Does the Belt and Road Initiative promote industrial upgrading and rationalisation and adjustment along the route?

Abstract

This study uses data from 30 provinces and cities from 2010-2019 to examine the role of the Belt and Road Initiative (BRI) on industrial restructuring and upgrading in Chinese provinces and cities along the route using the Difference-in-differences method. The results found that participation in BRI construction is mainly under favorable policies to ensure that the tertiary sector can be strongly supported for development by stabilizing the macroeconomic situation, improving infrastructure construction, attracting surplus labor to the tertiary sector and strengthening technological innovation. BRI makes the industries tend to be advanced, and the key provinces develop tertiary industries and high-end manufacturing industries when participating in BRI construction and development, take advantage of policies to strengthen foreign trade through various ways, accelerate high-quality development of service industries, and achieve innovation and upgrading. At the same time, BRI can promote the rationalisation of industrial structure, which as an inverse indicator, the initiative makes a significant reduction and promotes the industrial structure to be more in line with the local economic development. The findings of the study provide theoretical support for China's future comprehensive deepening reforms.