ASSIGNMENT OF THE PAKSTUDY

SUBMITTED TO
DR.GOHAR ALI
SUBMITTED BY HAZRAT ALI
ROLL NUMBER 60(MORNING)
SEMESTER SECOND
BATCH NO 21
SUBMITTED DATE June 4, 2019
DEPARTMENT BS(COMPUTER SCIENCE)

UNIVERSITY OF PESHAWAR
 China-Pakistan Economic Corridor (CPEC)
Introduction to cepc:-
This is massive bilateral project to
improve infrastructure within Pakistan for better trade with China and
to further integrate the countries of the region. The project was
launched on April 20, 2015 when Chinese President Xi Jinping and
Pakistani Prime Minister Nawaz Sharif signed 51 agreements and
Memorandums of Understanding valued at $46 billion.
Goals of cepc:-

The goal of CPEC is both to transform Pakistan’s economy—by

modernizing its road, rail, air, and energy transportation systems—and
to connect the deep-sea Pakistani ports of Gwadar and Karachi to
China’s Xinjiang province and beyond by overland routes. This would
reduce the time and cost of transporting goods and energy such
as natural gas to China by circumventing the Straits of Malacca and
the South China Sea.
The announcement of joint space and satellite initiatives between
Pakistan and China, spurred by CPEC, followed in 2016. CPEC is part
of the larger Belt and Road Initiative—to improve connectivity, trade,
communication, and cooperation between the countries of Eurasia—
announced by China in 2013. CPEC has been compared to
the Marshall Plan for the rebuilding of post-World War II Europe in its
potential impact on the region, and numerous countries have shown
interest in participating in the initiative. China Pakistan Economic
Corridor (CPEC) is the first and foremost implementation of China’s
great vision about revival of ancient Silk Route, known as One Belt
One Road (OBOR) or Belt and Road Initiative (BRI). This corridor will
connect China to Indian Ocean through Pakistan’s Gwadar Port
situated in its province Baluchistan and consists of two major routes
known as western and eastern route.
Upon completion of BRI first phase, i.e. CPEC, along with
strengthening China’s outreach to Central Asian Republics, Middle
East and Africa without fearing its geo political situation at South
China Sea, it will also save time and cost related to transportation
which is considered a major cost for doing business in the age of
digitalizing globalization. Other parts of the world fear Silk Route as a
New World Order challenging the sole super power USA and its allies.
Therefore, regional conflicts and conspiracies are on its rise focusing
Pakistan specially for being an integral part of BRI through Corridor
Project (CPEC).
Cost and completion:-

CPEC is a 15-year plan, to be completed in three phases, with initial

cost estimated to $46 billion, which is believed to increase with
addition of new sub projects mostly related to infrastructure. Each
phase of this project is a 5-year plan with a dead line of completion till
2030.The first phase to construct connecting roads via western route
is almost completed followed by the development of Gwadar Port. It is
worth mentioning here that the projects related to CPEC are mostly
based on focus on infrastructure i.e; developing roads, railway tracks,
airports, oil gas gas pipeline. In addition to this, special attention is
being paid to producing adequate amount of electricity and special
economic zones where China will be able to build gactories in
collaboration with the local industries. However, in future it is predicted
that Pakistan will become a business hub not only for China but also
the countries connecting to OBOR. On the other hand rising trade
deficit is reflecting Pakistan’s inability towards increasing its shares of
exports with the rest of the world that is extremely alarming while
entering into Silk Route World Order, starting from Pakistan. Yet a
stable, effective and long term economic strategy can bring Pakistan
back in to business by using this CPEC project and benefit from it to
the fullest.
China Pakistan Economic Corridor (CPEC) could be a game changer
project if previous government would have negotiated it on the
discussion table well before its final execution. The great plan is still
unclear to general public and therefore speculations are at its peak.
The newly established government should immediately focus on
CPEC projects and publish its impacts over Pakistan Economy
whether it may be positive or negative. One of the major negative
impacts is trade imbalance.
Through next FTA Pakistan should negotiate with China to import its
agriculture products which can result in earning up to $12billion as
China imports Food amounting to $ 120 billion out which a 10pc can
be our share. Moreover, Iran also imports food amounting to $65
billion where food products can be exported to this US threatened
country by bartering it with oil as payment, if allowed. In this regard
government needs to facilitate and educate farmers for high yield
cultivation techniques including drop irrigation for better utilization of
already available limited water resources. Improved seeds,
adulterated pesticides and fertilizers bear much importance and
shouldn’t be neglected. Further to improve yields next step is storage
and transportation of these perishable nature products and for that
particular purpose government should encourage local transporters by
providing them soft loans for upgrading (BMR/CAPEX) their vehicles
including cold storage and warehouse available on rent alongside the
corridor through Gwadar to the nodes connecting China.
Foreign policy and cepc:-

Foreign policy is always based on the principle of self-interest whether

this is economical, political, security or even a promotion of ideals and
beliefs. The USA was never a physical colonial power but has used its
military might and control of the world’s financial system to leverage its
foreign policy objectives. It has had a stop start relationship with
Pakistan and one very much short term oriented and reactive to geo-
political events. Since the events of 9/11, it is estimated that the USA
has provided Pakistan with over $ 20 billion in the form of economic
and military related aid. Very little of this is tangibly visible in the
country and notwithstanding the recent changes to the government,
the US still remains unfavorably viewed by the majority of the
Pakistani population.
This approach contrasts completely with China with whom Pakistan
share a publically declared “All Weather Friendship”. A few years ago,
former Chinese president, Hu Jintao further elaborated on this
friendship as being “higher than the Himalayas, deeper than the Indian
Ocean, and sweeter than honey”. While geography is the major raison
d’etre of differences in US-Pakistan relations compared to China,
perhaps the most striking difference is the legacy that money flows
into Pakistan from the two countries will leave behind.
Cepc as an infrastructure:-
The China Pakistan Economic Corridor (CPEC) is the name given to a
collection of infrastructure investments in Pakistan that are a
combination of government to government and government to private
enterprises. There are also a number of planned private joint venture
agreements between Chinese and Pakistani companies. The latest
value of these 67 projects tops $ 50 billion and consists of road
building, power generation, mass transit, port development and the
development of special economic and industrial zones. A key
component of the CPEC is the road and railway linkage between
Kashgar in Western China and the Chinese run port of Gwadar in
Balochistan province. This effectively creates a new strong network
spine and which gives China access to a deep water port for cost
effective exports from the west of the country which in turn allows a
further step in its urbanization and development plans.
On the face of it, the CPEC looks like a tremendous win-win situation
for Pakistan, China and regional players (India excluded). Successive
Pakistan governments have dragged their feet with regards to creating
a workable energy plan that alleviates industrial inefficiency and
domestic shortages. Approximately 60% of the value of projects
identified within the CPEC is power related and if all are executed,
they will add over 16,000 MW to Pakistan’s power generation. The
power projects will generally be set up as joint venture entities
between Pakistani and Chinese companies on the back of
concessionary interest rates and with a pre-determined power
purchase agreement by the Pakistan government.
The word ‘connectivity’ is extensively used throughout official CPEC
literature and it will be through the planned expansion of railway and
roads that will create the biggest added value and legacy for the
country. Besides making intra country transport more efficient, it will
rehabilitate the railways and impose a efficiency regime that the public
sector has never experienced. There will be an increase of
employment as well as an imposed discipline from the Chinese to
ensure that this connectivity remains uninterrupted.
One must bear in mind that this is not free aid from the Chinese
government to its friends in Pakistan. Effectively the government and
the people of Pakistan are paying for this necessary and long overdue
infrastructure enhancement through a combination of low interest (and
in some cases, zero %) loans and the IMF has already warned that
Pakistan must remain extremely diligent in maintaining and managing
its internal and external flows especially in view of the size of the
CPEC projects.