CPEC: Pakistan-China Cordial Ties - A Boost to Pakistan's Economy

Abstract

This paper highlights the need of energy production in Pakistan and to determine the extent to which China Pakistan Economic Corridor (CPEC) and its energy projects will contribute to the economic growth and development of Pakistan. In this regard, a fair amount of literature has been reviewed. The literature review presented confirms that a positive relationship exists between the energy production, security and economic development. The long term friendship of Pakistan and China is discussed and how this tie has benefitted both the countries. Chinese cooperation and assistance with Pakistan is well evident from the substantial Chinese investment in Pakistan's infrastructural expansion particularly development of Pakistan's deep-water port at Gwadar. Under its One Belt One Road plan, China and Pakistan have collaboratively started a multibillion mega project, China Pakistan Economic Corridor. Under CPEC twenty-one energy projects being established, that is supposed to reduce the energy poverty generation in Pakistan. The study finds out that the sufficiency in energy sector will boost economy by energizing the industry and businesses as well as by creating thousands of direct and indirect employment opportunities.

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, ).…”

“…First, energy crisis is among the major problems of Pakistan, which reduces the business opportunities for local and foreign investors (Ali, Rasheed, Muhammad, & Yousaf, ). Pakistan is facing a shortage of electricity since the last decade, and due to power outages and blackouts that frequently occur, businesses suffer heavily (Raza et al, ). To overcome the electricity problem, the energy projects play a vital importance in the CPEC projects.…”

“…Energy projects will solve the power outages and blackout problems of the country, increase the economic activities, and attract foreign investment (Shaikh, Ji, & Fan, ). Several scholars highlighted the benefits of CPEC for Pakistan and China (Ali et al, ; Kanwal, Chong, & Pitafi, ; Raza, Mohiuddin, Zaidi, & Osama, ). Specifically, Ali et al () discussed the local community benefits related to CPEC in terms of education, income, and employment opportunities.…”

“…Kanwal et al () investigated the local community support towards the development of the CPEC project and found that local community support is associated with the benefits. Raza et al () highlighted the economic benefits of Pakistan with the development of the CPEC projects. Past theoretical work is related to CPEC based on employment opportunities, business, energy crises, and development of Gwadar port and security issues in Pakistan (Kanwal et al, ; Raza et al, ; Wang, ).…”

“…Raza et al () highlighted the economic benefits of Pakistan with the development of the CPEC projects. Past theoretical work is related to CPEC based on employment opportunities, business, energy crises, and development of Gwadar port and security issues in Pakistan (Kanwal et al, ; Raza et al, ; Wang, ). Despite several research studies related to CPEC, local Pakistani entrepreneur's attitude and intention towards CPEC has not been examined.…”