How The Cooperative Tariffs Between China And64 The "Belt And Road" Initiative Countries Affect Multilateral Sections On Sectorial Levels Analyzed By The GTAP Model

The“Belt and road”initiative involves lots of areas and globalizing cooperation,the formation of bilateral cooperative tariffs is a measure to promote international trade through market’s effect.By through the results of econometric methods,it is easy to know the formation of cooperative tariffs is only a small part to promote the cooperation between China and the“Road and Belt”countries of goods’trade,while the decline of non-tariffs measurement would be the large part relatively to account it.So,the result of this research should only reflect a small part of the effect of the“Road and Belt”initiative.Up to May 16^th 2018,tariffs officers from more than 50 countries,regions or international organizations passed“The Astana’s the‘Belt and Road’cooperative tariffs’initiative”.Relative to other cooperative forms of globalization,tariffs are more suitable to be analyzed quantitively.The differences-in-differences strategy applied by this research is based on the bilateral tariffs data in the world bank’s WITS database,trying to get the net effect of the“Belt and Road”initiative on the cooperative tariffs between China and the“Belt and Road”countries.Based on this background,this research tries to resolve two questions.The first one is on which industries the“Belt and Road”initiative can make China and the“Belt and Road”countries form cooperative tariffs,and how the degrees of these cooperative tariffs are.The second one is how these formed cooperative tariffs can affect China,the“Belt and Road”initiative countries and the rest of world on aggregate and industrial levels.Concretely,this research based on the way how the WITS database computes the average tariffs in aggregate regions composed by several countries,separate the whole world into three parts of China,those 64 countries earliest joined the“Belt and Road”initiative and the 178 countries in the rest of the world.Based on the 47 industrial categories,we treat the aggregate region of 178 countries in the rest of world as control group to do differences-in-differences regression,trying to get how the“Belt and Road”initiative can affect the tariffs between China and the“Belt and Road”initiative countries on industrial levels.The structure of this research is a little bit different than traditional research,the structure we used based on the structure of Pablo D.Fajgelbaum（2020）,one research focuses on how fluctuation of bilateral tariffs on industrial levels affect economy in multiple aspects,studying based on general equilibrium model.After getting the magnitude of changed cooperative tariffs using econometric methods,we put them into GTAP models,then using run GTAP software to specifically compute how these changed cooperative tariffs affect the economy in multiple ways.Namely,the focus of this research is mainly to analyze the result run by the GTAP model.The regression result shows that,the cooperative tariffs between China and the“Belt and Road”countries mainly concentrate on agricultural and stock farming industries.Besides,industrial and manufactural industries also form cooperative tariffs.However,in other industrial fields,there are little or even non cooperative formed tariffs,which suggests there is still a large space for the“Belt and Road”initiative to establish cooperative tariffs.After getting the cooperative tariffs gained from the“Belt and Road”initiative,we insert these changed tariffs as shocks into the GTAP model,to simulate how these shocks can affect the economic world in multiple aspects.The result shows China is the most beneficial country under the cooperative tariffs formed under the“Belt and Road”initiative.Because of the decline of tariffs,Chinese consumers’surplus increased around467.83 million dollars.Chinese terms of trade increases 0.01%.The export value of Chines wheat industry increased 36.78%,fruit and vegetable industry’s export value increased 5.81%,living stock industry increased around 4.41%and meat industry increased around 8.09%.For the situation particular for the 64 the“Belt and Road”initiative countries,Chinese wheat industry’s export value increases 54.57%,living stock industries’export value in this area increases around 23.79%,and meat industry’s export value increases around 42.65%in this area.Besides,the 64“Belt and Road”countries’export value in China increases 4.16%for oil seed industry,8.45%for meat industry,11.15%for transportation equipment industry.Additionally,due to the slightly changed industrial structure caused by the cooperative tariffs,the export value of the 178rest countries of the world to China also increases for several industries.Like,their wheat industry’s export value to China increases around 0.21%,dairy product’s export value to China increases around 0.1%Based on our analyzed result,this research comes u two political advices.First,because since 2020 there are more than 20 countries claimed they will upgrade the restriction for agricultural products,and 12 of them are the“Belt and Road”initiative countries.So,China should cooperate more with the“Belt and Road”countries of agricultural products’tariffs in the future.Second,because of the tariffs cooperative industries are relatively concentrated,especially the huge risk exposed by the trade war between China and the U.S.since May of 2019,China should enforce cooperative tariffs in more industries.