METHOD OF BUSINESS RESEARCH

JINNAH UNIVERSITY FOR WOMEN

THE IMPACT OF CPEC

ON ECONOMY OF
PAKISTAN
Submitted to: Miss Quratulain
Submission Date

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 Pakistans
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 Chinas Xinjiang province to rest of the world through Pakistans 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 Chinas 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 northwestern 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 GilgitBaltistan 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 Pakistans
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 Chinas 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 Chinas
needs in energy and developing its far west region and upgrading Pakistans
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 Chinas Kashgar to Pakistans
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 Pakistans 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 Chinas 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, PakistaniChinese 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
Islamabads 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 SubSaharan 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. Indias trade
with its neighbors is less than 3% of its total trade. These challenges have an
immense impact on South Asias 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
Chinas plan. ( Zainab Ahmed,2015)
Indias 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)
Pakistans 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 Pakistans 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. Pakistans
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 Pakistans
ambition of obtaining the strategic depth in Afghanistan and Central Asia.
However Gwadar Port provides both Pakistan and China to strengthen its security
vis--vis India. As it said that the security of Pakistan is adequately established by
developing relations with China to counter Indias 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--vis India in
the Arabian Sea. On the other hand a strong Indian navy and its presence in the
Arabian Sea pose threat to Pakistans 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--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 Pakistans 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 Pakistans 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 Chinas 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 ChinasXinjiang province to rest of the
world through Pakistans 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
Afghanistanalthough it is still too early to comment whether regional element of
the CPEC will become operational or notit 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 Irans Chabahar Port.
In October 2014, Indian Prime Minister Narendra Modis 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 Pakistans 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 sectariannationalist 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 Jundullaha sectarian insurgent group based and operating in Irans
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--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, Pakistans 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 Afghanistans future after the drawdown withdrawal to
the top of the Shanghai Cooperation Organizations 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 subcontinent. 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 Pakistans 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 Pakistans 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 theres 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 countrys 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 Pakistans
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 Pakistans 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 projects 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 Chinas 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

Political
Stability

Security

Geographical
Location

Route

Administratio
n

Relation with
Neighbor
Countries

China-Pak Economic
Corridor

Economy

Trades

Terrorism
Visionary leadership

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 Pakistans national life is security, both internal and external
i.e. countrys 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 Asias 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 Pakistans 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

accomplishment of this mega project?

are

conducting

bold

step

for

the

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)
b)
c)
d)
e)
f)

Stability
Number of business opportunities
Economic boost
Increment in employment
All of them
Any other_______________________________.

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

a) Countrys 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 countrys 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
Pakistans 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 countrys
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 projects 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 ports 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 Pakistans
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.