CHINA PAKISTAN ECONOMIC CORRIDDOR: ISSUES & CONFRONTATION

By: Siddhartha Singh

INTRODUCTION

The China–Pakistan Economic Corridor often referred to by the acronym CPEC, is a collection of projects currently under construction at a cost of $46 billion.

The corridor is considered to be an extension of China's ambitious One Belt, One Road initiative.

CPEC to China is reflected by its inclusion as part of China's 13th five year development plan.

INVESTMENT PROPOSALS

Chinese govt. will be investing $15 billion in energy projects like coal, gas , wind and solar.

$44 million of investment in optical fiber cable between china and Pakistan.

Gwadar port will be upgraded to allow the docking of larger ships.

China will grant Pakistan $230 million to construct a new international airport in Gwadar which is to be operational by December 2017.

ROADWAY PROJECT

3000 KM trade route which will provide direct access to Indian ocean.

It will start from Kashgar in china and will end at Gwadar port in Pakistan.

Chinese govt. want to have access of Indian ocean and for that they joined hands with Pakistan as India is not being supportive to them.

RAILWAY PROJECT

China is also investing in railway lines.Main line 1 connects from Karachi to

Peshawar and it will cost around$3.65 billion.

Main line 2 connects between Kotri in Sindh province and Attock in northern Punjab.

Main line 3 connects Bostan near Afghanistan to Kotla jam near city of Dera.

PIPELINE FOR LIQUIFIED NATURAL GAS

The Chinese government has announced its intention to build a $2.5 billion 711 km long liquid natural gas pipeline from Gwadar to Nawabshah in province as part of CPEC.

The Pakistani portion of the pipeline is to be constructed by the state owned China Petroleum Pipelines Bureau.

It will be 42 inches in diameter, and have the capacity to transport 1 billion cubic feet of liquefied natural gas every day.

ECONOMIC DEVELOPMENT in PAKISTAN

Opportunity for Pakistan to revive its industry.

More FDI in PakistanCPEC is a game changer project which will

lift millions of Pakistanis out of poverty and misery.

Functioning of Gwadar port will bring an economic revolution in Pakistan.

PAKISTAN’s BENEFIT

Infrastructure will improve through the investments from China.

The railways of Pakistan will get upgraded.

Different kinds of energy projects will be initiated and it will add an estimated1.5-2 percent to Pakistan’s GDP growth.

Pakistan will get 8 submarines from China through this deal.

• $46 Billion Chinese Investment

• 1.5 % additional GDP Growth

Direct Impact

• Rise in GDP Potential

• Incremental Private Sector Investment

Indirect Impact• Baseline 4-5 %• GDP Growth

rate rises above 6-7% in medium term

Overall Impact

Growth- related : Jobs created through improved services and lower costs to existing businesses (electricity supply, access to infrastructure)

Induced: Increased consumption through new job creation spurs employment in providers of goods and services

Indirect : Jobs created through backward and forward linkages in the supply chain

Direct: Jobs created directly in the energy and infrastructure sector

CHINA’S BENEFIT

China will get access through Gwadar port and will be able to expand its influence across central and south Asia.

Gwadar port will give direct access of Indian ocean to China.

After completion of the corridor, it will function as a primary gateway for trade between China and Africa and the middle East.

China also want to decline American influence in Pakistan.

Trade route- CPEC

Europe- Western ChinaDistance will be reduced by 50%Cost of transportation will be lowered by 50-65%Time cut by 50%

Middle East- Western ChinaDistance will be reduced by over 80%Cost of transportation will be lowered over 75%Time cut by over 85%

INDIAS OBJECTIONS

The CPEC will be passing through Pakistan Occupied Kashmir over which India has full legal rights.

Many acquisitions were made against RAW for disrupting various CPEC projects.

Indian trade in middle East and Europe is going to decrease because of Chinese presence at Gwadar port.

China will provide naval submarine and fighter planes to Pakistan.