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This paper investigates the linkages between real openness and service trade under the belt and road initiative. Three dimensions including competitiveness, growth rate of services export and proportion of emerging services are used to measure service trade. Covering the period of 1995-2016 and using vector-error correction (VEC) model and impulse response functions (GRIFS), we find that a general long-run equilibrium relationship among the service trade, the openness, the human capital and the import and export of the goods, as well as a short-run relationship. The results of this study indicate that real openness plays an important role in implementing the belt and road initiative. The competitiveness and growth rate of service trade in China are increasing while the emerging services has no improvement under the belt and road initiative.

Belt and Road Initiative in China: The Impact of Real Openness on Service Trade