiations on an FTA with Mauritius, signed a Protocol to upgrade a FTA with Singapore, made positive progress in RCEP negotiations, and signed an economic and trade cooperation agreement with the Eurasian Economic Union. Among the FTAs signed and in force in China, those signed with BRI countries account for more than half. Since the China-U.S. trade war, some new features have emerged in China's foreign trade structure. First, the structure of the international market is becoming more diversified. The trade share with emerging markets further increased, reaching 57.7%, and the dependence on traditional markets decreased. Second, the structure of export goods upgrading. The export of mechanical and electrical products increased to 58.7%, among which the export of high-tech and high value-added products increased significantly. Third, the import of consumer goods increased significantly. In the first 11 months of 2018, China imported nearly 1.1 trillion yuan of consumer goods, up 12% year-on-year. Fourth, private enterprises continue to make efforts. In the structure of export entities, the export share of private enterprises has increased to 48%, and their role as the main force has been further played.[3]

Under the joint promotion of BRI and FTA strategies, economic and trade cooperation between China and BRI countries along the routes has achieved remarkable results. By May 2017, China had signed and implemented FTAs with 11 countries along the One Belt And One Road route, including the China-ASEAN FTA, the China-Pakistan FTA , and the China-Singapore FTA . Total trade volume reached 20 trillion yuan. From 2014 to 2016, China's trade with countries along the One Belt And One Road totaled about 20 trillion yuan, growing faster than the global average. During the same period, Chinese enterprises invested more than us $50 billion in the countries along the Belt and Road. Meanwhile, the Construction of China-Laos railway has been started. The construction or operation of China-Russia, China-Kazakhstan, China-Myanmar oil and gas pipeline projects is progressing in an orderly manner.

Chinese companies have set up 56 overseas economic and trade cooperation zones in 20 countries along the Belt and Road, with a total investment of over us $18.5 billion, generating over US $1.1 billion in tax revenue and 180,000 jobs for the host countries. Made in China, built in China and served in China are also welcomed by more and more countries along the routes. Countries along the belt and Road also have more products, services and resources flowing into China. In terms of trade costs, countries along the BRI have lower trade costs due to geographical location and transportation network. Transportation costs alone could save a lot of money. Research by Francois DE Soyres et al. （2019）[4] on BRI transport costs shows that the average transport time decreases by 1.2% to 2.5% worldwide, resulting in a reduction of 1.1% to 2.2% in total trade costs. For the economies along the One Belt And One Road route, the change in transport time and trade costs was between 1.7% and 3.2%, and 1.5% and 2.8%, respectively. Economies along the BRI have benefited most. Transport times in these corridors were reduced by up to 11.9 per cent and trade costs by up to 10.2 per cent. Trade between the BRI countries has also been remarkable. Li, Chen-Yu,Lai, An-chi,Wang, Zhan-Ao,Hsu, Yi-Chung （2019） investigated the achievements of BRI in international trade. The survey USES the traditional enhanced dickie fuller （ADF） test and a one-off structural breakpoint in bilateral trade data between China and the 64 countries along the 'One Belt And One Road' route from 2010 to 2017. The results show that in 46 countries （72%）, unit-based trade flows and trade flow shocks appear to occur more frequently after these countries have announced these initiatives. The 21st century maritime silk road and the silk road economic belt initiative not only affect the One Belt And One Road, but also affect the bilateral trade volume of these countries. Bilateral trade mechanism can serve as a stabilizing force to promote the economic integration of countries

(Quan-Ding Liu is associated with Office of International Cooperation and Exchange, Baoji University of Arts and Sciences, China )

[1]  The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative passed in 1948 for foreign aid to Western Europe. The United States transferred over $12 billion (equivalent to over $129 billion as of 2020)[1] in economic recovery programs to Western European economies after the end of World War II.

[2] 来源:人民网，我国与一带一路沿线国家自贸区网络加速形成，2019-01-28 10:24:19（http://politics.people.com.cn/n1/2019/0125/c1001-30589901.html）

[3] Data Source：：央广网，中国已与“一带一路”沿线11个国家实施自贸协定，2017-05-11 13:19:30（http://finance.cnr.cn/jjgd/20170510/t20170510_523748711.shtml）

[4] Research by Francois DE Soyres et al. (2019) on BRI transport costs shows that the average transport time decreases by 1.2% to 2.5% worldwide, resulting in a reduction of 1.1% to 2.2% in total trade costs.For the economies along the One Belt And One Road route, the change in transport time and trade costs was between 1.7% and 3.2%, and 1.5% and 2.8%, respectively.Economies along the BRI have benefited most.Transport times in these corridors were reduced by up to 11.9 per cent and trade costs by up to 10.2 per cent.Trade between the BRI countries has also been remarkable.