Received: 1 October 2018 Accepted: 13 October 2018

DOI: 10.1002/pa.1888

ACADEMIC PAPER

China–Pakistan economic corridor projects development in

Pakistan: Local citizens benefits perspective
Shamsa Kanwal1 | Ren Chong1 | Abdul Hameed Pitafi2

1
School of Public Affair, University of Science
and Technology of China, Hefei, China
2
School of Management, University of
Science and Technology of China, Hefei, China
Correspondence
Ren Chong, University of Science and
Technology of China, 96 Jinzhai Road, Hefei,
China.
Email: renchong@ustc.edu.cn
China and Pakistan have initiated a mega project with the name of CPEC (China‐
Pakistan Economic Corridor). CPEC projects in Pakistan are an initial stage, and
government officials and policymakers expected that CPEC projects are beneficial
for local Pakistani community, as this project generates several business and employ-
ment opportunities for local citizens. This research study examines the benefit of the
CPEC projects and its influence on local Pakistani citizen's living standards. Data
were collected online using the Google platform from 310 citizens, residing in all
provinces of Pakistan. In total, 310 samples were analyzed and reported, and for data
analysis, SPSS version 21 and AMOS 8.0 tools were used; the findings of this study
validate most of the hypothesis. Based on results, this study discussed the local
Pakistani community benefits with numerous factors such as perceived education,
income, and employment. Results of this study will guide the officials and
policymakers of CPEC to gain local citizen's support for the CPEC development pro-
jects and designs policies accordingly for the future projects. This study also provides
important guidelines for CPEC policymakers and officials.

1 | I N T RO D U CT I O N mega project that is dreamed by the Chinese government and will

As a developing country presently, Pakistan is facing multiple chal-
lenges involving economic, noneconomic, technology, education,
infrastructure, low skillful labor, high rate of taxes, and poor residential
assets (Khan & Ahmed, 2007). For that reason, government authorities
and policymakers are designing different development projects to
quicken the speed of economic growth. Among these ventures,
China–Pakistan Economic Corridor (CPEC) is one in all of them. CPEC
was officially declared when President General Pervez Musharraf met
with President Hu Jintao at Beijing in 2003 (Kousar, Rehman, Zafar,
Ali, & Nasir, 2018). It is the part of One Belt One Road (OBOR) project,
which is initiated by the Chinese Government in 2013 (A. Hussain,
2017a; E. Hussain, 2017b). OBOR is a mega project, which connects
Asia with Africa and Europe (Du & Zhang, 2018). CPEC is also the larg-
est project between Pakistan and China, which connects Kashghar
Xingjiang province with Gawadar port Baluchistan Pakistan (Chen,
Joseph, & Tariq, 2018). Specifically, CPEC is the name of multiple pro-
jects including energy projects, health centers, education institutes,
several economic zones, and interconnection of the road, train tracks
in all over the Pakistan (Tehsin, Khan, & Sargana, 2017). CPEC is a
be materialized by the Pakistani government, and its benefit will pos-
itively be transferred to the local Pakistani community (Kousar et al.,
2018). Nevertheless, research findings related to CPEC projects and
local community reactions and benefit are insufficient and controver-
sial (Liaqat Ali, Mi, Shah, Khan, & Imran, 2017; T. N. Ali, 2018). For
example, on one hand, few scholars found that local community of
Baluchistan and Khyber‐Pakhtunkhwa (KPK) province is despondent
with the development of Gawadar port project because local commu-
nity perceive that they are ignored by officials in employment and are
fearful before due to security issues in the area (Liaqat Ali et al., 2017;
T. N. Ali, 2018). On the other hand, several scholars and government
officials reported that CPEC is beneficial for local residents in all the
aspects because living standard of local residents will be changed
through the development of this mega project (F. Ali, 2017; Liaqat
Ali et al., 2018; Tong, 2015), and this yielded mixed results. Therefore,
local community perception and benefit is necessary to investigate the
support for CPEC project development.
In recent years, the importance of understanding local citizen's
benefit and needs has received scholarly attention. Local residence
benefit is highly discussed, and one of the most researched topics in

J Public Affairs. 2019;19:e1888. wileyonlinelibrary.com/journal/pa © 2018 John Wiley & Sons, Ltd. 1 of 12
https://doi.org/10.1002/pa.1888
2 of 12
different studies (Látková & Vogt, 2012; Miyakuni, Fujita, Koshiba, &
Rengiil, 2018; Peters, Chan, & Legerer, 2018), the underlying
understanding of residents' benefits and attitudes towards CPEC is
not yet comprehensive. According to scholars, for CPEC projects
accepted and supported by host communities (F. Ali, 2017; Liaqat Ali
et al., 2018), the host community should be taken into consideration.
If local citizens are not satisfied with the development of CPEC,
negative impact may occur in the region. Local residents are consid-
ered playing a major role in the development of CPEC and have a huge
influence on the success of the CEPC project. Policymakers claimed
that with the development of CPEC projects, local community will
be more benefited. For example, CPEC projects increase income,
generates employment opportunities, and increases the level of
education in the region. Additionally, policymakers widely employ
the studies of host community attitude in assessing the public
demands, acceptance, and living standard (Gillingham & Lee, 1999;
Holmes, 2003; Mcclanahan, Davies, & Maina, 2005). Therefore, it is
necessary to understand the local community profit, perspective
towards CPEC projects.
A growing body of literature implies that success to any project
from area people is normally compromised in situations where peo-
ple's interests and livelihoods are changed (Liaqat Ali et al., 2018;
Davis, Allen, & Cosenza, 1988; Fesenmaier, O'leary, & Uysal, 1996;
Yoon, Gursoy, & Chen, 2001). According to scholars, both Chinese
people and Pakistani residence benefited by CPEC project (Nabi,
Ullah, Khan, Ahmad, & Kumar, 2018), living standard of Pakistan's local
community as well as Chinese local community will be enhanced
through millions of employment opportunities, quality of education,
business opportunities, and easy access to big cities (Blanchard,
2018). Small local villages along with CPEC route will be connected
to big cities, where the native farmer can sell their products in satisfac-
tory prices and easily enhance their household income (F. Ali, 2017;
Liaqat Ali et al., 2017). Moreover, when local people benefited through
economical, education, income, and employment with the develop-
ment of CPEC projects (Liaqat Ali et al., 2018; T. N. Ali, 2018), they will
support more the development of CPEC project. Therefore, in the
present study, the local citizen's benefit‐based approaches are being
widely adopted regarding CPEC development projects.
The aim of the current study is to investigate the local residence
benefit with the development of CPEC project through data were col-
lected from local Pakistani community in all over Pakistan. The practi-
cal objective of this study is to provide suggestions and guidance for
policymakers in order to support the integration of the local residents
into the development process of CPEC projects and thus, to enhance
their positive attitude towards CPEC development. The findings
suggest that the attitude of local people towards CPEC projects is
influenced by their benefits. Perceived education and employment
are found to exert a greater impact on the income of local people as
compared with perceived economic. This study contributes to existing
literature in several ways and also provides suggestions to
policymakers, to design policy keeping in mind the local community
benefits. First, we highlighted the China–Pakistan relations and
significance of CPEC projects in the region. Second, according to the
author's knowledge, it is the first study of CPEC, which is based on
the host community perceptions, benefits conducted all over Pakistan.
KANWAL ET AL.
Third, this research study will extend knowledge of local people
regarding CPEC projects including education institutes, business,
infrastructure, employment opportunities, and how these project will
change their future as well as beneficial for the whole region. Fourth,
the findings of this research study will suggest the policymakers and
officials gain local citizens support for the CPEC project and develop
policies accordingly keeping in mind the local citizen's benefit for the
future projects. Consequently, on the basis of literature and past stud-
ies, we develop a model, which reflects the local citizen's perceptions
and benefits related to CPEC development projects. Figure 1 reflects
our conceptual model, which we develop in the following sections.
This study is outlined as follows: Section 2 briefly elaborate
theoretical background and hypothesis development related to CPEC.
Section 3 describes the research methodology in detail. Section 4
describes the results of the study. Section 5 provides discussion,
limitation, and contribution of study. Section 6 shows conclusion of
the study.
2 | THEORETICAL BACKGROUND AND
H Y P O T H E S E S DE V E L O P M E N T S
2.1 | CPEC and China–Pakistan relationship
China–Pakistan friendship is called the friendship of all the weathers.
The Pak–China relationship has grown steadily since the 1950s, and
now, the two countries privilege a deep friendship. Pakistan accepted
China as an independent country, and in 1951, their formal two‐sided
relations started. Since 1960, Pak–China relationship has developed
steadily, and currently, both the countries privilege a deep relationship.
Recently, Chinese president China Xi Jinping visited Pakistan in April
2015. On this occasion, Xi stated, “this will be my first visit to Pakistan,
but I feel as if I am going to visit the home of my own brother” (Tharoor,
2015), this shows the friendly relations between both countries.
Since many years, Pakistan is struggling for high‐economic devel-
opment. However, Pakistan recently has great progress in economic
stability, though more necessary steps are still required to put Pakistan
economically strong. On September 7, 2013, the Chinese President Xi
Jinping came to visit Kazakhstan, and he proposed the building of a
Silk Road Economic Belt, which linked the Pacific Ocean to the Baltic
Sea by a Trans Eurasian Project (Afzal & Naseem, 2018), Further, in
April 2015, the president of China Xi Jinping officially inaugurated
CPEC with a total cost of 46 billion USD (Liaqat Ali et al., 2018),
but its worth has increased to $62 billion in 2017 (Siddiqui, 2017).
CPEC project is the part of OBOR, and it consists of multiple projects,
which link China and Pakistan. For example, CPEC project connects
Chinese region Kashghar, Xinjiang province with Pakistani region
Gwadar, Baluchistan province through 2,700 km road, and railway line
(Liaqat Ali et al., 2018).
Currently, under CPEC development, several projects are in prog-
ress including 1,000‐MV solar power in Punjab, 870 in Khyber
Pakhtunkhwa, and three wind power projects in Sindh (Bhattacharjee,
2015). Consequently, until now, nearly 21 projects on energy produc-
tion together with coal has been started, and if these mega projects
completed on time, then 10,400‐MV energy will be available by March
KANWAL ET AL.
FIGURE 1 Proposed research model
2018 (Kousar, Rehman, Zafar, Ali, & Nasir, 2018). According to offi-
cials, Several CPEC projects will be completed till December 2019.
For example, Karachi to Lahore 1,100‐km long motorway, up grada-
tion of Karakorum highway between Rawalpindi and Khanjrab, Rail-
way line between Karachi and Peshawar. This super infrastructure
not only provides an easy link of Pakistan with China but also expands
the connectivity to India, Iran, and Afghanistan (Ranjan, 2015).
2.2 | Perceived economic and perceived income
Recently, the economic crises in Pakistan enable policymakers and
government officials to propose several economic policies and pro-
jects to stable poor economics of the country. Perceived economic is
outlined as any change that may have a positive or negative effect
on the country or local community (Liaqat Ali et al., 2018). Afzal and
Naseem (2018) argued that the success of any project based on the
economic growth of the local community or country. CPEC projects
are considered as economic game changer for Pakistan and local com-
munity (Melecky, Roberts, & Sharma, 2018). According to officials of
both the countries, 27 economic zones will be developed under CPEC
in all over the country (Munir, Khalid, & Latif, 2018). Iqbal and Malik
(2018) asserted that industrialization unit with the development of
the CPEC will help in the rehabilitation of Pakistan's economy. Fur-
ther, Ramay (2016) reported that an annual economic growth rate of
Pakistan will be increased at about 2% with the development of CPEC
project. In this situation, CPEC projects are critically necessary for
Pakistan to overcome economic and energy problem (Maqsood, 2018).
The basic aim of CPEC is to provide huge benefits to the Pakistani
and Chinese local community. Perceived income has been found to be
positively related with resident's attitude. Haralambopoulos and Pizam
(1996) specified the positive relationship between the income of citi-
zens and positive attitude. Furthermore, scholars and CPEC officials
reported that economic stability of Pakistani local community will
grow with the development of CPEC projects (Liaqat Ali et al., 2017;
Liaqat Ali et al., 2018; T. N. Ali, 2018; Maqsood, 2018) because CPEC
provides numerous opportunities for the local community to start
their business. For example, the local community can begin small
industries, hotels, workshops, and supply agriculture items along with
CPEC routes (Liaqat Ali et al., 2017; Nabi et al., 2018), which may have
directly related to the income of local residents. Earlier studies also
found that infrastructure development projects have a significant
impact on host community (Asomani‐Boateng, Fricano, & Adarkwa,
3 of 12
2015; Hensher, 1998) as it enhances the income, enhances the
economic, and removes poverty. Additionally, officials and
policymaker argue that CPEC projects not only benefited the regional
domain but also benefits to the local community of Pakistan (Hassan,
2018). In line with this connection, it is observed that the economy
of Pakistan will establish and may have a direct impact on the income
of local residents. Therefore, on the basis of literature support, we
argued that CPEC projects establish the economics of Pakistan, and
the income of the local community also increases.
H1. Perceived economic stability with the develop-
ment of CPEC projects is positively associated with
the perceived income of local citizens.
2.3 | Perceived education and perceived income
Currently, the education situation is a critical problem in Pakistan.
Education not only plays a major role in the economic growth of the
country but also improves the income of local residents. Previous
research studies have found that infrastructure development like
education institutes transport has significant impacts on the local
communities' education (Asomani‐Boateng et al., 2015). Specifically,
education of the host community is associated with the travel time.
For example, Haq and Farooq (2016) argued that in backward areas,
the main reason for poor‐literacy rate is less of education institutes
and long‐travel time. Similarly, Mattson (2011) investigated the rela-
tionship between travel time and education of the host community
and reported that education of native people is related with the edu-
cational institutes and travel time. Smith (2001) also reported that
with the development of CPEC project like education institutes and
infrastructure, travel distance will be reduced. Pakistani government
officials expressed the hope that several development projects of
CPEC in all over Pakistan would help to reduce the poverty rate and
enhance the income of local people of Pakistan. Specifically, the only
purpose of these mega projects is harvested by encouraging the
education of the local community.
Chinese officials and Pakistani policymakers are expecting that
CPEC development projects provide the quality of education in the
area (Barrios, 2008). For example, universities collaboration has been
also proposed under CPEC; an agreement on collaboration between
National University of modern languages of Pakistan and Chinese
Xinjiang Normal University has been signed. Numerous researchers
proposed significant relationship between standard of education and
4 of 12
individual income (Acemoglu & Pischke, 2001; Løken, 2010;
Magnuson & Shager, 2010), as higher quality of technical education
enhances the capacity of an individual in gaining professional exper-
tise, knowledge (Kim & Sherraden, 2011; Kudasheva, Kunitsa, &
Mukhamediyev, 2015), and may be directly related to income.
Additionally, education is one of the influencing factors, which reduces
poverty in the society (Kudasheva et al., 2015). Therefore, on the basis
of literature support, we argued that with the development of CPEC
projects, educational institutes will enhance the quality of education
and income of the local community.
H2. Perceived education of local citizens is positively
associated with the perceived income of local citizens.
2.4 | Perceived employment and perceived income
Like other developing countries, the unemployment ratio in Pakistan
increases simultaneously with the growth of population. CPEC is a
mega project, which will reduce the poverty rate in Pakistan by provid-
ing millions of jobs in different sectors (Chen et al., 2018). For exam-
ple, CPEC projects include the textile industries, energy projects,
construction of large dams, and generating road infrastructure and
railway lines, which may generate millions of employment opportuni-
ties for local residence (Liaqat Ali et al., 2018). Further, recently in
Qasim port, Coal Power Project employed thousands of engineers.
The official document showed that near June 2017, about 30,000
Pakistani local professionals including engineers, doctors, manage-
ment, and policy experts, information technology experts are being
employed in numerous CPEC projects in all over the Pakistan (Kousar
et al., 2018).
Recently, the link between employment ratio and income exam-
ined by various scholars in different directions. Particularly, scholars
conveyed that income of local community is based on the employ-
ment ratio (Coelli, 2011; Oreopoulos, Page, & Stevens, 2008). For
example, Page, Stevens, and Lindo (2007) examined the impact of
employment on individual income and confirmed that employment
is significantly associated with the income. Consequently, it is being
expected that CPEC project will produce millions of employment
openings for Pakistani local community in different sectors including
real estate, education, construction, agriculture, fisheries, cottage
industry, and in tourism sector (Liaqat Ali et al., 2018; Zia & Waqar,
2018), and enhanced employment ratio increases the income of the
host community and remove the poverty from society. In addition,
Gilgit Baltistan, Northern area and KPK of Pakistan is famous for
tourism. The Chinese investment through CPEC would play a major
role in attracting the tourists from all over the country as well as from
other states. Improvement in tourism increases the job opportunities
and income of local residents as well. For example, host community
starts a small business like restaurants, shops, and sell their local
product to foreign tourists. With the above literature analysis, it can
be summed up that CPEC projects would have a positive impact on
the local community income, through employment, infrastructure
development, and small business. Therefore, this study proposes the
following hypothesis:
KANWAL ET AL.
H3. Perceived employment of local citizens is posi-
tively associated with the perceived income of local
citizens.
2.5 | Mediating role of perceived employment
In Pakistan, the occurrence of unemployment rises simultaneously
with the growth of population. One of the main reasons behind the
unemployment ratio in Pakistan is less number of industries. Due to
the energy crisis, Pakistan has slow‐paced industrialization. With the
completion of CPEC projects, it is expected that Pakistan will over-
come the energy problem, and local investors will be back in the coun-
try. According to scholars, CPEC route will work as energy corridor
from Xinjiang, China, through Baluchistan, Pakistan and Middle East
(Xie et al., 2015). With easy access to global market, Pakistan's large
and small industries will grow (Zia & Waqar, 2018), which generates
thousands of jobs for local residents. Specifically, CPEC creates
several employment opportunities not only for highly skilled workers
but also for low‐skilled workers.
We proposed that CPEC projects have the potential to stable the
broken economy of Pakistan, but its successful implementation also
economically benefited the local community. CPEC infrastructure
projects provide easy accessibility to remote markets and enhanced
investment in backward areas of Pakistan. It will generate new
employment and labor markets to provide the host community with
decent work where the local community can find a good job and
enhance their income. Specifically, CPEC increases the income of the
local community through employment and business. CPEC projects will
also produce revenue, which economically strengthens Pakistan. In
addition, several industries and economic zones are the part of the
CPEC project, which will reduce the existing economic crises and
increases the employment opportunities, which may directly influence
the income of local residents. Therefore, it is concluded that CPEC
projects generate several employment opportunities and increase
the income of residents. Hence, this study outline the following
hypothesis:
H4. Perceived employment mediates the relationship
between perceived economic and perceived income
of local citizens.
It is a common approach that unemployment reduces the income
and weak future. Employment directly associated with the education
and income. An individual with better employment can purchase good
quality food and standard education for the youngsters. The reason
behind the poor‐literacy rate in Pakistan is unemployment of parents.
Parental job directly associated with the children education. Page
et al. (2007) investigated the influence of parent employment on chil-
dren education and found that unemployment reduces the income,
which causes unaffordability of children's fees, books, and other school
charges that directly affect children education. With the implementa-
tion of CPEC projects, it is also assumed that offices of multinational
organizations will also be launched within Pakistan, where thousands
of local community employed in different jobs. Further, infrastructure
enhancement increases the urbanization and designing, which
KANWAL ET AL. 5 of 12

strengthen the real state. In the perspective of present literature, it is TABLE 1 Demographic information of the samples
summarized that CPEC projects generate several employment N %
opportunities and increase education ratio, which affects the income
Gender
of the children; therefore, current study proposed the following
Male 193 64.3
hypothesis:
Female 107 35.7
H5. Perceived employment mediates the relationship Age
between perceived education and perceived income 21–30 years old 197 65.7
of local citizens. 31–40 years old 94 31.3
41–50 years old 9 3.0
Education
3 | R E S E A R C H M ET H O D O L O G Y Bachelors/undergraduate 73 24.3
Masters/graduate 180 60.0
3.1 | Sample and data collection Doctoral degree 47 15.7
Province
To achieve the objectives of this study, a survey method was used. Sindh 103 34.3
We adopted the survey method in this study rather than interview Punjab 60 20.0
and experiment because the survey technique predicts the behavior KPK 34 11.3
and the associations between constructs (Newsted, Huff, & Munro, Baluchistan 48 16.0
1998). Based on past literature, several indicators was adopted for Gilgat 29 9.7
each variable and redesigned according to the purpose of the study. Islamabad 26 8.7
In this study, the target sample is Pakistani community from all over Tenure
Pakistan. In total, 310 responses were collected from the local people, <1 year 52 17.3
including employees, university and college professors, teachers, 1–3 years 83 27.7
university students, and official staff, who are local residents of the 3–5 years 82 27.3
different area aged more than 18 years. We decided to gather data >5 years 83 27.7
from all over Pakistan as CPEC projects already started in Pakistan.
Due to lack of awareness and literacy rate in Pakistan, this study only
disagree” to “strongly agree.” As scholars also suggest that the 5‐point
focused on educated community and major cities of Pakistan
Likert‐type scale is easy to understand as compared with the 7‐point
including Karachi, Hyderabad, Sukkur, Islamabad, Lahore, Gawdar,
Likert scale (Cheng & Chen, 2015; Dawes, 2008). The variables that
and Peshawar. Several respondents of this study were employees,
are used in this model perceived income, economics, education, and
which are already working on different CPEC projects, for example,
employment, whereas age, education, tenure, province, and gender
we gathered data from employees Gwader port Baluchistan, Karachi
are used as control variables. At the individual level, we controlled for
to Hyderabad motorway, and Thar coal project in Sindh. First, a survey
gender, age, and educational level because these influence actual
questionnaire was reviewed and modified by three expert professors
behavior (Madjar & Oldham, 2006). The instrument and scale of
to confirm the reliability, clarity, and understanding of the respondents.
perceived income contain nine items. The scale measures effect of
Second, a pilot study was conducted on 50 respondents, and the result
the development of CPEC projects to local citizen's income. The scale
was found satisfactory. In the final data set, we removed these 50
was adopted by other studies (Liaqat Ali et al., 2017; Ap & Crompton,
respondents. Data were gathered via the internet through survey
1998; Barrios, 2008; Dambrun, Taylor, McDonald, Crush, & Méot,
websites because respondents were living in different remote areas, in
2006; Guimond & Dambrun, 2002; Milman & Pizam, 1988; Pettigrew
almost all the provinces of Pakistan including capital Islamabad.
& Meertens, 1995; Šegota, Mihalič, & Kuščer, 2017; Stylidis, Biran, Sit,
To encourage response, we made follow‐up calls and also used social
& Szivas, 2014; Viviers & Slabbert, 2012). The instrument and scale of
media platforms such as Facebook, Wechat, and Whatsapp and sent
perceived economics contain five items. The scale measures in terms
reminder emails after we sent out the questionnaires. Over a period of
of economic benefit and business opportunities for native people with
10 weeks, we got 310 respondents. An online version of the question-
the development of CPEC projects. The scale was adopted by other
naire was prepared, so there was no information about the missing
studies (Liaqat Ali et al., 2018). The instrument and scale of perceived
data or number of the uncompleted questionnaires. Table 1 shows the
education contain eight items. The scale measures in terms of educa-
detail of the demographic information of the samples.
tion quality and opportunities of education for native residence with
the development of CPEC. The scale was adopted by other studies
3.2 | Measures (Liaqat Ali et al., 2017; Ap & Crompton, 1998; Barrios, 2008;
Goo, Kishore, & Rao, 2000; Milman & Pizam, 1988; Šegota et al.,
This study consisted of four variables in total. The instrument and scales 2017; Tanriverdi, Konana, & Ge, 2007; Viviers & Slabbert, 2012).
used in the study were adapted from the past literature that has been The instrument and scale of perceived employment contain six items.
well established in their respective domains. The measures were The scale measures in terms of employment opportunities for local
scored by using a five‐point Likert‐type scale ranging from “strongly people with development of CPEC projects. The scale was adopted
6 of 12 KANWAL ET AL.

by other works (Liaqat Ali et al., 2017; Ap & Crompton, 1998; Barrios,
2008; McGehee & Andereck, 2004; Milman & Pizam, 1988; Quinn,
1999; Stylidis et al., 2014; Tanriverdi et al., 2007; Venkatesh, Zhang,
& Sykes, 2011; Viviers & Slabbert, 2012; Woo, Kim, & Uysal, 2015;
Zhu, Kraemer, Gurbaxani, & Xu, 2006). All the scales and measurement
items are shown in Appendix A.
4 | ANALYSIS AND RESULTS
4.1 | Common method bias
All the data were gathered from a single source, and the common
method bias was tested (Podsakoff, MacKenzie, & Podsakoff, 2012).
In the current study, several methods were used to confirm the
common bias problem. First, Harman's single‐factor approach was
used on all the items of all variables. In result, 17 factors generated
with eigenvalues >1.0 and accounted for 92.80% of the variance.
The first factor described only 28.15% of the variance, which is less
than 50%. Second, a common latent factor approach is employed
to check the validity of data (Podsakoff et al., 2012; Podsakoff,
MacKenzie, Lee, & Podsakoff, 2003). Initially, standard regression
weights were analyzed through confirmatory factor analysis (CFA).
Second, a common latent factor is incorporated in the research model
and again conducted CFA. In the end, by comparing the regression
weights of both analysis and found no dominant factors rising from
the results. These results show that this study is not affected by
common method bias. Third, Table 3 show intercorrelation of all the
constructs (r < 0.9), as suggested by Pavlou and El Sawy (2006).
Therefore, together, these findings confirm that common method bias
does not seriously influence the outcomes.
4.2 | Measurement model
The fit of the model was analyzed to clarify the arrangement of the
entire set of relationships, using three types of goodness‐of‐fit mea-
sures, incremental fit measures, absolute fit measures, and parsimoni-
ous fit measures, as suggested by Hair, Black, Babin, Anderson, and
Tatham (1998). The GFI (0.86) was lower than the recommended level
for absolute fit, but the incremental fit measures and parsimonious fit
measures indicate that the model is marginally acceptable because the
chi‐square (1.79) for the model was found to be within acceptable
threshold limits of 1.0 to 2.0 or 3.0. Thus, Table 2 indicates the overall
model fit measures is acceptable.
4.3 | Reliability and validity
In this study, we also applied the different analysis techniques to
check survey questionnaire for reliability and validity. For this purpose,
validity, reliability, average shared variance, and maximum shared
variance tests were examined. The standard factor loadings of each
item were greater than the threshold value 0.60 as recommended by
Fornell and Larcker (1981). A Cronbach's alpha, the composite reliabil-
ity of constructs, and the average variance extracted (AVE) were also
computed to verify the convergent validity. Table 3 indicates that
Cronbach's alpha ranged from 0.88 to 0.97, which is above the
benchmark value of 0.70 proposed by Hinkin (1998). Composite

TABLE 2 Indices of model fit

Measures Recommended level Research model
Absolute fit measures
Chi‐Square/df (P value) P > 0.05 618.85/344 (P = 1.79)
Goodness of fit index (GFI) Higher (>0.9) 0.86
Standardized RMR Lower 0.04
Root mean square error of approximation (RMSEA) <0.08 0.05
Incremental fit measures
Nonnormed fit index (NNFI) >0.9 0.96
Adjusted goodness of fit index (AGFI) >0.8 0.84
Normed fit index (NFI) >0.9 0.92
Parsimonious fit measures
Normed chi‐square 1.0–2.0/3.0 1.67
Comparative fit index (CFI) High value (>0.9) 0.96

TABLE 3 Results of confirmatory factor analysis

Variable name Items Loading CA CR AVE MSV ASV

Perceived economics 5 0.84–0.93 0.94 0.93 0.78 0.02 0.01

Perceived education 8 0.62–0.98 0.97 0.97 0.83 0.02 0.01
Perceived employment 6 0.69–0.82 0.88 0.88 0.55 0.07 0.02
Perceived income 9 0.66–0.81 0.91 0.91 0.54 0.07 0.03

Note. ASV: average shared variance; AVE: average variance extracted: CA: Cronbach's alpha; CR: composite reliability; M: mean; MSV: maximum shared
variance; SD: standard deviation; loading: standardized loading; Discriminant validity: AVE > MSV.
KANWAL ET AL. 7 of 12

TABLE 4 Means, standard deviation, and correlations

Variable M SD 1 2 3 4 5 6 7 8 9
1. Perceived economics 2.48 0.96
2. Perceived education 3.43 1.23 −0.05
3. Perceived employment 4.08 0.83 −0.08 0.02
4. Perceived income 4.13 0.82 0.02 0.10 0.26
5. Province NA NA 0.08 −0.08 0.05 0.19 NA
6. Tenure NA NA −0.09 0.03 −0.02 0.09 −0.01 NA
7. Education NA NA −0.03 0.06 −0.02 0.06 0.04 0.25 NA
8. Age NA NA 0.06 0.06 −0.05 0.19 0.02 0.03 0.08 NA
9. Gender NA NA 0.09 −0.03 −0.22 −0.35 −0.10 0.04 0.03 0.03 NA

Note. The mean is assessed based on average factor scores; standard deviation (SD) and correlations are from the second‐order CFA output. The diagonal
elements are the square root of the AVE. M: mean; SD: standard deviation.

reliability results ranged from 0.88 to 0.97 and were above the thresh-
old value of 0.70 proposed by Nunnally, 1978. The AVE values ranged
from 0.54 to 0.83 and were higher than the 0.50 benchmark value
proposed by Bagozzi and Yi (1988) and higher than the maximum
shared variance. Additionally, all values of the average‐shared variance
were less than the maximum shared variance. These findings imply
that the measurement model has good convergent validity. In addition,
Table 4 indicates that the square roots of the AVEs for all constructs
were higher than the correlations between constructs, which validated
the discriminant validity of the model.
4.4 | Structural models
The findings of this study verified most of the hypotheses. The results
of analysis indicate that perceived economic has insignificant relation-
ship with perceived income (β = 0.02, P > 0.05) and perceived
employment (β = 0.08, P > 0.05). H1 and H2 are rejected. Consistent
with H3 and H4, the perceived education has significant effect on
perceived employment (β = 0.19, P < 0.05) and perceived income
(β = 0.14, P < 0.05). H3 is supported. Further results verified perceived
employment is positively related with perceived income (β = 0.26,
P < 0.01). H5 is also validated. In summary, H3–H5 are supported at
this stage, whereas H1 and H2 are rejected. Results of structural equa-
tion modeling is shown in Figure 2.
4.5 | Mediating effect testing
In this study, mediating effect of perceived employment was analyzed
using two different methods. First, the bootstrap sampling method
was used (bootstrap sample size = 5,000) recommended by
MacKinnon, Lockwood, and Williams (2004) to generate the asymmet-
ric confidence intervals (CIs) for indirect relationships. Compared with
traditional models like the Sobel test, the bootstrap CI approach
generates a relatively accurate estimation because it produces asym-
metric CIs for indirect relationships by using the respective distribu-
tions of two regression coefficients that comprise a product term.
Table 5 shows the insignificant mediating effect of perceived educa-
tion in the relationship between perceived economic and perceived
income because the CI (−0.060, 0.0100) include zero. Thus, H2 is
rejected. The results also indicate the mediating effect of perceived
education in the relationship between perceived education and per-
ceived income because CL (0.185.0.121) did not contain zero. Thus,
H3 is also supported.
Second, this study also used the method proposed by Baron and
Kenny (1986), to test whether the supported mediating effects were
full or partial. Three kinds of relationships are significant for a valid
mediating effect: (a) The relationship between independent variable
and the dependent variable, (b) the relationship between independent
variable and mediator, and (c) the relationship between the mediator
and dependent variable controlled by the independent variable.
If the relationship between independent variable and dependent
variable controlled by the mediator is insignificant, the relationship is
fully mediated. Otherwise, it is partially mediated. Table 6 shows the
results of the Baron and Kenny mediation test, which supported the
hypotheses. This result is consistent with that of the bootstrapping
mediation test, indicating the robustness of the hypothesis testing.
With regard to the type of mediation, the results indicate that
mediating effects of H3 are full mediation. However, H2 is shown

FIGURE 2 Results for structure modelNote:

*p < 0.05 and ** < 0.01
8 of 12 KANWAL ET AL.

TABLE 5 Results of the bootstrapping method for mediation

Effect of IV Effect of M Direct Indirect Total

IV M DV on M (a) on DV (b) effect (c') effect (a*b) effects (c) 95% CI Result

H2 PEC PEM PINC 0.07** 0.261 0.036 0.019 0.168** (−0.060,0.010) Not Supported
H3 PED PEM PINC 0.237** 0.239** 0.122* 0.056* 0.178** (0.185.0.121) Supported

*shows significance at the 0.05 level, and

**shows significance at the 0.01 level.

TABLE 6 Results of the Baron and Kenny method for mediation

IV M DV IV‐DV IV‐M IV + M– > DV

IV‐DV M‐DV Mediation

H2 PEC PEM PINC 0.020* 0.08** 0.04 0.264 NO

H3 PED PEM PINC 0.145* 0.191* 0.10 0.242** Full

Note. DV: dependent variable; IV: independent variable; M: mediator; PEC: perceived economics; PEM; perceived employment; PINC; perceived income.

no any mediating effect, which is also consistent with the
bootstrapping mediation test.
5 | D I S C U S S I O N , L I M I TA T I O N , A N D
IMPLICATIONS
5.1 | Discussions
The objective of the current study is to analyze the local residence
benefit and perspective related to CPEC projects in all over Pakistan.
Based on the past related studies, a research model was proposed.
Data were obtained online from all provinces of Pakistan included
capital Islamabad. The results of this study validated most of the pro-
posed hypothesis, showing the local community interest for the devel-
opment for CPEC project. However, current data did not support
some hypothesis. Specifically, findings indicate the insignificant effect
of perceived economic on perceived income and mediating effect of
perceived employment. That is, against our assumption, thus, H1 and
H2 are not supported. However, the effect of perceived education
on perceived employment and perceived income shows the significant
relationship that is according to our arguments. This study hypothe-
sized significant relationship of perceived education with perceived
income and perceived employment mediates the relationship between
perceived education and perceived income. As policymakers expecting
that several local business opportunities, job opportunities would be
generated for local Pakistani residents, and this financial benefit
will attract the local community towards CPEC development projects
(L Ali, Mi, Shah, Rafiq, & Ibrar, 2016; Asomani‐Boateng et al., 2015).
For example, Liaqat Ali et al. (2018) also proposed that CPEC project
such as road and transport infrastructure provides easy access to the
host community to big cities, and local citizens will be able to enhance
their income by doing several businesses. Additionally, there are
numerous education‐related projects, which are directly and indirectly
associated with CPEC. For example, universities and vocational train-
ing centers were also developed with the name of CPEC projects.
CPEC connectivity such as road and railway tracks will link the rural
areas with the big cities, where local citizens will be able to get quality
of education. Education will increase the local citizen's income by
providing more opportunities, and local community will be able to
compete in the global market. Specifically, higher education ratio
provides awearence among local residents, and they understand the
importance of this mega project. Past studies also have shown a
positive association between education of citizen and income (Kim &
Sherraden, 2011; Løken, 2010).
The results produced in the existing study also showed the
positive effect of perceived employment on perceived income as pro-
posed in H5, which is in line with past research studies (Barra et al.,
2018; Coelli, 2011; Stevenson, 2018). As, officials of CPEC declared
that millions of employment opportunities will be generated in
different CPEC projects for local residents, which will enhance the
resources of the local community as well living standard. As, several
local Pakistani residences already engaged in different CPEC projects
such as energy sectors, Thar coal, Karachi to Peshawar motorway, Port
Qasim project, and training institutes.
In summary, H3–H5 are supported. However, H1 and H2 are
rejected. There are some reasons for the rejected hypothesis. First,
data were collected using online using google platform maybe respon-
dents unable to understand the survey questions. Second, data were
collected almost in the big cities of Pakistan. In H1, the study pro-
posed a positive relationship between perceived economic and
income of local people. Similarly, H2 also proposed significant relation
between perceived economic and perceived employment. As it is
assumed that citizens who are living in big cities are someway
economically better as compared with residents living in rural areas.
Perhaps to modify the survey questionnaire and focused the respon-
dents from rural areas produce other interesting findings. Obviously,
this issue should be resolved in the future research.
5.2 | Implications
The findings of the current study have a major contribution in existing
literature, as this study, clarifying local residence benefits with the
development of CPEC in all over Pakistan. First, results of this study
confirmed that local Pakistani citizens understand that the development
KANWAL ET AL.
of CPEC projects in Pakistan will produce millions of jobs, promote
business, and enhance the quality of education and infrastructure,
which are directly associated with the income of local people.
Second, this study increases the knowledge associated with CPEC pro-
jects. Despite the fact that CPEC projects are still in the initial
stage, research on CPEC is very limited. For example, Liaqat Ali
et al. (2017) claimed that more research is required associated
with CPEC projects all over Pakistan. This study attempts to
address this research gap by exploring the beneficial factor that
influences the host community living standard. The findings imply
that the local community is very interested in the development of
CPEC, and these findings are consistent with past literature also.
For example, Yoon et al. (2001) conducted a study related to local
community benefit in promoting tourism development and found
that the host community supports tourism development due to its
vast benefit.
Third, results of this study also recommended that officials of
CPEC should pay some considerable attention to building local resi-
dence confidence associated to CPEC projects because some citizens
of Baluchistan and KPK province are against the development of
CPEC. Government and policymakers should arrange seminars, train-
ing, and workshop to inform the citizens about the importance of
CPEC projects in the region. The government of Pakistan can also
utilize media including social media application such as Facebook
and Twitter to publicize CPEC benefits among local residents. When
the local community understands the importance of CPEC project,
they will provide more support for development.
5.3 | Limitations
For future research, these research studies also have some sugges-
tions for scholars. First, in this study, we investigate the local resi-
dence benefit using few factors that may influence the local
community living standards. Scholars can also investigate the other
factors that may be related to the local citizen's benefit. Second, this
study based on Pakistan, in future scholars, can use this same concep-
tual model to conduct the same research study in China, as both the
local residence of Pakistan and China are beneficial of CPEC project.
Additionally, China Xinjiang province is also a backward region as
compared with other province and local community, mostly belongs
to agriculture sectors by undertaking this project rapid progress that
will occur, which will be in favor of China (T. N. Ali, 2018). Scholars
can conduct the future study in China especially in Xinjiang province.
The samples of this study contain local residence of Pakistan such as
employees and another local resident. In future, scholars also included
the business community as respondents, to examine the benefits of
CPEC for business people. Additionally, entrepreneurship study is
also needed to conduct related to CPEC because according to
policymakers, there are more entrepreneurship opportunities available
for the local community as well as for foreign investors (Joshi, 2018).
Scholars can also conduct a comparative study and highlighted the
local residence benefit in both countries such as China and Pakistan.
Third, this study only examines the positive aspects of CPEC on the
living standard of the local community, whereas in future studies,
9 of 12
scholars can also examine the negative effect of CPEC projects
such as social, cultural, and environmental effects on the local
community. Fourth, India is a neighbor country and is totally against
the development of CPEC projects (S. Ali, 2015), so scholars can
include Indian local community to explore the impact of CPEC on
Indian community.
According to the scholar, for successful completion and imple-
mentation of CPEC projects quality of work, strict security and true
spirit are required on both sides such as China and Pakistan (Hussain,
2018). A future scholar can also investigate the security issues
related to CPEC project. CPEC projects will change the Pakistan geo-
graphic location, business community, and private organizations
required to come onward and play their role in making CPEC projects
successful.
6 | CO NC LUSIO N
The purpose of the existing study was to explore the local community
benefit with the development of CPEC project in Pakistan. The results
confirmed that local citizens understand the benefit of CPEC, and they
are interested in the smooth implementation of CPEC. Most of the
hypotheses supported positive links and confirmed that the host com-
munity will be benefited by CPEC project. According to the officials of
both the countries, development of CPEC project benefits the local
citizens of both the countries through education, employment, and
business (Makhdoom, Shah, & Sami, 2018; Suleri, 2018). Therefore,
officials of both the countries expected that fast and smooth imple-
mentation of CPEC projects will enhance the business and energy
cooperation, which enhance the economy of China and Pakistan. So,
it is assumed that billions of local residents of both the countries
benefited by the successful implementation of the CPEC project.
Further, Pakistan's government believes that although CPEC will
change the fate of Pakistan and the whole region, the realization of
this project greatly depends on the continuous determination of both
countries. However, the Chinese government should also be in
contact with local communities to better accommodate local interests
so that more Pakistani citizens can benefit from the CPEC. Therefore,
this study concludes that the Pakistani community can reap the fruits,
associated with CPEC projects.
ACKNOWLEDGMENT
No potential conflict of interest was reported by the authors. There is
no any research funding or grant from any organization is associated
with this manuscript.
ORCID
Shamsa Kanwal http://orcid.org/0000-0001-5236-869X
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articles in international journal. His main research interests
include public management, environmental policy and environ-
mental management.
Abdul Hameed Pitafi is a PhD research scholar in School of Man-
agement (specialization in Information System) at the University of
Science and Technology of China, and presently in final year of
studies. He completed his Bachelor of Engineering (Computer Sys-
tem) from Quaid‐Awam University of Science and Technology
Nawabshah. He received his MS degree in Networks and Tele-

AUTHOR BIOGRAPHI ES communication from Mohammed Ali Jinnah University Karachi.

Shamsa Kanwal is presently enrolled in master's program towards He has more than 15 years of teaching experience. His current

the degree of Master of Public Affair (specialization in Public Man- focus of research work was in the role of information technology

agement). She has received BS (Math) degree from Sindh Univer- and people and how the adoption of various technologies is in

sity Jamshoro Pakistan. Her research interests include Social workplace. He has published over 15 publications in peer‐

Media, Social networking, and policy issues in developing coun- reviewed journals.

tries. She has published over eight publications in peer‐reviewed

journals.
Ren Chong is a associate professor in school of Public Affair in
University of Science and technology China, and the director of
environmental management research center. He published many
How to cite this article: Kanwal S, Chong R, Pitafi AH. China–
Pakistan economic corridor projects development in Pakistan:
Local citizens benefits perspective. J Public Affairs. 2019;19:
e1888. https://doi.org/10.1002/pa.1888

APPENDIX A
MEASUREMENT ITEMS

S Construct Items scale Scale

1 Perceived 5 1. CPEC will create more jobs for the area. Likert scale 1–5
economics 2. CPEC will make the economy strong.
3. CPEC leads to more investment in the area.
4. CPEC will improve living standard of the native people.
5.CPEC will create economic profits and businesses for native people
2 Perceived 8 1. CPEC will provide opportunity to get a quality education. Likert scale 1–5
education 2. Access to big cities through CPEC would create greater opportunities for quality education.
3. Betterment of family income with CPEC is ensured through getting education.
4. New educational institution are expected to be established under CPEC.
5. Road improvement encourages school enrollment especially among females.
6. The most fundamental societal needs like education are the main component of CPEC.
7. CPEC will play a positive role in the improvement and development of education.
8. CPEC will improve the quality of existing education.
3 Perceived 6 1. CPEC will generate employment opportunities in the area. Likert scale 1–5
employment 2. CPEC will create chances for a person to find a good job.
3. CPEC will generate new business opportunities in the area.
4. Employment wages will become better in CPEC jobs.
5. CPEC will provide employment and skills for improved livelihood opportunities.
6. More employment opportunities mean less crime.
4 Perceived 9 1. CPEC will increase the household income. Likert scale 1–5
income 2. CPEC will generate revenue in the local economy.
3. Feeder roads along CPEC will increase the economic activities, which lead to increase in income.
4. CPEC will improve the economic conditions of the area.
5. CPEC will improve living standard of the common people.
6. CPEC will cover current energy crises in the country, which lead to increase in family income.
7. Long‐term investments have positive economic consequences.
8. CPEC would mitigate the poverty across its lines.
9. CPEC will increase the business in the area, which increases the income of local people.