Trade fear behind the image of the Belt and Road Initiative: A Big Data Analysis
Alicia Garcia-Herrero
BRUEGEL and HKUST
1Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong
Jianwei Xu
Beijing Normal University
With contribution from Hanrui Li
1. Motivation and objective
2. Data and methodology
3. Results
4. Conclusions
Content
Bukit Merah, SingaporeTrade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 2
1. Motivation and objective
Bukit Merah, SingaporeTrade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 3
Background
• In 2013, China embarked on its grand project of the Belt and RoadInitiative (BRI) to promote infrastructure connectivity in the Eurasianarea. In fact, the Belt and Road Initiatives have been officiallysupported by sixty-six countries (as of May 2018).
• With the massive financing that China is bringing to Belt and Roadcountries to build infrastructure, the recipients should, in principle,view China’s grand plan very positively. However, there is no systemicevidence of how this project fears among recipient countries and,more generally, globally.
• Given the above pros and cons of the BRI, it seems important to offera quantitative assessment of the image of BRI across the globe, bothfor countries which make part of the Initiative but also for others.
• Finally, we investigate empirically what may be the key reasons forsuch perception at the country level
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 4
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 5
China 2013 2014 2015 2016 2017 2018
A dynamic view of the Belt and Road
Source: www.gdelt.org & CARTO
Our country classification
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 6
BRI countryNon-BRI
country
Narrow BRI countryBroad BRI
country
East Asia &
PacificCentral Asia South Asia
Europe Latin America
and the
Caribbean
Middle East
& North
Africa
Sub-Saharan
AfricaEU Non-EU
Brunei
Cambodia
Indonesia
Korea
Laos
Malaysia
Mongolia
Myanmar
New Zealand
Niue
Papua New
Guinea
Philippines
Singapore
Thailand
Timor-Leste
Vietnam
Kazakhstan
Kyrgyzstan
Tajikistan
Uzbekistan
Afghanistan
Bangladesh
Maldives
Nepal
Pakistan
Sri Lanka
Austria
Bulgaria
Croatia
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovak
Republic
Slovenia
Albania
Armenia
Azerbaijan
Belarus
Bosnia and
Herzegovina
Georgia
Macedonia
Moldova
Montenegro
Russia
Serbia
Turkey
Ukraine
Antigua and
Barbuda
Bolivia
Guyana
Panama
Trinidad and
Tobago
Egypt
Iran
Israel
Jordan
Kuwait
Lebanon
Morocco
Oman
Qatar
Saudi Arabia
Syria
United Arab
Emirates
Tunisia
Ethiopia
Kenya
Madagascar
South Africa
Senegal
Rwanda
Bahrain
Bhutan
India
Iraq
Turkmenistan
Yemen
Belgium
Cyprus
Canada
Denmark
Finland
France
Germany
Greece
Japan
Malta
Ireland
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United
Kingdom
United States
Objective of the project
• Quantitatively assess the global perception of the Belt and Road Initiative.
• Identify the key factor explaining each country’s image of the Initiative and the direction in which the frequency in which these topics are discussed in the news affect the image of BRI in different countries.
• More specifically, the perception can be further captured by answering two questions:
– How well received it is?
– What is the key factor/s behind such image?
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 7
2. Data and methodology
Bukit Merah, SingaporeTrade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 8
Source of big data
Our big data source is Global Database of Events, Language, and Tone (GDELT)
• Content coverage: Print, broadcast, and web news media in over 100 languages
• Time span: Jan 1, 1979 to present; Update every 15 minutes
• Identification of tone: Built-in tonal dictionary
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 9
The GDELT
Project
GDELT +
BigQuery
Event
Database
1.0 Event
Database
2.0 Event
Database
Global
Knowledge
Graph (GKG)
2.0 Global
Knowledge
Graph
Visual Global
Knowledge
Graph
Others
GDELT
Summary (API)
Global
Online News
Coverage
Television
News
Two approaches to GDELT
GDELT GDELT Summary
Chosen keyword(s)
Key words are restricted within the built-in dictionary for institutions and/or events
For the project, only “One Belt and One Road” is available
No restriction on the choice of key words for search
Content coverage Print, broadcast and online news Online news
Time coverage Jan 1, 1979 to presentThe past 355 days before the date of
search
Extraction method SQL in Google BigQueryApplication Programming Interface
(API)
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 10
Table 1 Comparison between two data pools
Our choice sinceconcept not in GDELTdictionary and alsorecent enough to usesummary
We look for several definitions relating to Belt and Road
• One Belt, One Road
– “China’s ‘one belt, one road’ initiative has been much talked about for thepast two years, …”, SCMP Editorial, South China Morning Post, April 02, 2015
• The Belt and Road Initiative
– “In concrete terms, the Belt and Road initiative is an immensely ambitiousdevelopment campaign, …” – Tom Phillips, The Guardian, May 12, 2017
• New Silk Road
– “If the new Silk Road is symbolized by images of stasis – police checkpoints,long lines of trucks and barbed wire – there won’t be much to remember.” –Jonathan Hillman, The Washington Post, February 14, 2018
11Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong
Which media to focus on
• We use public media as the best channel to reflect the mainstream public opinion.
– Beyond official or elites’ opinions
– Exclude extreme opinions
• Why we exclude social media?
– Avoid noisy and volatile opinions
– Avoid fake news
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 12
Construction of the key sentiment measurement
13Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong
• Tone: as proxy for the image of BRI
• Step 1: calculate the tone of a specific article c in country j
𝑇𝑗,𝑐 =𝑤𝑗𝑝𝑐 −𝑤𝑗𝑛𝑐
𝑤𝑗𝑐
• Step 2: calculate the general tone in a country
wjpc: the number of words with positive sentiment in article c of country jwjnc: the number of words with negative sentiment in article c of country jwjc: the total number of words in article c of country j
𝑇 =1
𝑁𝑐
𝑗
𝑇𝑗,𝑐
3. Results
Bukit Merah, SingaporeTrade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 14
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 15
BRI generally perceived positively
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0
2
4
6
8
10
12
-5.1
7
-4.7
0
-4.2
2
-3.7
5
-3.2
7
-2.8
0
-2.3
3
-1.8
5
-1.3
8
-0.9
1
-0.4
3
0.0
4
0.5
2
0.9
9
1.4
6
1.9
4
2.4
1
2.8
8
3.3
6
3.8
3
4.3
1
4.7
8
5.2
5
5.7
3
6.2
0
Figure 1 The normal distribution of the 130 countries'
sentiment towards the Belt and Road Initiative
Figure 1 reports the summary statistics for our measurement ofthe sentiments across countries, indicating that the Initiative ison average positively received by the world.
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 16
BRI perceived similarly among BRI and non BRI countries
In Figure 2, we further compare the tones between BRI countriesand Non-BRI countries. Interestingly, the Belt and Road seemsonly slightly less positive for countries within the Belt and Roadgeographies than the outsiders, but the difference is statisticallyinsignificant.
-4 -3 -2 -1 0 1 2 3 4 5 6
Figure 2 Tone of BRI in BRI country and non-BRI country
BRI country
Non-BRI country
Maldives
Bosnia and Herzegovina
Poland
Laos
Guyana Norway
Liberia
Netherlands
Botswana
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 17
Africa has the best image while South Asia the worst
-0.5
0
0.5
1
1.5
2
Central Asia Sub-Saharan
Africa
East Asia &
Pacific
Middle East and
North Africa
Europe(the EU) Europe(the
Non-EU)
North America Latin America
and the
Caribbean
South Asia
Figure 3 Regional comparison of media sentiment on BRI
Media sentiment World average
South Asia fears worst in terms oftheir image of the BRI while Africafears best. Central Asia and Sub-Saharan Africa showed the mostpositive perception of the Belt andRoad, reflecting China’s long-termrelationship with the region evenbefore the establishment of the Beltand Road.
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 18
At country level
In fact, nearly all Central Asian countries show very positive attitudestowards the Initiative. East Asia & Pacific show generally strong supportof the BRI. In Europe, the EU countries seem more positive about theBelt and Road than the non-EU European countries. The South Asiancountries take a negative attitude against the Chinese plan.
Figure 4 Distribution of sentiment within 130 countries and regions
4-2 620-4
Negative Positive
Central Asia
Sub-Saharan Africa
East Asia & Pacific
Middle East &
North Africa
Europe (EU)
Europe (Non-EU)
North America
Latin America
& Caribbean
South Asia
UzbekistanTajikistan
BotswanaTanzaniaZimbabweSouth Africa
Australia Thailand Vietnam Laos
Iraq Syria Yemen Jordan
Sweden Finland Portugal Netherland
Bosnia and Herzegovina Ukraine Turkey Belarus
Canada US
Guyana Venezuela Jamaica
Maldives Bhutan Pakistan Afghanistan
Poland
Vanuatu
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 19
Regional ComparisonSoutheast Asia
Top Positive Tone
Laos 3.01
Top Negative Tone
Philippines 0.22
0
1
2
3
4
Laos Indonesia Viet Nam Brunei Cambodia Myanmar Singapore Thailand Malaysia Philippines
Tone
Average Line
Note:
Tone for BRI country
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 20
Regional ComparisonEurope
Top Positive Tone
Netherlands 3.12
Top Negative Tone
Bosnia and Herzegovina -2.43
-2.8
-1.8
-0.8
0.2
1.2
2.2
3.2
Ne
the
rlan
ds
Po
rtu
gal
Uzb
eki
stan
Slo
ven
ia
Kyr
gyzs
tan
Be
laru
s
Cyp
rus
Kaz
akh
stan
Ital
y
Ge
org
ia
Cro
atia
Alb
ania
Luxe
mb
ou
rg
Fran
ce
Gre
ece
Serb
ia
Tajik
ista
n
Lith
uan
ia
Aze
rbai
jan
Fin
lan
d
Mac
edo
nia
Arm
en
ia
Slo
vaki
a
Spai
n
Un
ite
d K
ingd
om
Turk
ey
Au
stri
a
Latv
ia
Ge
rman
y
Esto
nia
Bu
lgar
ia
Swed
en
Hu
nga
ry
Swit
zerl
and
Mo
nte
neg
ro
Ro
man
ia
De
nm
ark
Ru
ssia
Mo
ldo
va
Irel
and
Cze
ch R
ep
ub
lic
Be
lgiu
m
Ukr
ain
e
No
rway
Po
lan
d
B&
H
Tone
EU&BRI Non-EU&BRI EU&Non-BRI Non-EU&Non-BRI Average Line (Europe & Central Asia)
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 21
Regional ComparisonMiddle East
Top Positive Tone
Jordan 2.47
Top Negative Tone
Iraq -1.19
-2
-1
0
1
2
3
Jord
an
Yem
en
UA
E
Egyp
t
Bah
rain
Leb
ano
n
Syri
a
Isra
el
Sau
di A
rab
ia
Iran
Qat
ar
Om
an
Ku
wai
t
Iraq
Tone
Average Line
Note:
Tone for BRI country
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 22
Regional ComparisonAfrica
Top Positive Tone
Botswana 4.97
Top Negative Tone
South Africa -0.16
-1
0
1
2
3
4
5
6
Bo
tsw
ana
Lib
eria
Tan
zan
ia
Ch
ad
Zam
bia
Eth
iop
ia
Rw
and
a
Mal
awi
Nig
eria
Zim
bab
we
Gh
ana
Som
alia
Cam
ero
on
Mau
riti
us
Mad
agas
car
Ken
ya
Sen
ega
l
Alg
eria
Uga
nd
a
Sou
th A
fric
a
Tone
Average Line
Note:
Tone for BRI country
Tone for non-BRI country
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 23
Regional ComparisonCentral and South America
Top Positive Tone
Brazil 1.26
Top Negative Tone
Guyana -2.26
-2.50
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50Tone
Average Line
Note:
Tone for BRI country
Tone for non-BRI country
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 24
Image of the BRI at country level
Difference in the BRI image are very large and sometimes unexpected.Both extremes are broadly based in Europe and Asia, which meansChina’s Belt and Road Initiative has particularly penetrated the tworegions but received much-divided opinions within them. Theimplementation of the Belt and Road Initiative seems to be heavilyinfluenced by the local characteristics.
0
1
2
3
4
5
6
Bo
tsw
an
a
Ne
the
rla
nd
s
Lib
eri
a
Ta
nza
nia
La
os
Mo
rocc
o
Jord
an
Po
rtu
ga
l
Ch
ad
Za
mb
ia
Figure 5 Media sentiment for the
most positive countries
Tone(BRI countries) Tone(Non-BRI countries)
-3
-2.5
-2
-1.5
-1
-0.5
0
Ma
ldiv
es
Bo
snia
an
d
He
rze
go
vin
a
Gu
ya
na
Po
lan
d
No
rwa
y
Ira
q
Ku
wa
it
Bh
uta
n
Ind
ia
Ec
ua
do
r
Figure 6 Media sentiment for the
most negative countries
Tone(BRI countries) Tone(Non-BRI countries)
Source: https://www.gdeltproject.org/
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 25
Empirical analysis: Descriptive statistic to chose key factors
To investigate the relationship between the image of the BRI andthe factors that may affect such image, we select the countrieswith the highest and lowest sentiment towards the BRI in eachregion. Within the selected sample, we found most of the BRI-related articles contain two keywords: trade and investment.
Source: https://www.gdeltproject.org/
Keywords Tone Proportion (%)‘trade’ only in BRI-related news 0.58 22.9
‘investment’ only in BRI-related news 0.57 11.3Both ‘trade’ and ‘investment’ in BRI-related news 0.88 40.2
Others and BRI 0.27 25.6BRI (Total) 0.58 100
Table 1 Descriptive statistic of the tone and proportion of trade, investment, and other topics
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 26
Empirical analysis: Modeling
To assess how the readings of ‘trade’ and ‘investment’ affect thecountries’ perception of the BRI, we use the following econometricmodel to analyze their influences.
0 1 2 3i i i i iTone BRI Trade Investment = + + + +
• Tonei is the sentiment of the BRI in country i, in other words, theimage of the BRI in country i.
• BRIi is a dummy variable with its value is set to 1 if country i is inthe BRI geographies and 0 if not. To maintain consistency with thecoverage of the sentiment variable, we define the BRI countriesusing its official status (classified by China’s official Belt and Roadwebsite) until April 25th, 2018.
• Tradei represents the proportion of the BRI-related newsmentioning the word ‘trade’ to all the BRI-related news, depictingthe influence of trade in the local media reporting the BRI.
• Investmenti represents the proportion of the BRI-related newsmentioning ‘investment’ to the total BRI-related news.
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 27
Empirical analysis: Results
• First, here is no statistical difference between the BRI and non-BRIcountries as regards their perception of the Belt and Road.
• Second, the key factor explaining the differences in the perceptionof BRI in our sample is trade and, more especially, how frequentlytrade is mentioned in the media relating to BRI. The morefrequently trade is mentioned in the media (trade intensity), theworse perception a country tends to have about BRI.
• Third, while the coefficient before the investment is also negative, itis not statistically significant for all the specifications.
Independent variable BRI only Trade only Investment only All controls
BRI-0.117(0.20)
-0.249(0.20)
Trade (%)-0.019(0.01)
-0.030*(0.01)
Investment (%)-0.004(0.02)
-0.016(0.01)
R2 0.0025 0.0305 0.0009 0.08Obs 130 118 113 107
p<0.001: ***; p<0.01: **; p<0.05: *; p< 0.1: ^
Table 2 Robust OLS regression result
4. Conclusions
Bukit Merah, SingaporeTrade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 28
Based our bigdata analysis of news across the globe, we concludethat:
• The key finding is that most regions in the world are holding a positiveview on China’s Belt and Road Initiative, although wide differencesappear across regions and countries and some do have a negativeimage of BRI.
• Second, there is no significant difference in the perception of the BRIbetween the countries who are officially part of the initiative and others.
• Third, ‘Trade’ is the key factor explaining the BRI image across countries.Investment seems to be less relevant as it is not found statisticallysignificant.
• Fourth, zooming in into one country, Sri Lanka, it seems that bothawareness as well as the tone can vary quite substantially over timefollowing events/relations with China.
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 29
Key take-aways
• Time extension, using big query but problem with the definitionof Belt and Road
• More focus on particular countries
• Extend the realm from BRI to China economic relations with eachcountry or region
• Check to what extent fears relate to trade are grounded onactual data on trade, such as a growing trade deficit with Chinaor the like.
Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong 30
Possible extensions
Comments welcome!
Prof Alicia Garcia-Herrero
31Trade and Investment under ‘One Belt One Road’ and Implications for Hong Kong
Jianwei Xu
With contribution from Hanrui Li