The Impact of the Belt and Road Initiative on Regional Economic Disparities: Dual Effects of Infrastructure and Trade Openness

The objective of the Belt and Road Initiative (BRI) is to foster equitable global development, however, during the implementation process, the policy's economic growth effect is not uniform throughout all regions, which leads to the potential of increasing regional economic disparities. This paper adopts a literature review approach to elucidate the effects of the Belt and Road Initiative on regional economic disparities, focusing on infrastructure and trade considerations for policymakers. It will sort out the theoretical background of regional economic disparities and will examine the impact of infrastructure investment as well as trade openness on specific regional economic disparities. The study finds that infrastructure investment and trade openness mainly affect inter- and intra-regional economic disparities, respectively. Infrastructure investment benefits Southeast Asia and South Asia significantly more than Central Asia and Eastern Europe, and the eastern coast of China significantly more than the inland regions. Trade openness is more effective in converging income disparities within countries with lower levels of economic development, but it may exacerbate economic disparities within middle- and high-income countries. The paper concludes that although the Belt and Road Initiative has attained certain successes, there is still a risk that it will exacerbate regional economic disparities. The findings help policymakers to further optimize regional policies to achieve the initiative's goal of rebalancing the global economy.