Unveiling the potential of China-Pakistan Trade Corridor: A Win-Win Synergy
North is not only hypothetically considered the affluent and prosperous side of the world but in reality that zone truly holds the gigantic opportunities and prospects of rapid development. And for Pakistan, it is no less than a blessing to have a neighbor like China on the northern side. Although China may not be gratifying the definition of being considered as a country of ‘North’ yet its dramatic rise and transformation in past few decades make China well beyond some wealthy nations of the North. For this reason Pakistan must consider China a state that has enormous likelihood to become the top country of the planet, by every mean, and to which Pakistan should continue the historic affair of cordial relationship.
Since the introduction of globalization in bilateral and multilateral trade, it has become very much detectable that states with lower or higher economic digits have to stick to the regulations set by World Trade Organization (WTO) and transformed globalized patterns. China implementing the liberal market trends in late 1980s has now turned into the world’s second best economy in terms of GDP and has surpassed giants like Japan and Germany in recent past. While on the other hand Pakistan, despite undergoing the substantial boom (temporary) of economy during first half of 2000s, has been unable to cope with challenges of international trade arrangements. The country has gone into further dismal and faced some unprecedented challenges including the sharp decline in Foreign Direct Investment (FDI) and capital inflow in last few years. Resultantly, the current state of economy is also displaying feeble digits and the micro, macro-economic policies didn’t repay as per projections.
In these bizarre settings, it is again China that came to rescue us and initiated several small and mega projects which could result not only in the retrieval of economic loss but can also bequeath progressive impacts for Pakistan. Out of them $ 20 billion worth China-Pakistan Economic Corridor (CPEC) project probably grasps the most significance because it will connect the Asian giant (China) with South Asian country (Pakistan), whose proximity to Middle East and Arabian Sea is exclusively vital. The proposed 2700km extensive corridor will consist of motorways, airports, highways and energy pipelines and is expected to be completed by 2018. Other than Chinese financing and material support, Pakistani government has also allocated 73 billion initially for the year 2014-15. Pakistan has been highlighting the importance, viability and utility of this project since 2002 however, China had its own priorities and policies designed in accordance with regional and global scenarios. But last year, soon after assuming office, Prime Minister Nawaz Sharif’s visited China that resulted in the signing of CPEC officially. Mr. Sharif’s recent visit also endorsed the blueprint of CPEC.
Although China is entitled as the all-weather friend of Pakistan and there are innumerable instances when China opened arms for salvaging economically and militarily but one must not forget that if WTO has liberalized the markets, it has also altered the approaches of almost every state. China may well be supporting CPEC in a bid to help shape Pakistani economy but calculations show that the project will assist Beijing more than of Pakistan. Currently China’s Middle East and Gulf States trade is reliant upon long sea route that consists of more than 5000 miles while the erection of CPEC would reduce that distance to merely 1488 miles which means that China would have ample reduction in budgets it consumes for trade with Middle Eastern region. Moreover, China’s exports to Pakistan, which currently stand at $ 9.2 billion, will witness a sharp upheave after the completion of this project.
CPEC is a win-win situation for both the neighboring states. On the one hand, China is major beneficiary of this project but it will also enable Pakistan to boost its trade with China and Middle East too. Pakistan is energy deficient country whereas China needed continuous supply of oil and thus CPEC will provide both the opportunity to get energy, utilizing CPEC, expeditiously and at lower cost. After the signing of Free Trade Agreement (FTA) in 2004, both China and Pakistan saw considerable increase in the bilateral trade and once the CPEC will be accomplished, Islamabad and Beijing can share their experiences more vigorously than before. The project will become a solid reason to enlarge capacity, exposure and livelihood of the cities contiguous to CPEC and thus can add up in the GDP of the corresponding states.
Nevertheless, as striking as this project looks generally for both the countries, there would be a bunch of challenges that require urgent countering strategies. The necessity to tackle pathetic law and order situation, specifically in Pakistan, is of critical importance. Political uncertainties and short term economic policies by Pakistani policymakers are the hindercanes that need to be addressed shortly. Without a stable and foreseeable atmosphere, it is imaginable any exogenous shock may cause investors to extract of the country. Only a thoughtful and profound maneuver of existing government can make “The Pak-China corridor [will be a] game changer in the region”, as was said by Nawaz Sharif.
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