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DEPARTMENT OF MANAGEMENT
SCIENCES

Name: Moosa Hassan

Enrolment No: 02-111191-069
Class & Section: BBA 8A
Course Title: Ports Operations &
Management
Submitted to: Bushra Tufail
Question:
In Asia, Economic corridor development gained additional push after China’s initiative to
establish “China–Pakistan Economic Corridor (CPEC)” that is expected to hook up “Western
China to the Arabian Sea” through Pakistan as a flagship project of its “One Belt, One Road
initiative”. China will spend more than $55 billion in Pakistan under this project in energy
and other employment associated substructure development projects for a duration of 5-15
years. Establishing the “Belt and Road Imitative (BRI)” or “One Belt, One Road (OBOR)”
carries several advantages for China and Associated nations.Explain the importance of CPEC
and GAWADAR PORT according to geographical importance of Pakistan. [200+200 words]

ANSWER:
IMPORTANCE OF CPEC:
China-Pakistan Economic Corridor is a strategic economic project to enhance
economic connectivity between Pakistan and China. The impact of CPEC
related economic activities on overall energy consumption and its saving
potential for Pakistan by 2030. The aggregate energy consumption will be
approximately 41% higher in 2030 compared to 2013 levels. Energy
consumption in industrial and commercial sectors in 2030 will increase by
136% and 414% under this scenario. As Pakistan's economy is already facing
severe energy crisis, robust increase in economic activity and the energy
consumption is expected to have lasting impacts on the energy supply security
in the economy. Since Pakistan's existing electricity production is still
dependent on imported fuel with improper pricing of fuels and their exploitative
consumption. The billion dollars’ project will add much to the Gross Domestic
Product (GDP) of the country. The importance of CPEC is undeniable. The
project is infrastructure up-gradation centric, so it will improve by road
economic activities in the country. The real estate industry is growing rapidly in
Pakistan and providing livelihood to many people. With the ongoing projects of
CPEC, the real estate industry will reach new heights of progress. The reason
behind this is that the CPEC will improve the infrastructure of the country and
the real estate market links with that. Moreover, we see the importance of CPEC
in Gwadar where several real estate projects have already been initiated.
Pakistan is also located in the critical point of the BRI route. Due to its
geopolitical location, increasing population, and ease of access to seaports it has
become the most important country in terms of transportation for China. China
aims to open to East and West Europe and through Eurasia by using the Land
Silk Road via Pakistan. In addition, China seeks to expand trade with India, the
Gulf, East Africa, the Red Sea, and the Mediterranean countries by using the
Maritime Silk Road.3 China is making good use of this advantage and is
utilizing Pakistan against India, its regional rival. For China, if the CPEC
continues to develop properly, infrastructure that is needed in the undeveloped
regions of Pakistan will be built. Thus, this route will be a transit route carrying
Chinese goods. China views Pakistan as a new market with a population of 200
million. As a result, the CPEC project will make a new route arrangement
linking Eurasia, Latin America, and Africa. With BRI’s extension, the CPEC
project, China aims to provide common development, welfare enhancement as
well as trouble-free transportation and security for energy with other countries.
IMPORTANCE OF GWADAR:
Pakistan and China are working together to serve economically not only to the
nationals of their states but also to the region by developing Gwadar port. Both
states have joined hands to achieve long-term geo-economic advancements. China
and Pakistan are intended to connect Gwadar port and Kashgar city through
Karakorum Highway. Hence, the two comparatively diffident cities of respective
states will get the market approach and become regional trade hubs. When
Gwadar port will become fully functional it will provide China with huge
benefits. Earlier China’s shipping route was long and vulnerable to trade. The
route passes through Strait of Malacca and takes 45 days to achieve its destination
in Europe by means of the Middle East. This route: The Strait of Malacca is under
United States control, and it can be blocked anytime to destroy Chinese trade. In
such a scenario, the route via Gwadar port will prove as a blessing from heaven
for China. By the development of CPEC China trade route will become short. It
can its destinations only in 10 days and it will also be a safe route as Pakistan and
China are very good friends. Gwadar port will serve a major role as part of
China's ambitious Silk Road and Economic Belt. Pakistan became a member of
Shanghai Cooperation Organization (SCO) in 2015. Gwadar port when becoming
fully functional it will specifically challenge Dubai port as it will lose 70% of its
trade. Likewise, the port will also influence Chabahar port in Iran, as Gwadar port
is a natural biggest deep seaport in the world, here ships with large tonnage can
anchor easily. The geographic location of Gwadar port has played a significant
role to change the image of Pakistan at international level. The location of
Gwadar port at the crossroads of Central Asia, Middle East and the Persian Gulf
enhances the geostrategic and geo-economic significance of Gwadar port at world
level. The port, when becoming fully functional, will connect South Asia, Gulf
States, Central Asia, and China together. Gwadar port will provide a substitute sea
route to China, instead of Strait of Malacca.