China- Pakistan Economic Corridor (CPEC), Its Impacts On Pakistan Economy

The 3,000 km-long china Pakistan economic corridor (CPEC) consisting of highways, railways and pipelines is the latest irritant in the India-china relationship. The corridor connects china’s landlocked western province of Xinjiang to Gwadar port in south Pakistan. According to Pakistan Economic Survey 2014-15, the volume of trade between Pakistan and China has increased to $16 billion. China’s exports to Pakistan increased by ten percent during the five years from 2009-10 to 2014-15. As a result, China’s share in Pakistan’s total exports has gradually picked up from four percent in 2009-10 to nine percent during the fiscal year 201415.The most recent milestone achieved in this bilateral relationship is the signing of Memorandum of Understanding on the construction of China-Pakistan Economic Corridor (CPEC). CPEC is a 3,218 kilometer long route, to be built over next several years, consisting of highways, railways and pipelines. The actual estimated cost of the project is expected to be US $75 billion, out of which US $45 billion plus will ensure that the corridor becomes operational by 2020. The remaining investment will be spent on energy generation and infrastructure development. The much advertised US $45 billion China-Pakistan Economic Corridor will pass through the beautiful Gilgit-Baltistan province in the north which will connect Kashgar in China’s western province Xinjiang to rest of the world through Chinese-operated Gwadar port in the country's south. This mega project is expected to take the bilateral relationship between Pakistan and China to new heights; it’s a beginning of a journey which hopes to transform the economy and help bridge Pakistan’s power shortfall. The CPEC project has been divided into phases, the first phase being the completion of Gwadar International Airport and major developments of Gwadar Port. This phase is expected to be completed by the year 2017. The project also includes the expansion of Karakoram Highwaythe road that connects China with Pakistan and placement of fiber-optic line ensuring better communication between the two countries. It is estimated that if all the planned projects are implemented, the value of those projects would exceed all foreign direct Abstract: China is opening up its land borders in Xinjiang to interact more freely with central Asia and Europe. China and Pakistan are jointly building the chinaPakistan Economic Corridor (CPEC), with passes through Pakistanoccupied Kashmir. India views this is as violation of its sovereignty. Geopolitics rather than geo-economics predominates India’s thinking on possibilities offered by the revival of the old Silk Road by the Chinese. The CPEC project has been divided into phases, the first phase being the completion of Gwadar International Airport and major developments of Gwadar Port. This phase is expected to be completed by the year 2017. The project also includes the expansion of Karakoram Highwaythe road that connects China with Pakistan and placement of fiber-optic line ensuring better communication between the two countries. This paper analyses the steps that should be taken to favour this scenario and warns about the consequences of poorly-managed implementation of the CPEC such as aggravating divisions within Pakistan and heightening tensions between Islamabad and other regional players. This paper will also look into the prospective implications of the CPEC on development of Pakistan and other neighboring countries.