China-Pakistan Economic Corridor and Its Social Implication on Pakistan: How Will CPEC Boost Pakistan’s Infrastructures and Overcome the Challenges?

Abstract

This paper discusses the China-Pakistan Economic Corridor (CPEC) long-term infrastructural project as a major part of the One Belt One Road (OBOR) the major global initiative by the Chinese government, scheduled to complete by 2030. CPEC is a joint project that Beijing and Islamabad agreed to finance through Chinese investments utilizing investment loans largely by Chinese financial institutions; nevertheless, Pakistan will also be responsible for investing approximately 15 billion dollars on its own in the process. While the project has been welcomed by Greater Eurasia (including Russia, Iran, and Central Asia) besides the United Kingdom and Western European countries, albeit vehement opposition by India. Paper elaborates upon the positive and negative elements that will likely impact the project progress, from internal political, economic dynamics of Pakistan and consequent security challenges to the related transit tariff issues, quality labor force supplies, just as well the inter-provincial competition between Baluchistan and KPK (Khyber Pukhtoon Khwa) besides the reaction of some South Asian countries, namely, India and Bangladesh. It highlights the opportunities, challenges and the impact that this mega project will likely have to the existing socioeconomic infrastructure, job opportunities, poverty level index, and regional peace and security.

China–Pakistan Economic Corridor (CPEC) development projects and entrepreneurial potential of locals

“…CPEC is the name of several infrastructures, economic development, industrial zones, and regional connectivity projects that are presently under construction throughout Pakistan (Ahmad & Hong, ). Past scholars and policymakers have demonstrated that the CPEC project decreases unemployment by generating millions of employment opportunities (Ali & Qazi, ; Chen et al, ), brings in new business and provides new investment opportunities (Raza, ; Wajeeh & Yang, ), provides opportunities for large‐scale business and small businesses (Rehman et al, ), and generates revenue for host communities (Raza et al, ).…”

“…Then after reaching the shores, the oil is transported to various provinces of China, which almost doubles the overall transportation cost, making it very expensive. The CPEC project will be the alternative fastest and safest route for Chinese businesses, which will reduce the distance from approximately 12,500 to CPEC is the name of several infrastructures, economic development, industrial zones, and regional connectivity projects that are presently under construction throughout Pakistan (Ahmad & Hong, 2017). Past scholars and policymakers have demonstrated that the CPEC project decreases unemployment by generating millions of employment opportunities (Ali & Qazi, 2018;Chen et al, 2018), brings in new business and provides new investment opportunities (Raza, 2018;Wajeeh & Yang, 2018), provides opportunities for large-scale business and small businesses (Rehman et al, 2018), and generates revenue for host communities .…”

The politics of the China―Pakistan economic corridor

“…They have opposed CPEC on the grounds that it will further strengthen the circle of exploitation emerging from the center-this time in collaboration with a foreign state (Ahmad and Hong, 2017;Mengal, 2016). The Baluch separatists and militants have shown their opposition to CPEC by carrying out various acts of sabotage such as, target killing and abduction of Chinese workers and blasts targeting CPEC project sites or infrastructure.…”

“…Provincial Assembly of Khyber Pakhtunkhwa (KPK) rejected prioritization of Eastern route and passed resolution opposing any route change, since the original route holds the promise of benefitting the underdeveloped areas of KPK (Mengal, 2016;Ahmad and Hong, 2017). Aftab Ahmed Sherpao, leader of the Qaumi Watan Party-the party that emerged as the fourth largest party in KPK in the 2013 General Electionsexpressed his concerns about the national outreach of CPEC in a parliamentary committee meeting held in October 2016 (Raza, 2016).…”

Highlighting the Dynamics of the Game-Changer: Empirical Evidence from Stock Markets of the Key Players

“…Through CPEC China will build a 3000 km network of ports, terminals, roads, railways and oil & gas pipelines extending its way from coastal area of Gwadar city to the historic city of Kashgar in northwestern China (Bader, 2015). Ahmad and Mi (2017) in their study investigated the impact of CPEC on infrastructural development within Pakistan. They found out that CPEC is indeed good news for the countries and it has positive impacts as far as the country's economic problems are concerned.…”