China, in its flagship project CPEC, has invested more than $60 billion in Gwadar Port Pakistan, in its infrastructure and energy projects, and deep water port. This is extraordinary as compared to decades of Foreign Direct Investment (FDI) in Pakistan by other states. This investment in Pakistan has generated a debate whether this circulation of investment is an economic savior for Pakistan or a debt trap? Popularity of China Pakistan Economic Corridor (CPEC) in Pakistan engaged academia, the military and political leadership. Those who are in favor of this debate argue that CPEC has the ability to sustain and transform the economic prosperity of Pakistan. However some critics mentioned that it will more likely a debt trap for Pakistan and it will also pose a threat to the industrial base of Pakistan by the huge imports of China. This book extensively describes the economic progress between China and Pakistan, economic theory, infrastructure projects from the historical and contemporary world that are the main inspiration of this discussion.
To summarize, this book addresses and explains the CPEC, what it is, how much it will cost and what are its geographical locations and time wise evolution of the project are. It then places the CPEC into five important background contexts that are; the economic optimism the CPEC has generated in Pakistan; the friendship between China and Pakistan; the economic development of Pakistan since 1947; the evolution of China’s political economy since the death of Mao in 1976; and the global history of infrastructure projects. Finally, the author summarizes some of the key questions and findings in the chapters of the book. Moreover it introduces the theoretical concept of the leading sector and asks whether the expansion of one economic sector such as infrastructure or energy, can generate sufficient affects to other sectors to boost the economic growth of the country.
The author questions that whether the investment in public sector will help to flourish the private investment or whether spending in numerous projects will generate employment for local workers and demand for locally produced products. He also provide evidences about how to measure the success or otherwise of the CPEC using any precise method. In which he prescribed to use the list of descriptive statistics about the promises of the CPEC with the combination of admiring claims about the potential of the CPEC. However it’s too early to make any conclusion about the completion of CPEC. The most prominent feature of CPEC is its Special Economic Zones (SEZs) that are the concrete evidence of the successful completion of CPEC. This book outlines the theoretical and empirical benefits of the SEZs as practiced in other countries and in the other SEZs in Pakistan other than CPEC.
Is also made a case study about what is happening in the Western part of China is of much importance to the impacts of the CPEC on Pakistan. While the CPEC is about infrastructure and FDI, these processes are influenced by overall trade relations between China and Pakistan. The case studies in chapter 3 and 6 of the book revealed some important lessons for Pakistan. An industrial policy is essential to promote both domestic economic effects from infrastructure investment and industrialization from SEZs. The economics of neoliberalism are structured around the assumption of economic development in Pakistan. This book also examines the economic theory regarding relevant market failures; reviews some historical and contemporary examples of industrial policy; studies the recent calls in Pakistan for an industrial policy to complement the investments of CPEC; investigates at the politics of infrastructure; and examines how the CPEC will be financed.
This book provides very vast knowledge about the both sides of dialogue about CPEC whether it is beneficial for Pakistan or otherwise. This book is framed in the form of a debate between the optimists and the opponents of the CPEC. On the one side there are the CPEC idealists who see long-term commitment and the size of the CPEC as signaling a new opportunity for Pakistan to realize its essential potential, and an economic corridor promoting bilateral connectivity and investment, economic and trade, logistics and people to people contact for regional connectivity. On the contrary there are the CPEC critics who see China’s investment in Pakistan as a debt trap for Pakistan and to gain the control of its resources, policy making and geography. This book describes the very participation of China in the development of Gwadar Port. Planning the development of Gwadar port becomes an important part of the CPEC.
This book was published in August 2021, thus, it does not account some significant events in the last year particularly after the new government in Pakistan. It also missed the impacts of COVID-19 which affected the world trade as well as the trade between China and Pakistan. This book outlines the evolving patterns of trade between Pakistan and China, particularly in relation to the signing of the 2006 China Pakistan Free Trade Agreement (CPFTA) however the author did not take any account of the second phase of the CPFTA which was finalized between the two countries in the year 2019 spanning the time frame of 2019-2024. In a nutshell, by utilizing the history, the current relationship between China and Pakistan, and economic theory this book evaluates if China can incentivize/ maximize the economic growth of Pakistan or not.