Impact Of CPEC On Pakistan’s Economy-the Shipping Cost And Transit Time Perspective

The logistics of transporting both time and money are going to be the primary focus of this thesis.To effectively conduct business with states in Europe and the Middle East,China requires a trade corridor that is expedient,risk-free,and cost-effective while Pakistan has poor infrastructure and transportation system for its national and international trade.To fulfill the requirements of both countries,Pakistan and China signed a mega project called CPEC to ease their trade and for other economic developments.The purpose of this study is to determine whether or not CPEC is capable of satisfactorily meeting the requirement.This study investigates how the ChinaPakistan-Economic-Corridor will influence trade and International businesses in terms of the amount of time it takes to transport goods and the cost of doing so.Transport and infrastructure are important trade levers because they make it easier for both the people who are transporting goods and the people who are receiving them by cutting down on the amount of time and money required for travel.Businesses in the current period place a high priority on lowering their shipping costs and shortening their transit times as a means to maximize their earnings and ensure that their products are delivered on time.The Central Asia–Pacific Economic Corridor(CPEC)serves as the primary focal point of this thesis.More specifically,the relevance of CPEC as well as the effects it has on China and Pakistan’s import-export in terms of costs and transit times are discussed.In addition,the analysis contrasts the recommended route with the one that is currently being followed.This study primarily makes use of a descriptive and qualitative research strategy in terms of the research methods that are utilised.According to the study,Gwadar and Kashgar are very crucial ports for trade and economic developments of Pakistan and China.Before China was importing and exporting from Shanghai while Pakistan’s most import-export to Europe and Middle East is from Karachi port which is very costly.CPEC connects China and Pakistan through Kashgar and Gwadar port and giving them a new trade route to the Europe and Middle East for their international trade while projects on the Gwadar coastline and railways,highways and network of roads as a part of CPEC project is connecting the all provinces of Pakistan.These highways,railways and network of roads are going to increase internal trade of Pakistan,creating employment and will develop Pakistan’s economy.To analyze the effectiveness of CPEC,we calculated a shipping cost and transit time of a 40-feet container.The point of origin is the dry port of Kashgar,which is located in western China and the destination points are three ports located in Europe and the Middle East.By calculating the transit time and shipping cost of both routes(current trade route and CPEC route)and then after comparing them we found that CPEC route is reducing 36% shipping cost to Europe,50% to Jeddah and Kuwait and,68% shipping cost to Oman while when it comes to transit time,the time duration from Europe will decrease up to 10-11 days,from Jeddah it will decrease 11-13 days,15-18 days from Kuwait and 10 days from Oman.Now the port of Gwadar is not only providing the shortest route to China but also giving another trade route to Pakistan.Pakistan may now use Gwadar port for its import and export with Middle East and European countries which is the shorter trade route for Pakistan through sea.The trains,highways and network of roads from Gwadar to other parts of Pakistan is shortening the distance of land such as from Gwadar Port to Quetta,it offers linkages for trade and shipments,and it also reaches Afghanistan and the Central Asian Republics.Import and export between China and Pakistan will also increase due to Peshawar-Karachi motorway which is decreasing 48 hours distance to only 7 hours.The western route(main trade route)also provides a viable option for businesses in Balochistan and Khyber Pakhtunkhwa to export to China via Kashgar,as it offers improved infrastructure and access to markets.This route has been developed to facilitate trade and transport between Pakistan and China,and is expected to boost economic growth in the region.Moreover Chinese and Pakistani investments in Special Economic Zones will build new factories and in the future Gwadar is expected to become a hub for international trade,which will give great benefits to many Chinese and Pakistani MNCs will specially boost the economy of Pakistan.