1

University Of Engineering and Technology, Taxila

China As Emerging Power And Pakistan

Assignment
Of
Pakistan Studies

Submitted to:
Miss Sabahat Malik

Submitted by:
Umer Waheed Ahsan Shahbaz Muhammad Kashif
16-CE-49 16-CE-65 16-CE-73
Mazhar Amin Muhammad Hamid
16-CE-45 16-CE-113

Department of Civil Engineering

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Letter of Transmittal

Lecturer Ms. Sabahat

University of Engineering and Technology,
Taxila-
Dear Miss,
We very pleased to submit the research paper on “China as emerging power and
Pakistan”
This research paper has been prepared with great efforts and dedication,
incompliance with course requirement and your instructions. We hope that this onerous task on
my part will be appreciated. Now that the research is complete.
We hope that this research is acceptable to you. As a team, we found
thisw o r k o f d o i n g t h e r e s e a r c h i n t e r e s t i n g a n d c h a l l e n g i n g . H o p e f u l l y , t h i s
research would also be informative as well.
Yours sincerely,
Umer Waheed
Ahsan Shahbaz
Muhammad Kashif
Mazhar Amin
Muhammad Hamid
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Acknowledgement

We are really grateful because we managed to complete our Pakistan Studies assignment within

the time given by our lecturer Miss Sabahat Malik. This assignment cannot be completed without

the effort and co-operation from our group members, Umer Waheed, Ahsan Shahbaz,

Muhammad Kashif, Mazhar Amin and Muhammad Hamid. We also sincerely thank our lecturer

for the guidance and encouragement in finishing this assignment. Last but not the least; we

would like to express our gratitude to our friends for support and willingness to spend some

times with as to complete the assignment.

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Contents
ABSTRACT..........................................................................5
Some Facts about China's Rise .......................................5
Introduction ......................................................................6
CHINESE ECONOMIC REFORMS ........................................7
CHINESE MILITARY REFORMS ...........................................8
Problem areas ...................................................................9
CHINA INDUSTRILIZATION ..............................................10
STANDARD WAY OF LIVING OF PEOPLE OF CHINA .........11
MUTUAL INTEREST OF CHINA AND PAKISTAN ................12
CPEC (CHINA PAKISTAN ECONOMIC CORRIDOR) ............13
Facts and Stats ................................................................14
ADVANTAGES OF CPEC .................................................14
DISADVANTAGES OF CPEC PROJECTS ...........................14
Conclusion.......................................................................15
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China As Emerging Power And Pakistan

When China awakes, it will shake the world.

(Napoleon Bonaparte)1

ABSTRACT

The aim of this paper is to demonstrate the China as emerging power and its importance to
Pakistan. The paper first looks at the economic reforms that have radically changed the Chinese
economy. Then, the paper presents the significant changes that have taken place concerning
military strategy, equipment modernization, and power projection capability. This paper looks at
the Chinese problems in the South China Sea and the East China Sea. This paper also discusses
about enormous changes in the industry of China and poor and modern standard of living of
people of China. In this paper also put light on the interest of China in Pakistan and current
ongoing project by Chinese in Pakistan CPEC (China-Pakistan Economic corridor). At the end
of paper, there is a conclusion about China as emerging power.

Some Facts about China's Rise

Thirty-five years ago, China's per capita income was only one-third of that of sub-Sahara Africa.
Today, China is the world's largest manufacturing powerhouse: It produces nearly 50 percent of
the world's major industrial goods, including crude steel (800 percent of the U.S. level and 50
percent of global supply), cement (60 percent of the world's production), coal (50 percent of the
world's production), vehicles (more than 25 percent of global supply) and industrial patent
applications (about 150 percent of the U.S. level). China is also the world's largest producer of
ships, high-speed trains, robots, tunnels, bridges, highways, chemical fibers, machine tools,
computers, cell phones, etc.2

1
Richard Bernstein and Ross H. Munro, The Coming Conflict With China (New York: Alfred A. Knopf
Inc, 1997), p 203
2
China rapid rise: From backward agrarian society to industrial powerhouse in just 35 years. By Yi Wen
 6

Introduction
The history of China is both fascinating and complex. Its culture has been described as both
peaceful and warlike. China was created by conquest and has essentially been ruled by a series of
warlords. However, China has also experienced periods of peace and active trade with its
neighbors. There have also been extensive periods where China isolated itself from outside
influence and became a closed society. These experiences have profoundly shaped Chinese
culture and strategic thought.3
The last century has been extremely difficult for China. The occupation by the Japanese in the
1930s and 1940s and the civil war, which brought Mao Zedong and the Chinese Communist
Party (CCP) to power in 1949, were extremely turbulent times in China's history. From this
civil war the People's Republic of China (PRC) emerged. However, this was the beginning of
another period of isolation where China attempted to revitalize itself. Under Mao, China was
successful in becoming self-sufficient in nearly all resources and technologies; however, it was
twenty to thirty years behind modern technical standards.4
Following Mao's death in 1976, the new leader, Deng Xiaoping, commenced a series of reforms
that radically changed China. Deng encouraged international trade and allowed foreign capital
investment. The result has been China's phenomenal entry into world markets and a booming
economy. The specific aim of these policies was to obtain large foreign exchange earnings,
which would allow China to both modernize and become more independent. Following Deng's
death in February 1997, the current leader, Jiang Zemin, consolidated his political power base
with the completion of the CCP's Fifteenth Congress in September 1997. Under Jiang's
leadership it looks like economic reforms will continue, however, there seems to be little
prospect for political change. This is exemplified by his call for stricter control of the press. 5

As China emerges as a global power it is important to understand what role it will play and the
security perceptions it has of both Asia and the world. The most important issue for China today
is political stability at home. Any attempt to influence the status quo is not welcome and is
deemed to be interference in China's internal affairs. Many Chinese believe that the United States
represents the core values of Western civilization and is in conflict with Eastern civilization
which is represented by China. As a result, Chinese leadership views any American influence as
a challenge to China's political stability.6

3
Andrew J. Nathan and Robert S. Ross, The Great Wall and the Empty Fortress (New York: W.W.
Norton & Company, 1997), pp 21-26.
4
Ibid, p 28
5
Ibid, p 161

6
Wang Jisi, "The role of the United States as a global and Pacific power: a view from China," The Pacific
Review, V 10 N 1, p 15
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The aim of writing this paper is to demonstrate the Chinese economic, Chinese military, problem
areas, Chinese industry and way of living in china. How all these aspect help China to become an
emerging super power. These papers also demonstrate the important of Pakistan to China and
China to Pakistan, its advantages and disadvantages.

CHINESE ECONOMIC REFORMS

The economic reforms that were introduced by Deng Xiaoping in the late seventies have
transformed the Chinese economy and produced a period of spectacular growth. China's Gross
Domestic Product (GDP) grew at an average rate of 9.3 percent between 1979-1993. The world
experienced a growth rate of 2.6 percent for the same period. China's GDP has also quadrupled
over a period of only fifteen years. It has also improved its status as a trading nation, rising to
eleventh position from number thirty-seven in ten years. Another important fact is that China has
accumulated a large foreign currency reserve and is second in the world to Japan. China has also
taken advantage of foreign investment and is also rated second in the world, after the US. It is
important to realize that the above figures do not include any contribution from Hong Kong,
which China regained as a possession in July 1997.7

While China's performance has been impressive, it also has the potential to maintain this growth.
It has a massive population, which represents not only a large domestic market but also a cheap
labour source of some eight hundred million people. It is also a country that is blessed with vast
natural resources.8 The current economic problems in Asia have not had a major impact on
China, though there are predictions of slower growth.9However, it is expected that China will
become the world's largest economy, in terms of GDP, by 2010.10

As of 2016, China is the second largest trading nation in the world and plays a prominent role
in international trade, and has increasingly engaged in trade organizations and treaties in recent
years. China became a member of the World Trade Organization in 2001. China also has free
trade agreements with several nations, including Australia, South Korea, ASEAN, New
Zealand, Switzerland and Pakistan

On a per capita income basis, China ranked 72nd by nominal GDP and 84th by GDP (PPP) in
2015, according to the International Monetary Fund (IMF). The provinces in the coastal regions
of China tend to be more industrialized, while regions in the hinterland are less developed. As
China's economic importance has grown, so has attention to the structure and health of the
economy.11

For more than a century, the United States has been the world's biggest economy, accounting for
over 24% of the world’s gross domestic product (GDP) in 2016, according to the World Bank.
Both the IMF and the World Bank now rate China as the world’s largest economy based on

7
Fei-Ling Wang, "To Incorporate China: A Policy for a New Era," The Globe and Mail, V21 N1 (Winter,
1998), p 68.
8
Ibid, p 68.
9
Jonathan Karp, "Enron quits Nepal hydro project," The Globe and Mail, Apr 14, 1998, p B-9.
10
Frolic, "Re-engaging China:...", p 343
11
Economy of China From Wikipedia
 8

Purchasing Power Parity (PPP), a measure that adjusts countries’ GDPs for differences in prices.
In simple terms, this means that because your money stretches further in China than it would in
the US, China’s GDP is adjusted upwards. And it won’t be too long before China’s economy
surpasses the US’s by other measures, too. The Centre for Economics and Business Research
(Cebr) predicts it will happen in 202912.

CHINESE MILITARY REFORMS

Chinese military strategy underwent a major change in the mid 1980s. The threat of a Soviet land
attack had diminished and the attention of the People's Liberation Army (PLA) turned to the
threat of regional disputes. Thus, the PLA started to focus on a strategy of limited war. However,
with the downturn in relations with the West following the Tiananmen Square massacre, this
strategy was revised. The Gulf War also had a significant impact on the Chinese leadership and
the conflict was carefully studied. As a result, a new defense strategy emerged, based on fighting
modern warfare using advanced technology. The Chinese have learned many lessons from the
Gulf War. First, they have realized that electronic warfare and advanced weapons are decisive.
They have also learned the importance of strong air and naval power and that rapid response and
fast deployment are a true measure of overall capability. Finally, they have realized that
logistical support is as important as actual combat capability. These lessons learned have had a
profound effect on the PLA's doctrine. First of all, the importance of ground forces has been
reduced to allow additional focus on the air force and navy. Secondly, there has been a shift
away from the philosophy that manpower is superior to machine power and that the offensive
can be won by strength in numbers. Finally, there is a decreased reliance on the civilian
population to fill the army's ranks as was required when the concept of the protracted people's
war was in vogue. China has learned the lessons of the Gulf War and has doctrinally set a course
to develop a modern and effective military with a power projection capability.13
The first wave of the People's Republic of China military reform was announced in November
2015 at a plenary session of the Central Leading Group for Military Reform of the Central
Military Commission (China)
In January 2014, Chinese senior military officers said that the PLA was planning to reduce the
number of military regions from seven to five "Theater Command" to have joint command with
ground, naval, air and rocket forces. This is planned to change their concept of operations from
primarily ground-oriented defense to mobile and coordinated movement of all services and to
enhance offensive air and naval capabilities into the East China Sea. The coastal Jinan, Nanjing,
and Guangzhou regions will be turned into three military areas, each with a joint operations
command, for projecting power into the Yellow Sea, East China Sea, and South China Sea. The
four other inland military regions will be streamlined into two military areas mainly for
organizing forces for operations. The change is to occur over the next five years.14

12
The world’s top economy: the US vs China in five charts

13
Viacheslav A. Frolov, "China's Armed Forces Prepare For High-Tech Warfare," Defense & Foreign
Affairs Strategic Policy, V26 N1 (January,1998), p 7.
14
China plans military reform to enhance its readiness - The-Japan-news.com, 2 January 2014
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The South China Morning Post reported in December 2015 that the '..Central Military
Commission, chaired by Xi, would scrap three of the four army headquarters: the General
Political department, General Logistics and General Armaments. Only the General Staff
Department will remain.
The plans consolidate the seven regional commands into five units and to reorganize the four
army headquarters. The most striking features of the proposals for the five new Theater
Command are a vast new West zone that makes up more than half the country (merging
the Lanzhou Military Region and the Chengdu Military Region) and a larger North zone that will
concentrate on Mongolia, the Russian Far East and the Korean peninsula. The new five strategic
areas, also referred to as combat zones, could be up and running as early as January 1 2017.

Sources said plans were nearing completion for the new West zone – by far the largest of the five
– to include more than a third of the nation’s land-based military forces. The area is home to only
22 per cent of the country’s population, many from the ethnic minorities groups and non-Han
Chinese. “The West combat zone will concentrate on threats in Xinjiang and Tibet and other
minority areas, close to Afghanistan and other states that are home to training bases for
separatists, terrorists and extremists,” one of the sources said. Another source close to the army
said the proposal had been revised in recent weeks to move the West zone headquarters to
Urumqi instead of Chengdu or Lanzhou.15
Xi Jinping, Chairman of the Central Military Commission, announced in September the PLA
would be cut by 300,000 troops to 2 million by 2017. Sources said up to 70 per cent of forces
axed would be officers in land-based units .
Chinese military budget is 145.8 billion USDin 2015, it is ranked 2nd in world. China's defense
spending will balloon to $233 billion in 2020
China says it will increase military spending by about 7% in 2017, just days after Donald Trump
outlined a boost to the US defence budget16.

Problem areas
China's rise as an economic power, combined with its large-scale program to modernize its military,
raises the question of how this power will be used. Associated with this new power has been an increase
in the aggressiveness in China's territorial claims in the region. The 1997 Canadian Department of
National Defence Strategic Overview notes that, " Externally, China's more assertive nationalism,
territorial claims and modernizing military capabilities are causing some unease in the region".17 One of
the main trouble spots concerns China's long standing territorial claims in the South China Sea. Two
island groups, the Parcels and the Spratlys, have numerous claimants. Military conflicts with Vietnam in
1974 and 1988 and demonstrate China's resolve to use force if required. Although China has never

15
Military of China from Wikipedia
16
BBC news
17
Canada, Department of National Defence, Strategic Overview 1997, (Ottawa: DND Canada, 1997), p
11
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challenged passage through this area, there are serious concerns about the security of this important sea-
lane.18
Taiwan is the most volatile issue concerning territorial claims and security in the region. The Chinese
government sees Taiwan as a renegade province and treats any conflict between the two as an internal
matter. Western countries have developed a policy of "one China" and officially recognize the regime in
Beijing. However, at the same time they conduct a vibrant trade with Taiwan. The March 1996 crisis over
Taiwan illustrates the tension concerning this issue. Concerned with the first free and democratic
Taiwanese elections that were scheduled for 23 March 1996, China commenced live-fire naval and air
exercises in the Taiwan Straits earlier that month. China conducted missile firings that disrupted shipping
and refused to renounce the use of force to resolve the Taiwan issue. This action resulted in the US
deployment of two carrier battle groups to the area. Chinese Prime Minister Li Peng warned the US to
keep its ships out of the Taiwan Straits and earlier in the crisis there was a veiled threat by a Chinese
official that China was prepared to use nuclear weapons, targeted on the US west coast, if the US
intervened militarily. The crisis was resolved when the Taiwan's leader won a larger than expected
victory, the Chinese ceased their exercise and the US ships left the area. The results of this crisis are
uncertain. The Chinese lost diplomatic ground and were forced to back down for the moment. As China
develops a more credible military force, any future confrontations of this sort will seriously test the will
and ability of the US and the West to challenge China's actions.19

The final area of concern is related to the resources that will be required to ensure China's
continued existence. China has twenty-two percent of the world's population, but only seven
percent of the cultivatable land. The average cultivated land per capita is only one third of the
world average and continues to shrink. Just feeding the population will require ninety million
more tons of food by the year 2000 than it did in 1995. Construction reduces cultivated land by
seven million hectares every year. While China is now an exporter of oil, its rapid
industrialization could see it becoming an oil importer in the near future.20 The ability of the
Chinese government to manage this situation will play a key role in further territorial claims and
the stability of the Communist regime.

CHINA INDUSTRILIZATION

CHINA in 1949 remained a primarily agricultural economy.Although industry grew rapidly

during the early decades of 20thcentury, the share of manufacturing remained small.Following
several decades of slow expansion, the shop of military defeat and the 1895 treaty of provision
allowing foreign owned factories in China’s treaty report unless aware of deform.Beginning
around 1900,rapid expansion of consumer goods manufacturing powered and economy wide
transformation that paralleled Japan’s earlier path. Prior in 1931,Government involvement was
mostly indirect support of modern banks. After 1931 as the threat of war with Japan pushed the
Chinese state to assert growing control over the industry.21

18
Nathan and Ross, The Great Wall..., pp 115-117
Bernstein and Munro, The Coming Conflict..., pp 149-165.
19

20
Chanda, Fear of the Dragon, p 28
21
Brandt, L. 1989. Commercialization and Agricultural Development : Central and Eastern China, 1870-
1937. Cambridge; NEW YORK : Cambridge University Press.
 11

During 1949 to 1978,the Chinese economy recovered quickly with the end of hostilities and the
establishment of PRC in 1949,by the mid 1950’s China succeeded in further institutionalizing
and extending system inherited from the preceding war time era .industry two features were
specially prominent state ownership and substitution of the planning system for markets.Despite
important advances, the achievements of Chinese industry during the plan era fell for short of
potential.The most obvious indicator is slow productivity growth.
During 1978 to 1988, the number of villages firms increased greater than 12 fold from 1.5
million to 18.9 million. The village industrial gross input increase greater than 13.5 fold (14% of
GDP to 46% of GDP).The village peasant workers increased to nearly one hundred millions .The
formers aggregate wage income increased by 12 fold. the shortage economy ended food security
problem solved. Phase 2(1988-19980) Mass production of labor‐intensive light consumer goods,
relying first on imported machinery.E.g., became world’s largest producer and exporter of textile
in 1995, the world’s largest producer and importer of cotton.
Also the world’s largest producer and exporter of furniture and toys.
Village firm workers reached 30%of China’s entire rural labor force (not including the migrant w
orkers).
Village industrial output grew 28% per year between 1978 and 2000, doubling every three years
for 22 years (66‐fold increase).
Phase3(1998)Big surge in the consumption and production of coal, steel, cement, etc.2.6 million
miles of public roads, including more than 70,000 miles express highways (46% more than U.S.)
28 provinces (out of 30) now covered by highspeed trains (> 10,000 miles, 50% more than the to
tal for the rest of the world)
Economic development, like learning math, goes through sequentialstages. Skipping key stages c
reates disorder.The key challenge is not the lack of technology or funds, purse, to set up a few m
odern factories, but rather to create the mass market and distribution system to render such indust
ries profitable and internationally competitive.Ownership is not the key. The key is market comp
etition and management through “creative destruction.”Democracy cannot function without indu
strialization. Yet industrialization is impossible without a strong state. The
state provides political stability, social order, social trust, infrastructure, and the rule of the game
(regulations).22

STANDARD WAY OF LIVING OF PEOPLE OF CHINA

In 1987 the standard of living in China was much lower than in the industrialized countries, but
nearly all Chinese people had adequate food, clothing, and housing. The second major change in
the standard of living came about as a result of the rapid expansion of productivity and
commerce generated by the reform measures of the 1980s. After thirty years of austerity and
marginal sufficiency, Chinese consumers suddenly were able to buy more than enough to eat
from a growing variety of food items. Stylish clothing, modern furniture, and a wide array of
electrical appliances also became part of the normal expectations of ordinary Chinese families.
Following the economic reforms introduced by the government in the late 1970s, consumption
22
YI WEN Assistant Vice President and Economist Federal Reverse Bank Of St. Louis.
 12

and individual incomes rose significantly, with the real per capita consumption of peasants rising
at an annual rate of 6.7% from 1975 to 1986, while for urbanites over the same period, the
corresponding figure was 5.5%. The improvements in the standard of living were demonstrated
by a boom in rural and urban housing, together with a considerable increase in the ownership of
televisions and other appliances.23 In addition, there was a positive trend toward rapid
improvements in living conditions in the 1980s as a result of the economic reforms, though
improvements in the standard of living beyond the basic level came slowly .Until the end of the
1970s, the fruits of economic growth were largely negated by population increases, which
prevented significant advances in the per capita availability of food, clothing, and housing
beyond levels achieved in the 1950s.Premier Li Keqiang said that though 94% of China’s
residents live east of the Hu Huanyong Line - concerning 43% of the country’s territory -
urbanization of the central and western areas is also necessary.He made the comments during a
visit to the National Museum of China in Beijing on Nov 27, and referred to the Heihe-
Tengchong Line - an imaginary line drawn by Chinese geographer Hu Huanyong in 1935, which
divides the area of China into two approximately equal parts, and marks the striking difference in
the distribution of the country’s population.The Premier said that China is a country with
multiple ethnic groups and with a vast territory, and the government should consider how to
address the situation, and promote coordinated regional development - so that residents of central
and western areas would also be able to benefit from modernization.24

MUTUAL INTEREST OF CHINA AND PAKISTAN

China seems to have abandoned its cautious approach to relations with Pakistan and has adopted
a policy of active and deep engagement. This new approach will most likely increase Beijing’s
influence in Islamabad. During Chinese President Xi Jumping’s visit to Pakistan in April 2015,
China announced US$46 billion worth of investment in the China–Pakistan Economic Corridor
(CPEC).
This ambitious mega-project intends to link China’s Kashgar to Gwadar Port in Pakistan through
a network of roads. Both sides are also planning railways, pipelines and fiber optic networks.
This is the largest deal in the history of two countries. If the implementation of the CPEC moves
smoothly, China may double its investment.Pakistan has been going through a challenge with
terrorism and chronic political instability. Yet, China still decided to undertake this mega-
investment, which shows its deep stake in Pakistan. The changing geopolitical environment
might shed a light on this audacious decision.
The gravity of world politics is shifting from the West to Asia, with China at its center. This has
increased competition between the US (the established superpower) and China (the rising power)
who are both seeking to gain a strategic foothold, especially in the Asia-Pacific region. The US’s
‘pivot to Asia’ strategy, intensifying territorial disputes in the South China Sea and a resurging
Japan under Prime Minister Shinzo Abe are all ringing Chinese alarm bells.China is looking for
allies in the region and finds Pakistan is its most reliable partner. This relationship is grounded in

23
STANDARD OF LIVING IN CHINA WIKIPEDIA
24
ENGLISH.GOV.CN THE STATE COUNCIL THE PEOPLE’S REPUBLIC OF CHINA
 13

geographical proximity, common security outlooks toward the region and ‘trust’ built over
decades. China is also motivated by a desire to help Pakistan restore its ‘glorious’ past.
China and Pakistan’s interests are converging in the changing geopolitical environment. Beijing
wants to assert its sphere of influence in South Asia, the Middle East, get an access to the Indian
Ocean and beyond. China also needs support against separatism in Xinjiang and is seeking to
develop its Western region. To achieve some of those objectives, China has unveiled the One
Belt, One Road project that will ultimately connect it with over 60 countries. Under this project,
China will build a web of networks such as the Bangladesh–China–India–Myanmar Economic
Corridor, the Silk Road in Central Asia, the 21st Century Maritime Silk Road and the CPEC.
The CPEC is the flagship of these projects. It acts as a bridge between land and sea, involves
only one other country (Pakistan), and gives China the quickest route to the Indian Ocean and
beyond. The CPEC will complement China’s desire to modernize its Western region and deal
with separatists in Xinjiang. For the terrorism-hit Pakistan, the CPEC could bring hugely25

CPEC (CHINA PAKISTAN ECONOMIC CORRIDOR)

The China-Pakistan Economic Corridor gave way to 51 agreements and USD 46 billion creating
considerable benefits for Pakistan. However, only USD 6 billion of the investment is for
improvement of facilities in and around Gwadar, and another USD 5 billion has been set aside
for metro for Lahore and railway track from Karachi to Peshawar. Reports of the corridor being a
network of rail, road and pipelines are a myth. Around USD 33.8 billion is for renewable energy
projects to tackle Pakistan’s energy crisis, but Chinese power companies have pulled out of such
commitments before on grounds of non-feasibility For example in January 2015, Chinese
investors pulled out of a 6600 MW power project in Baluchistan’s Gadani. Work stopped on 5
Chinese power projects in Punjab that generated 6600 MW. Though Pakistan’s installed capacity
is 22,800 MW to meet the current demand of 19,000 MW, it produces only 12,000 MW. Circular
debt standing at USD 5 billion confronts Pakistan’s energy sector. Gwadar is also less crucial to
China as it is expensive to pump or carry oil or gas over the Karakoram range to Xinjiang. There
is a problem of resources as well. 4 of 6 thermal power projects for which agreements have been
signed are predicated in imported coal as against imported furnace oil from which 60% of
Pakistan’s power is generated Moreover, solar power projects in Pakistan are not as cheap as
thermal power; the sun will, therefore, set on these projects fast as well. The money will be taken
from old investors to pay off new ones; CPEC will remain a pipe dream. The impact of CPEC on
Pakistan’s exports is also a big question. Earnings will be in rupees and unless offset by
increasing exports, it will be a drag for the BOP position of Pakistan. Availability of local
financing is another drawback. The government will borrow available credit from the banking
system due to failure to reform public finances.

25
EAST ASIA FORUM Economics, politics and public policy in East Asia and The Pacific
 14

Facts and Stats

CPEC runs from Gwadar Port in Pakistan to Xinjiang in China for a distance of over 3,000 km.
The overall construction cost of the CPEC is estimated at USD 46 billion. This corridor is an
extension of the 21st century Silk Road Initiative of China. The corridor is expected to be
operational in 3 years26

ADVANTAGES OF CPEC
1- It reduces the distance between Pakistan and China .however, it costly 10 times expensive
than sea port route, but it provides a route for many industries in China the smallest route for
their trading projects.
2- It reduces the expenses for China in the transportation to Europe and the middle east.
3- The short advantage for Pakistan is that Pakistan charges the fee for the use of its trade route.
4-It reduces the distance for the China to travel in the middle east than sea route thus it reduces
the time limit for the China.
5-The project also reduces the freight charges of the container.
6-CPEC would also provide the shortest and most cost effective route for landlocked
Afghanistan to China, India and Indian Ocean.
7-The GDP growth of the Pakistan is increased through this project.
8-Benefits for Pakistan are also immense if the proposed special industrial zones are established
along the CPEC route.

DISADVANTAGES OF CPEC PROJECTS

1-Pakistan takes the loan of the 46 billion dollars from the CHINA and it is better only for
Pakistan when this project becomes successfully, otherwise it is harmful for the Pakistan
economy.
2-out of the 46 billion dollars, 35 billion dollars will be used in making the energy projects and
the coal use in these projects are coming from foreign countries and not from Pakistan, which is
a disadvantage for Pakistan.

26
CHINA PAKISTAN ECONOMIC CORRIDER WIKIPEDIA.
 15

3-In this project Pakistan never launches his own industry, because Pakistan has no ability to
make cheap and good things.
4-All the labor in this project is coming from the China and not from Pakistan and this is not for
Pakistan.
 16

Conclusion

The mainstream media talks about China as the upcoming superpower well it is the oldest
civilization on earth and it has largest population and the largest economy but there is a
tremendous difference between perception from media and the reality. Many people see China
strength mainly in its economy and although China’s economy now ranks as the largest in the
world its per capita income is still roughly 10 times lower than that of Japan and the United
States. This economy difference can also be seen in the standard of living about 85% of China’s
total population has very low standard of living it is easily comparable to many African nation
more than half of China’s population still in villages most without access to safe drinking water
,basic health care or decent education. The urbanization rate in China is about 1% a year, with
this rate it will take China another three decades to reduce the rural population to a quarter of its
total population. The low standards of living in China also affect its economy because domestic
demand is so low that China is forced to export and that’s what China is it is an export-oriented
economy. What this means is that China relies on its export to increase its growth rate and while
this was a good strategy a few decades age it has now made China very dependent on the
foreign international system. Basically China has become overwhelmingly dependent on the
consumers in the west primarily consumers in the United States. Another thing is that Chinese
exports go to the global sea trade routes which are dominated by the American Navy and this is
China’s biggest challenge because Beijing feels uncomfortable there the United States is in
position to block China’s port if it wished so, should the United States do that, it would cripple
China. So that’s why China has been focusing on building a modern Navy to protect its trading
interests and this Navy buildup includes land and submarine based anti-ship missiles but it would
take Chine actually a several decades to actually build up a Navy able to compete with United
States Navy. That why China tries to make good relations with neighbor countries, Specifically
with Pakistan because of Pakistan’s warm water coastal areas (Gwadar port). Gwadar port is
world largest deep port which provide shortest route to China to access to Persian Gulf, that why
Chinese invest more than 46 million in CEPC project.
Most of the investment in China goes to the infrastructure and employment but a huge chunk of
this investment military and security forces to protect China and this take a heavy burden on
Chinese economy. Aside from internal fragmentation, China faces a lot of external pressure from
its neighbors. Unlike the United States-China has to contend with strong regional rivals just thick
of Japan, Russia, and India even smaller neighbors are no pushover Taiwan, South Korea,
Pakistan, Indonesia and even Vietnam they all put a lot of weight on the Chinese military and
economic resources.
Aside from all these aspects and influences, China is trying to become a super power. US trying
to degrade the Chinese Nation because the US does not want any competitor. United State afraid
of losing it power in the world. From the research, we conclude that China becomes next super
power within 10 years.
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