China-Pakistan Economic Corridor and the Growth of Trade

The China-Pakistan Economic Corridor (CPEC) is a $62 billion connectivity project envisioned to stretch from the western Chinese city of Kashgar to Pakistan’s Arabian Sea port of Gwadar, located near Iran and Persian Gulf shipping lanes. It is a major component of Beijing's broader Belt and Road Initiative.
The economic development of countries is determined by their economic relationships with other countries including megaprojects like CPEC which interlink countries geographically, socially, and economically.
Nations do not survive and grow in isolation. Exchange between different countries plays a significant role in the financial enhancement of any nation. In the present-day world, trade comprises over 19.09 trillion US dollars (2018) where natural borders hold little more importance than transnational associations. In this sense, China’s USD 62 billion direct investment in different CPEC projects is widely seen as a substantial contribution to modernizing Pakistan’s regressive infrastructure. A prominent Chinese project named “Silk Road Economic Belt and the 21st-century Maritime Silk Road”, also known as the “Belt and Road Initiative” (BRI), is a visionary project of joining likely markets and accessing assets that will represent China’s interface across Eurasia. As one of the six land-based corridors of the Belt and Road Initiative (BRI), CPEC is seen to be a unique flagship project that is only in one nation; Pakistan. The China-Pakistan Economic Corridor is a significant part of BRI. It can be seen as the “symbol of a new era of connectedness and integration” for Pakistan, as it will not only transform the economic growth of the region but Pakistani people’s well-being. Acceptance of CPEC project is linked to perceived benefits, including business opportunities and regional growth. According to another research, authors noted that local people’s perspectives on quality of life, greater economic possibilities and poverty reduction have all altered as a result of CPEC projects. Alternative trade and energy channels as well as easy access to the Middle East, Africa and Europe are projected to benefit China. As a result, CPEC is a multifaceted project that; 1) provides China with the shortest access to the 21st Century Maritime Silk Road in the Indian Ocean 2) develops, connects and integrates regional economies and markets 3) secures Pakistan’s status as a vital BRI participant and 4) offers China with a secure economic corridor in the case of conflict in South China Sea.

The location of the land of Pakistan is very important and ideal with respect to economic, political and energy interests for the whole world China-Pakistan Economic Corridor (CPEC) is a distinct game-changer for both nations. The successful consummation of this project will boost the economy of Pakistan and will also make it one of the quickest developing economies in the local region as well as around the globe, which is one of the reasons Pakistan is taking an unmistakable interest in the convenient culmination of the task. CPEC, a significant trade route added to the Belt and Road Initiative (BRI), will be a trade and commerce channel that will not only connect Pakistan to China but will also open the door for a land course to the entire South Asian Regions. The project will also create an infinite number of “economic opportunities” and will “host other positive externalities” (Pakistan Observer, 2018). Pakistan can get benefits from this new trade route especially by paying attention to “trade-opportunities” and their enhancement between Pakistan and China. Pakistan, due to its pivotal position on the world map, provides a transportation route for trade between non-coastal courtiers, Central Asian states, Afghanistan and the global market through the Arabian Sea (Anwar, 2011). The extension and the advancement of the Gwadar exceptional monetary zone under the (B&R) initiative play a significant role in CPEC highlighted ventures. Once the Gwadar port is established completely, it is estimated that Pakistan will become a trade center for the surrounding countries due to its “duty-free economic zone” (Bhutta, 2015). Pakistan will have a phenomenal increase in its trade with China and other countries, not because of the two-sided aspects of CPEC but due to the local dimensions of this project (Iftikhar, 2016). Southeast Asia is regarded as the world’s most isolated area and CPEC roject offers Pakistan a significant opportunity to strengthen its ties with other Southeast Asian countries as well as the rest of the world.

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