The Belt and Road Initiative's Impact on Trade and Competition in Ports - Exploring the Effects of China’s Ambitious trade and Infrastructure plan on Global Port Operations

Abstract

The Belt and Road Initiative (BRI) was initiated by the Chinese government in 2013. It is a Foreign Direct Investment (FDI) on infrastructure projects with a reach across the entire world. Nations are eligible to participate in the initiative if they require and express a desire to obtain financial and/or manpower assistance for the development of infrastructure projects including ports, railroads, roads and power plants. A setback for a nation joining the initiative is that they will be indebted to China. The purpose of this study is to examine how the Belt and Road Initiative can affect the availability of free trade for a port as well as the level of competition between ports. The findings of this report indicate that the BRI cannot be classified as a standalone free trade agreement (FTA). Rather, it serves as an enabler for, and lay the groundworks for the establishment of new free trade agreements as well as to increase the value of and make better use of already existing FTAs. Furthermore, this report concludes that there is an increase of competition following the BRI. Further studies shows that ports who have joined the BRI will have a competitive advantage. Some important limitations of this report are that it only focuses on seaports and does not examine other types of infrastructure. Additionally, it mainly focuses on free trade opportunities and competition between ports, rather than any political aspects of the BRI. This report is conducted as a bachelor thesis for the International Logistics program at the Chalmers University of Technology.