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1. Introduction
The Belt and Road Initiative (BRI) is a strategy proposed by China for infrastructure development and investment in 65 countries in Europe, Asia, and Africa (Chin and He, 2016), where 30% of world GDP is produced by 64% of the world's population (Huang, 2016). Unbalanced economic and population growth implies that agriculture plays an important role in maintaining the national economies of these BR countries, including the livelihoods of farmers. In China, agricultural output has grown rapidly since the 1980s. However, agricultural production still faces the challenge of high costs and low benefits for various reasons such as limited resources and diminishing marginal efficiency of fertilizer use. In particular, there is potential for agriculture in these countries to benefit from moving up the global value chains (GVCs) to receive a higher share of value added (VA) (Zhang and Tang, 2018). Hence, the present study will examine whether and to what extent the share of the GVCs of the agricultural products of China and these BR countries could increase if trade barriers among them were reduced in the spirit of the BRI.
Generally, developed countries stay at higher positions in GVCs and obtain higher VA (Tang and Zhang, 2009). In contrast, developing countries including China and most BR countries stay at lower positions in GVCs and obtain lower VA. The BRI, unveiled in 2013, may have improved the positions of China and the BR countries in GVCs. The trade in agricultural products among these countries has increased considerably over time. In 1998, China exported agricultural products valued at only USD 2.606 billion to the BR countries. By 2017, the exports had increased to USD 22.683 billion, nearly 10 times the export volume of 20 years earlier. To explore the potential development opportunities for trade between China and the BR countries, we assume that the BRI impacts can be mimicked by reduction in trade barriers, including both non-tariff barriers (NTB) and tariff barriers (TB), where the reduced NTB captures a potential reduction in trade costs induced by the BRI, and the reduced NB captures the features of an agreement similar to a Free Trade Agreement (FTA), which the BRI countries are expected to enter in the long term (State Council, 2015). We estimate the potential...