METHOD OF BUSINESS RESEARCH

THE IMPACT OF CPEC ON

ECONOMY OF PAKISTAN
Submitted to: Miss Quratulain
Submission Date
4/30/2016
BBA 3-B
Researchers:
Farkhunda Sultan
Madiha Sultan
Masooma Batool
Sara Mashkoor
Shahneela Rehman
Shumaila Hussain
 CONTENTS
INTRODUCTION ............................................................................................................................................. 2
BACKGROUND ............................................................................................................................................... 3
LITERATURE REVIEW ..................................................................................................................................... 5
ECONOMIC .................................................................................................................................................... 5
SECURITY ....................................................................................................................................................... 6
TRADE ROUTE ............................................................................................................................................... 7
GEOSTRATEGIC DYNAMICS ........................................................................................................................... 8
SCOPE OF THE STUDY.................................................................................................................................... 9
OBJECTIVES OF THE STUDY ........................................................................................................................... 9
THE RESEARCH QUESTION .......................................................................................................................... 10
METHODOLOGY .......................................................................................................................................... 11
SAMPLING ................................................................................................................................................... 11
SUBJECT................................................................................................................................................... 11
SAMPLE SIZE ........................................................................................................................................... 11
TARGET POPULATION ............................................................................................................................. 11
STUDY SAMPLE........................................................................................................................................ 12
SOURCE POPULATION ............................................................................................................................. 12
RESEARCH TYPE ........................................................................................................................................... 12
VARIABLES OF OUR RESEARCH ................................................................................................................... 13
DEPENDENT VARIABLES .......................................................................................................................... 13
INDEPENDENT VARIABLE ........................................................................................................................ 13
MEDIATING VARIABLES ........................................................................................................................... 13
MODERATING VARIABLES ....................................................................................................................... 13
SHAPES OF VARIABLE .............................................................................................................................. 15
CORRELATION RESEARCH ........................................................................................................................... 15
HYPOTHESIS ................................................................................................................................................ 17
QUESTIONNAIRE ......................................................................................................................................... 17
QUESTIONNAIRE ANALYSIS ......................................................................................................................... 21
RECOMMENDATIONS ................................................................................................................................. 22
CONCLUSION............................................................................................................................................... 22

INTRODUCTION
Corridor is a trade routes or a belt of land linking two other areas or following a road or river. Or it
is a narrow tract of land forming a passageway, as one connecting two major cities or one belonging
to an inland country and affording an outlet to the sea or a narrow strip of land through foreign-
held territory. Corridors play a very important role by shortening the distances between countries
and destinations as well as plays a vital role in the emerging and extending trend of globalization.

Pak-china economic corridor is one of the greatest projects which have tremendous importance for
a developing country like Pakistan. It will help to strengthen the relationship between Pakistan and
china. The project is of great importance not only for Pakistan and china but also for other countries
of central Asia. CPEC is the greatest example of bilateral relationship between two countries and it
will promote mutual development of China and Pakistan by enhancing mutual exchanges and
cooperation in transport, energy, marine sector etc. the project has the potential to enhance the
strategic importance of Pakistan in the region and will help to bring prosperity to the region.

Pakistan will become an economic hub in south and central Asia i.e. an axis of regional trade. It will
contribute in the economic development by providing job opportunities for locals, develop
infrastructure, and provide power and energy to energy-starved. CPEC will help the country to start
its journey towards stability. The project has four main areas of collaboration between Pak-china.
I.e. infrastructure, transportation, energy, and industrial cooperation. The project is not only
important for Pakistan but also has great importance for china and the other neighboring land lock
countries in the region. The corridor will reduce trade route of china from 12000Km via sea, to
2000Km via land (i.e. from Kashgar-Gwadar).

Gwadar Port is one of the most important deep sea ports in the world. It is located near the straits
of Hormuz and can give China direct access to Arabian Sea. The Gwadar Port, will be one of the
most important ports in the Arabian Sea after the completion of CPEC project because it will gain
the importance as Pakistan’s economic center. In order to understand the impact of the Pak-china
economic corridor on the economy of Pakistan, we need to know about the importance of this
project as well as the role of corridors for boosting up the economy of a country. There are many
people in Pakistan who are still taking this mega project as unnecessary or less progressive project
for the country. To develop the level of understanding of common people we need to describe the
importance of Pak-china corridor for Pakistan, the background of the topic and the initial
understanding of corridors and their roles in boosting up the economy.

China-Pakistan economic corridor (CPEC) is a mega project of USD 45+ billion and the greatest
example of bilateral relationship between two countries. The project is an extension of Silk Road
project which is considering as the revival of the legendary Silk Road; one of the oldest known trade
route in the world. It is about 3000 Kilometers long, consisting of highways, railways and pipelines
that will connect China’s Xinjiang province to rest of the world through Pakistan’s Gwadar port. A
new airport, special tax-free economic zones, energy power plants and a dry port in Kashgar is also
included in the project.

The CPEC project is being viewed as very beneficial not only for the states involved but also for the
region as well. Regional connectivity and economic development are two major aspects of the
project. Furthermore, the land-locked Central Asian countries and Afghanistan will get short and
easy access towards the warm-watered Indian maritime under the implementation of CPEC.

China can also counter the US dominance in the region through the accomplishment of CPEC. China
can play a significant role in the Asian region in terms of economic uplift and regional stability
being emerging as an economic giant and future super power. China will also get the chance to
develop its North-western province Xinjiang, which is an under developed area.

BACKGROUND
Pakistan shares a 1,200 kilometers long coast line with the Arabian Sea - a mid-sea which joins the
strategic oil line of Persian Gulf with the Indian Ocean. On it lie the Karachi Port which is the hub of
Pakistan's entire economic activities as 98 per cent of the entire foreign trade is conducted through
this port. Port Qasim, It was constructed in the late 1970s, was developed close to the Pakistan
Steel Mills complex near the Indus River delta. Port Qasim is Pakistan's second busiest port,
handling about 35% of the nation's cargo (17 million tons per annum). Owing to the growing needs
of the country, there was a need to develop other smaller coastal ports into major cargo handling
ports. Beside Karachi, Pasni, Jiwani, Gadani, Ormara and Gwadar are other ports which are being
developed into world class ship handling centers. Of these Gwadar is the latest development, which
is almost completed and recently in December 2008, it has started handling shipping operations
with the arrival of three urea laded ships.

Gwadar is on the Arabian Sea coast in Baluchistan province and some 72 kilometers from the
Iranian border. It is situated about 400km from the Strait of Hormuz, a major conduit for global oil
supplies. More than 13 million bbl/d of oil pass through the Strait. It is strategically located
between three increasingly important regions: the oil-rich Middle East, heavily populated South
Asia and the economically emerging and resource-laden region of Central Asia. The present town of
Gwadar, Pakistan, lies on the Arabian Sea coast about 30 miles (48 km) to the east of Gwadar Bay.

Pakistan identified Gwadar as a port site in 1964. However, it was only in 2001 that significant
steps were taken with the help of Chinese assistance in the construction and development of the
deep-sea port. The total cost of the project is estimated at US$1.16 billion, of which China has
contributed about $198 million for the first phase for construction of three multi-purpose ship
berths. China has also invested another $200 million toward building a highway connecting Gwadar
port with Karachi.
Corridor is a trade routes or a belt of land linking two other areas or following a road or river. Or it
is a narrow tract of land forming a passageway, as one connecting two major cities or one belonging
to an inland country and affording an outlet to the sea or a narrow strip of land through foreign-
held territory. Corridors plays a very important role by shortening the distances between countries
and destinations as well as plays a vital role in the emerging and extending trend of globalization.
The CPEC is a comprehensive development program that entails the linking of Gwadar Port to
China’s northwestern region of Xinjiang through highways, railways, oil and gas pipelines, and an
optical fiber link. Major physical infrastructure to be built includes 2,700-kilometre highway
stretching from Kashgar to Gwadar through Khunjrab, railways links for freight trains between
Gwadar and Khunjrab linking to China and having possible regional connectivity with Afghanistan,
Iran and India, and the Karachi-Lahore motorway. Besides physical links connecting Pakistan and
China, the project also envisages establishing several economic zones along the corridor. Also, an
Energy Planning Working Group of the CPEC has been established that will undertake fast-track
implementation of power projects related to the CPEC. Those projects of 21,690 MW power
productions will be undertaken with the assistance of China under the CPEC plan (Pakistan Today,
2014).

The corridor will connect Gwadar Port in Baluchistan (Pakistan) to Kashgar in north-western China,
which will make Gwadar not only fully operational but also a significant deep sea port in the region.
The project will also undertake the revival and extension of the Karakorum Highway that links
Xinjiang with Pakistan's northern region Gilgit–Baltistan and Khyber Pakhtunkhwa.

Pak-china economic corridor is an example of bilateral trade between the two countries. China and
Pakistan have developed strong bilateral trade and economic ties and cooperation over the years.
China has gradually emerged as Pakistan’s major trading partner both in terms of exports and
imports. Bilateral trade and commercial links between the two countries were established in
January 1963. Free Trade Agreement (FTA) between the two countries – signed on November 24,
2006 and implemented from July 1, 2007. Opened for operations in 2007, the control of Gwadar
Port was transferred to China’s state-owned China Overseas Ports Holding in February 2013. Since
then, Gwadar is undergoing a major expansion to turn it into a full-fledged, deep-water commercial
port (South China Morning Post, 2014).

It will serve as a primary gateway for trade between China and the Middle East and Africa. The
corridor is expected to cut the 12,000-kilometre route that Middle East oil supplies must now take
to reach Chinese ports (Ibid). Besides meeting China’s needs in energy and developing its far west
region and upgrading Pakistan’s economy, the CPEC is expected to benefit the people of countries in
South Asia, contributing towards maintaining regional stability as well as economic integration
(China Daily, 2013).
LITERATURE REVIEW
China and Pakistan privilege to have an “all-weather” friendship. Their geographical nearness
enhances geo-economics worth to their overall relationship. To enhance the benefits of their
common border, the two sides in 1982 accomplished the legendary Karakorum Highway (KKH),
linking China’s Kashgar to Pakistan’s Islamabad, through the Khunjerab Pass. Throughout the
2000s, the highway was stretched and modernized to make it functioning for all kinds of traffic,
year round. An internal network of roads connects KKH with Pakistan’s Gwadar and Karachi ports
in the south of the country (Ghulam, 2015)

In addition, the precious stone in the crown for China is the development of Gwadar port and
Gwadar region (Saqib and Qi, 2014), as Gawadar port is a vital part of CPEC which would provide
Beijing a firm and trustworthy long-term foothold in the Indian Ocean and adjacent to the Persian
Gulf, efficiently making it a two-ocean power. The CPEC will behave as a channel for the novel
Maritime Silk Route that imagines connecting three billion people in Asia, Africa and Europe. A
leading project of the one Belt and one Road initiative as well, the CPEC aims to revive the earliest
Silk Road with an emphasis on infrastructure, and establishes the strategic structure of bilateral
cooperation. (Saqib and Qi, 2014).

ECONOMIC
Pakistan and China have long-established diplomatic and military ties and are now entering an
epoch of developing an economic relationship with the China-Pakistan Economic Corridor (CPEC).

The financing and the operation of the Gwadar Port is a clear indication of how necessary it is to
integrate Pakistan and China economically. Increasing economic integration will help fulfill the
national interests of both countries. Chinese Prime Minister Li Keqiang stated, “We hope to create a
giant economic corridor that would not only enhance China’s strategic significance but would also
help in restoring peace and stability to Asia.”

In need of an economic revival, Pakistan (including the province ofBalochistan) is going to be

moving towards a stronger economy. Every emerging or growing country faces challenges when it
is in the transition phase of economic development.

Every emerging or growing country faces challenges when it is in the transition phase of economic
development. China and Pakistan have the opportunity to create connections, which if worked as
planned and without any disruptions, will strengthen the Asian economy as a whole.

Today, Pakistani–Chinese diplomatic engagement follows a pattern that has been called a “subtle
partnership.” It does “the minimum necessary to preserve Pakistani security from a distance, but it
has sought to avoid all overt entanglements” in Islamabad’s challenges to Indian primacy in South
Asia. Closer economic relations between China and Pakistan risk irking India. (Arooj Naveed, 2015)

While China has been important to the world economy for decades, the country is now wielding its
financial heft with the confidence and purpose of a global superpower. With the center of financial
gravity shifting, China is aggressively asserting its economic clout to win diplomatic allies, invest its
vast wealth, promote its currency and secure much-needed natural resources. (Krepon, 2015)

South Asia is one of the least economically integrated regions in the world – Sub-Saharan Africa, the
Middle East, and North Africa all have higher intra-regional trade. Intra-regional trade is only 3-5%
of the total trade of the region, representing just over 1% of regional GDP, while this percentage is
7% in East Asia. India’s trade with its neighbors is less than 3% of its total trade. These challenges
have an immense impact on South Asia’s economies. However, China, with the second largest
economy in the world, wants to use its economic influence in the region.. The China-Pakistan
Economic Corridor (CPEC) is one of the key components of China’s plan. ( Zainab Ahmed,2015)

India’s opposition to CPEC is justified on the grounds of breaching its strategic autonomy as it will
pass through the troubles regions of kashmir. I wonder how Pakistan has been misused by US and
now China. Both have made commitments of Billions of dollars in aid to resurrect the fragile
Pakistan economy. Pakistan has regularly approached IMF for regular bail-outs and this reflects
how badly its economy is managed. Now, with the coming of China, Pakistan must investigate
Chinese invasion in Africa too. No doubt, the commitments Chinese have made are difficult to
achieve, rather will they provide any job to Pakistan locals is doubtful. ( Samar Tyagi, 2015)

Pakistan’s economy is meager not owing to its less resources but because of corruption at the top
echelon of the country including government and military officials. Still if these corrupt officials
keep black money at home, its economy will grow. The CPEC is going to give Pakistan’s economy an
unconditional boost. Its geographical location gives Pakistan an edge just to take annual rent of the
port and enjoy the life. As compare to this Indian economy is more in bad shape as compare to
Pakistan because Indian economic policy ignores 40% of the population while making any national
economic policy that is increasing poverty in India at an alarming level. ( Rana Ejaz Ahmad, 2015)

All countries in the world have to seek their interests as top priority. Pakistan’s interests can be
materialized in true sense only if all institutions and political players in the country agree on
“Charter of Economy” as to receive transit money from China will be the minimum benefit. Where
to establish Economic zones, what to export, how to Train manpower to meet the needs of relevant
industries needs a lot of brain storming at our End in Pakistan. (Muhammad Usman Awan,2015).

SECURITY
In CPEC Gawadar port playing a vital role in establishing this phenomenon because the financing
and the operation of the Gwadar Port is a clear indication of how necessary it is to integrate
Pakistan and China economically. Increasing economic integration will help fulfill the national
interests of both countries. (Arooj Naveed, 2015) conversely, After 9/11, the emerging security
alignment and changing parameters in the geo-strategic balance in the region have greatly upset
Pakistan’s ambition of obtaining the “strategic depth” in Afghanistan and Central Asia. However
Gwadar Port provides both Pakistan and China to strengthen its security vis-à-vis India. As it said
that „the security of Pakistan is adequately established by developing relations with China to
counter India’s hegemonic aspirations in the region. Similarly, the security of Pakistan, Iran and
Afghanistan is interlinked and is indivisible. Pakistan has always tried to project itself as the only
country in the region that can compete with India. In addition Gwadar port has a great strategic
advantage for Pakistan. It provides Pakistan with strategic depth vis-à-vis India in the Arabian Sea.
On the other hand a strong Indian navy and its presence in the Arabian Sea pose threat to Pakistan’s
security. Gwadar port will also provide a strong base for Chinese ships and submarines. Since
Gwadar Port can fulfill its political, security and commercial objectives vis-à-vis India, China has
spent a huge amount on its construction. (Khan, Z. A.2013) China and Pakistan must guard against
hegemony and unilateralism, and safeguard their own sovereignty and security interests. They
must learn the lesson of turbulences from West Asia and North Africa, firmly safeguard their
domestic security and stability, steadily promote their reform, and oppose the interference of
foreign forces in their internal affairs.( Khan, A. U. 2014).
TRADE ROUTE
China has steadily appeared as Pakistan’s largest trading partner equally in terms of exports and
imports. Mutual trade and commercial links between the two nations were established since
January 1963 when both nations engaged the first bilateral long-term trade agreement (Ministry of
Finance, 2014) Two countries have frequently exchanged high-level visits ensuing in a variety of
agreements and investments in both nations at government level as well as private bodies
(Muhammad and Qi, 2015)3. Pakistan and China signed a bilateral Free Trade Agreement (FTA) in
2006 which came into effect in 2007. The agreement was separated in two parts with Phase I
ending in December of 2012 and negotiations for Phase II beginning in July of 2013. The agreement
targeted bilateral trade of 20 billion dollars between Pakistan and China at the end of Phase II. Total
trade of Pakistan and China under FTA rapidly increased from US$ 3.5 in 2006 to US$ 14.3 billion in
2013.China was second major importing partner of Pakistan with share of 16.17% of Pakistan’s
total imports in 2013 (Muhammad and Qi, 2015).

The China-Pakistan Economic Corridor (CPEC) is expected to further strengthen trade and
economic cooperation between the two countries. Chinese Premier Li Keqiang emphasized the
construction of the CPEC during his May 2013 visit1 to Pakistan (Tiezzi, 2014)2. CPEC purpose to
connect Kashgar in China’s Xinjiang Uygur Autonomous Region with the southwestern Pakistani
port of Gwadar (GOP MOFA 2013)3. The CPEC will behave as a channel for the novel Maritime Silk
Route that imagines connecting three billion people in Asia, Africa and Europe. A leading project of
the one Belt and one Road initiative as well, the CPEC aims to revive the earliest Silk Road with an
emphasis on infrastructure, and establishes the strategic structure of bilateral cooperation.

Corridor is a trade routes or a belt of land linking two other areas or following a road or river. Or it
is a narrow tract of land forming a passageway, as one connecting two major cities or one belonging
to an inland country and affording an outlet to the sea or a narrow strip of land through foreign-
held territory.

A corridor plays a very important role by shortening the distances between countries and
destinations as well as plays a vital role in the emerging and extending trend of globalization.

The project is not only important for Pakistan but also has great importance for china and the other
neighboring land lock countries in the region. The corridor will reduce trade route of china from
12000Km via sea, to 2000Km via land (i.e. from Kashgar-Gwadar).

This project is an extension of Silk Road project which is considering as the revival of the legendary.
The Silk Road is one of the oldest known trade route in the world. It is about 3000 Kilometers long,
consisting of highways, railways, oil and gas pipelines, and an optical fiber link that will connect
China’sXinjiang province to rest of the world through Pakistan’s Gwadar port.

Pakistan shares a 1,200 kilometers long coast line with the Arabian Sea - a mid-sea which joins the
strategic oil line of Persian Gulf with the Indian Ocean.

The corridor will also connect Gwadar Port in Baluchistan (Pakistan) to Kashgar in north-western
China, The project will also undertake the revival and extension of the Karakorum Highway that
links Xinjiang with Pakistan's northern region Gilgit–Baltistan and Khyber Pakhtunkhwa.

The corridor is expected to cut the 12,000-kilometre route that Middle East oil supplies must now
take to reach Chinese ports (Ibid).
GEOSTRATEGIC DYNAMICS
Pakistan could emerge as a hub of commerce and trade in the region with the construction of the
CPEC that would entail establishing several economic and industrial zones and physical road and
railway links connecting Pakistan and China. As the corridor also anticipates having regional
connectivity with India and Afghanistan–although it is still too early to comment whether regional
element of the CPEC will become operational or not–it could also enhance regional economic and
trade cooperation, that in turn would contribute towards regional peace and stability.

Gwadar holds central place in the utility of the China-Pakistan Economic Corridor because without
making the Gwadar Port fully functional, it would be difficult for China to see the anticipated
corridor as an energy corridor that appears as one of its main objectives behind the construction of
the CPEC. Located near the Strait of Hormuz, which channels about one third of the world's oil
trade, Gwadar could play a key role in ensuring China's energy security as it provides a much
shorter route than the current 12,900km route from the Persian Gulf through the Strait of Malacca
to China's eastern seaboard (Chowdhury, 2014).

However, there is the view that the construction of the CPEC will ‘place Gwadar on the matrix of
intense geo-strategic competition’ (CPGS, 2014). It has been said that Gwadar will also put China
and Pakistan in a strategically advantageous position along the Arabian Sea compounding already
existing Indian concerns that stem from ‘China's involvement in nearby ports such as Hambantota
in Sri Lanka, Sittwe in Myanmar and Chittagong in Bangladesh’ (Chowdhury, 2014). One the other
hand as India is also energy hungry it looks forwards to developing Iran’s Chabahar Port. In October
2014, Indian Prime Minister Narendra Modi’s cabinet decided to develop Chabahar Port, which
many believe is central for India to open up a route to landlocked Afghanistan, where it has
developed close security ties and economic interests (Dawn, 2014a), and to have access to energy-
rich Central Asian States.

While Gwadar is located in Pakistan’s Balochistan province, where a nationalist insurgency is rife,
Chabahar is located in the Iranian province of Sistan-Baluchistan where unrest prevails as well
mainly due to certain violent Sunni sectarian-nationalist groups operating in the district. If peace
and stability is not achieved in Afghanistan after the drawdown of international assistance forces,
and countries in the region, mainly India, Pakistan and Iran, engage in proxy wars, it could have
some implications for internal security mainly for Pakistan, Afghanistan and Iran that could impact
development projects. Pakistan has blamed India in the past for supporting Baloch insurgents from
Afghan soil. Similarly, Iran has concerns regarding Jundullah–a sectarian insurgent group based and
operating in Iran’s Sistan-Baluchistan province with free cross-border movement into and from
Pakistan. But analysts argue that while Pakistan has struggled to achieve security in Balochistan,
Iran has the capacity to enforce its writ in Sistan-Baluchistan that suggests Chabahar could become
functional earlier than Gwadar, if pursued by India and Iran fervently.

Nonetheless, China has devised a pro-active foreign policy vis-à-vis the Middle Eastern countries by
using the United Nations as a platform to negate the ongoing war in the region (CPGS, 2014). As far
as Iran is concerned, China wishes to resolve the Iranian nuclear issue through peaceful political
settlement. Moreover, when it comes to ties between Pakistan and India, China has played its part
(Ibid). At the same time, for China, Pakistan’s geo-strategic position is very crucial as it serves as a
window into the Middle East. Meanwhile, it has already expanded its trade, infrastructure and
energy links with most of the Central Asian Republicans (Pakistan-China Institute, 2014). But
insecurity and instability in Afghanistan are a major source of concern not only for China but also
other neighboring countries including Pakistan, India and Iran. China is already the biggest
economic investor in Afghanistan with about $7.5 billion investment (Ibid). China has recently
enhanced bilateral and trilateral efforts aimed at strengthening regional cooperation and
coordination. It hosted the Fourth Ministerial Conference of the Heart of Asia-Istanbul Process
Beijing on October 31, 2014 with a view to promote security and stability in the Afghanistan, in
cooperation with its neighbors (Arif, 2014). China has also pushed the matter of Afghanistan’s
future after the drawdown withdrawal to the top of the Shanghai Cooperation Organization’s
agenda (Pakistan-China Institute, 2014).

While cooperation among all countries in the region, at least in terms of trade and economy, would
be an ideal scenario with changing regional dynamics, there is a strong likelihood that persisting
bilateral conflicts and an environment of mistrust will keep them polarized and part of alliances
where Pakistan would certainly remain closer to China, with emerging regional dynamics having
little impact on the construction of the CPEC and functioning of the Gwadar Port. But it still remains
to be seen whether or not the CPEC and Gwadar could become instrumental in forging and
enhancing regional coordination and cooperation, although they are designed to have regional
connectivity with India and Afghanistan.

SCOPE OF THE STUDY

The scope of this study is to develop a common understanding about the importance of the project;
Pak-china economic corridor and its impact on the economy of the country and the sub-continent.
As well as the need to develop distance shortening routes both corridors and maritime to boost up
the economy as well as to develop bilateral and strategic relationship between the countries.

The study focusing on enhancing the factors affecting the project as well as the economy of
Pakistan. It elaborates how beneficial the project is, not only for Pakistan but also for china and
others neighboring countries, especially the land lock one. Analysis of various researches has been
carried out to identify various variables and aspects for understanding and elaborating the
accountability and need to increase the volume of maritime trade and short trade routes to link
countries, necessitate handling the growing volume of trade through such type of free trade
agreement projects. It also enhances the role and importance of Gawadar port as a primary
gateway for trade between China and the Middle East and Africa.

OBJECTIVES OF THE STUDY

The main objective of the study is to enhance the importance of Pak-china economic corridor for
the economic development of Pakistan and china as well as for the sub-continent. The study aims to
provide awareness to common public regarding the role of corridors and land routes to cope up
with the challenges of globalization by shortening the trade routes and the importance of this
project for Pakistan. Beside this, it also provides information and data to the business sectors of the
country as well as of the globe to identify the business opportunities and investments scope in the
project. It covers the main issues related to the security, political influence, and unstable
relationship with the neighboring etc. which have a devastating influence on the development,
establishment and success of the project.
The specific aims of the study are to:

 The impact of CPEC on the economy of Pakistan and the region.

 The role of corridors in the development of economy and shortening the distances
between the destinies.
 Importance of regional connectivity and bilateral strategic relationship.
 The current situation of trade routes i.e. maritime, road routes and road links
between Pakistan and china as well as the situations after CPEC will complete.
 To elaborate CPEC as an integral element with the potential to enhance the regional
connectivity and trade.
 Role of CPEC aimed at improving Pakistan’s trade and investment relations with
China as well as Central Asia.
 The wide range of business opportunities for the nation and the rest of the world.
 Identify the constraints to be overcome in order to achieve full benefits of the
project.
 Define the necessary steps needed to take for the development of the projects.
 To enhance Pakistan’s greatest constructive role in regional and international
affairs.
 To highlight the challenges face by the two countries in establishing the corridor
and to identify important measures needed to adopt to cope up with these
challenges.

THE RESEARCH QUESTION

The importance of the mega project CPEC is still not being realized by many, due to lack of coherent
and consistent academic work on this project. However there’s a bit and pieces of information do
exist but, a coherent and comprehensive work is still required.

In order to provide a comprehensive and coherent piece of information to enhance the importance
of this mega and economy boosting project as well as its impact on the economy not only of
Pakistan but also of the sub-continent, the paper addressed the research question;

“What will the Impact of Pak-china economic corridor on the economy of Pakistan?”

A comprehensive question integrated by numbers of questions to enhance the impact of CPEC on

the economy of the country as well as its importance for the region. The research is followed by the
number of evidences, factors, development programs and the expectations associated with CPEC, as
well as the reasons for its success or failure. The paper also evaluates the need of such projects for
the economic boost in the country. And the role of good bilateral strategic relationship between
Pak-china in the economic and infrastructural development of the country. The paper has tried to
develop a common understanding regarding corridors and its necessity for the land lock countries
as well as to shorten the distances between the two destinations.

The benefits of shortening the distances on trade and economy. Moreover the role Pakistan will
play in facilitating these facilities to china as well as other neighboring countries. Besides the
benefits Pakistan will receive in return by providing these facilities, which will have a tremendous
impact on the country’s economy as well as on the stability of Pakistan and the region.

The paper has addressed the role of Gwadar port as a turning point for the economy of Pakistan as
well as for china. The paper will analyze how much the CPEC will boost the economy of the country,
what economic benefits can be obtain from selecting Gwadar and the route for CPEC. The role both
the countries needed to perform and should perform for the reinforcement of the success of the
project in all related fields of the project. Will try to identify the areas where sufficient and effective
efforts and policies are lacking, if any. For this account, the paper would make qualitative
recommendations to optimize the economic benefits from the project and to reduce the chances of
its failure.

As Gawadar port is expected to give a tremendous boost to Pakistan’s accountability in the region
by providing it a great strategic value and by providing an opportunity to act as a trade and energy
get way for the entire region. Because it is the most shortest and economical trade route for china,
central Asia states to reach the rest of the world markets. A huge trade is going to flow through
Gawadar therefore it is expected that it will generate a lot of revenues for the country and hence
boost up Pakistan’s economy.

On the other hand the paper tried to wipe out a miss conception regarding the one sided benefits
for China from CPEC project, by elaborating the project’s scope for Pakistan as well as for china.
CPEC is the mega project that will serve all the countries in South Asia, but its objectivity is related
to china and Pakistan only, by contributing towards the regional stability as well as the economic
integration.

METHODOLOGY
SAMPLING
A sample is subset of population or in other words sample is the small group of people or individual
Which represent the whole population.

SUBJECT
Our research topic is “ECONOMIC CORRIDOR”. And take opinion from professional persons about
the research. Take different opinion and make the group.

SAMPLE SIZE
In sampling to collect 50 of unit from the population.

TARGET POPULATION
Age: We select the age group between 22 to 40 (onwards)

Domain: Business person, Management, Security forces, journalist, economist, international person.
STUDY SAMPLE
In study sample we get knowledge through “Secondary Data”. In Secondary data we take knowledge
from, books, thesis, website etc.

SOURCE POPULATION
o Who do you want to generalize to?
 The Theoretical population

o What population can you get access to?

 The study population

o How can you get access to them?

 The sample frame

o Who is in your study?

 The sample

RESEARCH TYPE
We conducted Explanatory Research about impact of CPEC in Pakistan economy. The CPEC is a
comprehensive development program that entails the linking of Gwadar Port to China’s northwestern
region of Xinjiang through highways, railways, oil and gas pipelines, and an optical fiber link. Our
Research based on secondary data from which we evaluate the different variables and give more
explanation in our Research.
VARIABLES OF OUR RESEARCH

DEPENDENT VARIABLES
 Economy
 Trade

INDEPENDENT VARIABLE
 Political Stability
 Security
 Geographical Location
 Route
 Administrative
 Relationship with Neighbor countries

MEDIATING VARIABLES
 China-Pak Economy Corridor

MODERATING VARIABLES
 Terrorism
 Visionary Leadership
 Geographical
Political Stability Security
Location

Relation with
Route Administration
Neighbor Countries

 Terrorism
 Visionary
leadership

China-Pak Economic
Corridor

Economy Trades
SHAPES OF VARIABLE

 Independent Variable

 Dependent Variable

 Mediating Variable

 Moderating Variable

CORRELATION RESEARCH
Correlation research is looking for variables that seem to interact with each other, so that when you
can see one changing, you have an idea of how the other will change. This often entails the
researcher using variables that they can't control.

In our study of this topic, we have come to know that there are a lot of variables that may directly or
indirectly affects the CPEC project. Some major variables are discussed below.

POLITICAL STABILITY

Pakistan needs political stability and continuity of democratic process to ensure economic growth
and development and to achieve its huge potential of becoming a regional hub for trade and
commerce as political stability is required for the mega project.

SECURITY

The pivotal concern of Pakistan’s national life is security, both internal and external i.e. country’s
defense from hostile forces from within and without. Pakistan is facing extensive challenges to its
security which have direct linkages to external threats. Without proper security the CPEC progress
will remain questioned as it is the most important project for the betterment of the economy of
Pakistan
Central Asia, an emerging region rich in untapped resources, will benefit. Being landlocked is one of
the greatest barriers to increasing Central Asia’s exports. Pakistan intends to connect Gwadar Port
with Central Asia for trade and energy transportation. Once the way is open to Central Asia for bi-
lateral trade, the markets of Europe will also be accessible as it is the benefit of being on ideal
location for Pakistan.

ROUTES

The three routes of the economic corridor are set in a way that the western route originating from
Gwadar will pass through Turbat, Panjgur, Nag, Basima, Sorab, Qalat, Quetta, Qilla Saifullah and
Zhob and reach Dera Ismail Khan before leading to Islamabad.The second (central) route will
originate from Gwadar and reach Dera Ismail Khan The third route will include Gwadar, Basima,
Khuzdar, Sukkur, Rahimyar Khan, Bahawalpur, Multan and Lahore/Faisalabad and then reach
Islamabad. The three trade routes that shall stretch from the Himalaya Mountains to the Arabian
Sea are actually inter-connected these highways have inter-linked transportation and trade
encouraging small towns and cities to develop along the routes and for Pakistan such a project is a
jewel in the crown. In terms of trade route, China mainly relies on the shipping route that passes
through the Strait of Malacca and it takes some 45 days to reach Europe via the Middle East. When
the CPEC is completed, it would take approximately 10 days for Chinese shipments to reach their
destination, as the Kashgar-Gwadar route will play a pivotal role in reducing the staggering amount
of time and distance. Not only this, the reliance on the Malacca route would be significantly
reduced.

ADMINISTRATION

Nepotism, weak judicial mechanism and military leadership involvement in the political process is
causing weak administrative level for our country which may cause effects on the development of
the CPEC.

CONCLUSION

The above described factors are the most important variables for the betterment of CPEC as these
are independent variables that affect the Economy & Trade in the state. If proper steps for these
variables would not be taken than the economy may suffers and causes the declining state of Trade
which is being forecasted to be getting on its peak after the establishment of CPEC.

For get rid of these issues we need to control the terrorism level in Pakistan as it is creating hurdles
in the accomplishment of Economy setup goals & proper visionary leadership should be provided
for the enhancement of the internal & external environment of the CPEC.
HYPOTHESIS
 Pakistan needs political stability and continuity of democratic process to ensure economic
growth and trade.
 There is positive correlation between Security and development of economy and trade
sector.
 Routes have great impact on CPEC as china will receive their shipment in 10 days that will
improve their and Pakistan’s Economy.
 Strong administration will give boost Pakistan Economy as well as manage operation of
CPEC.

QUESTIONNAIRE
Designation: ………………………………………………………

AGE: ………………………………

GENDER: 1 ( ) Male 2 ( ) Female………………………..

Q#1: Are you aware of the objectives of CPEC?

 Yes
 No
Q#2: Are you satisfied with the objectives of the project?

 Yes
 No
Q#3: Do you believe that Pakistan really needs such type of mega projects?

 Yes
 No

Q#4: Do you agree with the accountability of the mega project for Pakistan to hold an economic
command over the trade from central Asia to Europe?

 Yes
 No
Q#5: Are you satisfy with the role and strategies adopted by the forces of Pakistan to maintain
peace in Baluchistan?

 Yes
 No
Q#6: Are you in the favor of such mega projects in Pakistan with the collaboration of other
countries like china?

 Yes
 No
Q#7: Do you satisfy with the areas selected to be cover in CPEC and their importance for the
development of the country?

 Yes
 No
Q#8: Do you know about the land-locked countries?

 Yes
 No
Q#9: will CPEC help to boost the economy of Pakistan as well as the sub-continent?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#10: The governments of Pak-china are conducting bold step for the accomplishment of this mega
project?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#11: Gawadar will play the role, expected to play as the gateway to the economic zone?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#12: Do you believe that security is a big constraint in the success of CPEC?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#13: Do you agree that the route selected for the CPEC is fruitful and safe?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

Q#14: CPEC will strengthen the relationship between Pakistan and china?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#15: CPEC is the project that will benefit only china?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#16: Gawadar will be a turning point for the economy of Pakistan?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#17: Pakistan will become an economic hub for the region once the CPEC starts its operations?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#18: CPEC will help to reduce U.S. dominancy in the sub-continent?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#19: do you agree with the importance of friendly relationship with Iran and Afghanistan for the
success of CPEC?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
Q#20: are you satisfied with policies designed by the two governments for the establishment as
well as for the development of the project?

 Very Satisfied
 Somewhat Satisfied
 Neither Satisfied Nor dissatisfied
 Somewhat dissatisfied
 Dissatisfied
Q#21: are you satisfy with the role and strategies adopted by the forces of Pakistan to maintain
peace in Baluchistan?

 Very Satisfied
 Somewhat Satisfied
 Neither Satisfied Nor dissatisfied
 Somewhat dissatisfied
 Dissatisfied
Q#22: CPEC will bring to Pakistan;

a) Stability
b) Number of business opportunities
c) Economic boost
d) Increment in employment
e) All of them
f) Any other_______________________________.

Q#23: CPEC will help to develop in Pakistan;

a) Country’s Infrastructure
b) Reduction of energy & power starvation
c) Both
d) Any other_______________________________.
QUESTIONNAIRE ANALYSIS
On the basis of research question we interpret the questionnaire after getting responses from
respondents, out of 50 unit sample 48 respondents responded the questionnaire. The 48
respondent includes people from different sector i.e. business, security, traffic, IT officers etc. All
respondents helped us to interpret the result of our questionnaire. According to the objectives of
our research we have to enhance the importance of China-Pak corridor in the economy of Pakistan
and the sub-continent. Following are the points that we have derived from the result of
questionnaire.

 46 respondents said that they are aware about the objectives of CPEC & 44 are satisfied
with the objectives.
 43 respondents understands the need of CPEC in the Sub-continent, are satisfied with the
strategies adopted by the forces of Pakistan & are in favor of the mega projects in Pakistan
with collaboration of other countries.
 43 respondents are Agreed that CPEC will boost up the economy of Pakistan, they are
agreed that both countries are taking bold step on the accomplishment of the project &
respondent also agreed that Gawadar port will be a gateway to the economic zone of the
sub-continent and also a turning point for the economy of Pakistan.
 39 respondents agreed that Pakistan will become an economic hub for the region and it will
also decrease the U.S. dominancy.
 38 respondents accepted that CPEC will bring the stability, number of business
opportunities, economic Boost & increment in employment.
 39 accepted that CPEC will help to develop the country’s infrastructure.

Hence, our research question got answered after the interpretation of the Questionnaire, CPEC will
be fruit full and important for the economy of Pakistan. According to our sample unit we have
proved that CPEC will have the great impact on the economy of Pakistan because after its
accomplishment there will be decrease in un-employment, Pakistan will become an economic hub
for the region, Gawadar port will be the most integral part for the CPEC as Pakistan is providing a
way or route to the land-locked Countries, Balance of payments will be in positive and all the
shipment to the china will be handled from Gawadar Port.
RECOMMENDATIONS
Pakistan’s political and economic decline has turned it into a state of failures. Pakistan is suffering
from many disasters like; political instability, economic instability, lack of investment, terrorism,
extremism, weak educational system, unemployment, security issues etc. all these factors
comparatively has made a drastic effect on the development of the country as well as on the
country’s economy by leaving Pakistan with a large, Young, and poorly educated population who
are unable to perform their roles for the development of the country.

CPEC is one of the positive signs for Pakistan to become a viable state which is emerging as a hope
to bring peace and prosperity not in the country but into the region as well. The importance of this
project is known to everyone, but the project is can be fruitful only if Pakistan plays the role he
needed to play. There are so many factors and variables we have studied in our research which can
or are influencing the accountability and worthiness of CPEC for the region.

Following are some of the recommendations:

• If bold steps are taken in the areas we have studied in the research, Pakistan can fully get
the benefits of this project. There is a greatest need of transparency in all the fields and domains of
the project which are either directly or indirectly related to it.

• A proper check and balance on the performance of every single factor and area of CPEC will
help to increase the performance as well as the efficiency of the work force and the team.

• No matter what are the political circumstances in the country, the policies should be
designed to prevent any political influence on the project’s prospective and its accomplishment.

• There should be on time payments of budget and rapid investment so that there is no delay
in the project processes. The western alignment which has the potential associated with the
development of the operation, but it is possible only if the planning, financial allocations and
releases are on time.

• Land lord policies should be adopted to privatize the terminals which can help to increase
port’s performance.

• Sufficient and more effective military operation is necessary to end terrorism and to root it
out completely.

CONCLUSION
In this research we concluded that CPEC will act as a vital sign for the economy of Pakistan as well
as the region. The research has explained that CPEC is not the project only for china but it has a
wide impact for the development of Pakistan’s economy as well as its infrastructure.it will serve as
a key ingredient to strengthened the bilateral relationship between Pakistan & China and also help
to lower the U.S. dominancy in the region, if the Two governments adopt bold & strong decision and
policies for the accomplishment of this project so it will help to achieve the goals & objectives of
CPEC.