MEHRAN UNIVERSITY OF ENGINEERING AND TECHNOLOGY, JAMSHORO

ASSIGNMENT
TOPIC: ADVANTAGES AND DISADVANTAGES OF CPEC
NAME: MUAAZ MUNEER SOOMRO
DEPARTMENT: ELECTRICAL ENGINEERING
SUBMITTED TO: JAVED LARIK
ROLL NO: 19EL115 SECTION: B
DATE OF SUBMISSION: 05-09-2020
MEHRAN UNIVERSITY OF ENGINEERING AND TECHNOLOGY, JAMSHORO

“ADVANTAGES AND DISADVANTAGES OF CPEC”

INTRODUCTION:
China-Pakistan-Economic-Corridor (CPEC) is the
major part of the one belt one road (OBOR) the pet globalization project of
Xi Jinping with roots in the great ancient and medieval silk roads. The
project (CPEC) will start from Pakistan through Gwadar Baluchistan and
end in Kashgar in the west part of china while passing through the parts of
Sindh,Punjab,Balochistan,Khyber-Pakhtunkha Provinces and Gilgit-
Baltistan in the northern Pakistan to reach Khwrab Pass and beyond to
china. This corridor will reduce sea land route distance between Europe and
Western China to less than half .Originally china intended to invest 46
Billion dollars under CPEC that has now been increased to approximately 62
Billion Dollars according to a report in 2017.This Economic corridor
comprising an eclectic set of projects in energy, road, railway and fiber
optics.
ADVANTAGES OF CPEC
1. Fulfill Energy Requirements of Pakistan: The major obstacles faced by
Pakistan’s economy include persistent industrial losses due to energy crisis.
Under CPEC a grand total of 21 energy projects have been planned that will
help us in eradicating the shortfall of energy in Pakistan.
2. Addressing the infrastructural requirements of Pakistan: One of CPEC’s
primary objective is to look to addressing pressing infrastructural
requirement of Pakistan. Nearly 11 billion earmarked for infrastructure
development the road and railway network will greatly benefit Pakistan’s
economy
3. Special Economic Zones:(SEZ) are specialized zones with specific types
of enterprises operating in a well-defined geographic area where certain-
MEHRAN UNIVERSITY OF ENGINEERING AND TECHNOLOGY, JAMSHORO
economic activities are promoted by set of policy. Under CPEC, 27 such
zones will set up in different areas of Pakistan.
4.Investment in Real Estate Business Sector: Pakistan’s real-estate market
has posted a 118 percent growth from (2014-19) .This was possible because
of over whelming better security situation and CPEC.Developments
supported under CPEC with property prices rising by nearly 70% in Gwadar.

5. Growth potential in stock exchange: The report of Pakistan Stock

Exchange has clearly shown the increased capitalization in the Pakistan
Stock Exchange (PSX) which is due to attractive environment built after the
investment made by the Chinese Government. The investment attracted
foreign investors to invest in PSX. Analysts are saying that this investment
and the project is a game changer for the region
6. Reinforcement Export of fruits: The region of Gilgit-Baltistan is known
for its fresh fruit exports, like cherries, apricot and apples.CPEC will be a
game changer by opening business opportunities for region’s traders.
7. Establish foothold in manufacturing: China plans to shift parts of its $300
billion textile to Pakistan for which industries zones are being identified by
both countries. If adequate government level attention is given to chine’s
interest than these opportunities would support Pakistan’s manufacturing
sector.
8. Helpful in Eradicating Poverty: CPEC project is based on construction of
textile garment, industrial projects, dams and installation of nuclear reactors
and creating a network of roads, railway line which will automatically
generates employment and the projects will also facilitate the education,
technical side and will improve the quality life of people.
MEHRAN UNIVERSITY OF ENGINEERING AND TECHNOLOGY, JAMSHORO
DISADVANTAGES OF CPEC
1. Threat to local manufacturing sector: This sector will face a high pressure
due to an increase in competition from chine’s manufacturing firms. Several
chines’ brands of each product will be floating in the Pakistan market.
2. Cultural Issue: over the years, Pakistan culture is rigid to accommodate
other cultures. The inflow of chine’s people can create friction among
cultures.
3. Indian suspicious Nature: India will remain suspicious of Pakistan as
China-Pakistan relations become closer, same applies to the USA.
4. Chines Influence: Pakistan will face undue Chinese influence similar to
US influence in the Pakistan. The regional geopolitics will become
complicated and regional rivalries will intensify.
5. Dumping Issue.: There is a fear in Pakistan production sector that chine’s
firms will start to dump the excess production in Pakistan.
6. Corruption Issue: Corruption is a big problem in Pakistan whereas in
china corruption is punishable by death. How would chine’s companies react
to corruption in Pakistan.
7. Pakistan’s economic sovereignty essentially mortgaged to China: The
CPEC is based on a $62(According to report 2017) Billion loan that Pakistan
has taken from China. It is not a FDI that China will recover from the
proceeds of the CPEC.what will happen if Pakistan will not be able to pay
back these loan and these loans comes with a high interest rate.
8. Environmental impact: A repeat of the point above, except China’s
disregard for the environment and utter destruction of ecological systems
wherever its tentacles reach, are a sad eventuality of letting China in.