Does the Belt and Road Initiative Reshape Imported Financial Risk? Evidence From China

Against the backdrop of increasingly interconnected global financial markets and China's continued pursuit of high‐level opening‐up, effectively preventing imported financial risk while expanding openness has become an important issue in balancing development and security. Using data on Chinese listed firms from 2010 to 2024, this paper constructs firm‐level measures of imported financial risk based on extreme value theory and examines changes in firms' imported financial risk following the implementation of the BRI. Our findings show that following the implementation of the BRI, firms with pre‐existing exposure to BRI countries experience a significantly larger decline in imported financial risk relative to other firms. Channel analyses provide evidence consistent with exchange rate risk exposure, overseas geographical diversification, and operational resilience serving as potential channels associated with this decline in imported financial risk. Further analysis reveals a ‘double‐edged sword’ pattern across different sources of risk: firms with pre‐existing exposure to BRI countries exhibit lower imported financial risk from developed markets but stronger financial risk linkages with emerging markets in the post‐BRI period. This suggests that although market diversification is associated with lower dependence on risk from traditional developed markets, deeper integration into BRI emerging markets is associated with greater exposure to financial fluctuations in these markets. This paper provides firm‐level evidence on the relationship between opening‐up and financial security and offers important insights for policymakers and enterprises seeking to balance development and security in the process of opening‐up.