China Pakistan Economic Corridor
The year 2016 carries valuable strategic significance for Pakistan, since a lot of developments vis a vis china Pakistan economic corridor are starting to shape up in the current year. One of the direct consequences of this huge economic venture is the rise of unlimited opportunities for Banks operating in Pakistan, which can tap into the Chinese Businesses and secure their share of the market.
The china Pakistani’s ECONOMIC CORRIDOR is a host of projects currently under construction that are estimated to cost USD 36 billion. The bilateral economic arrangement is expected to rapidly expand and upgrade Pakistani infrastructure, as well as deepen and broaden economics links between Pakistan and People’s Republic of china.
CPEC presents a great economic opportunities that can translate into financial intermediation potential for Pakistani banks. presently inward remittances and Letter of credits are routed through European bank. If intermediation is to be through Pakistani banks the the LCS will be routed through Pakistanis own intermediation channels.
The investment in Pakistan- China Economic corridor is manifestation of the deep friendship and ties between the town countries. Economic zones will be created along the route of this corridor and new road and infrastructure will be constructed to provide the required environment and architecture to realize the corridor’s potential.
These road will provide easy access to Pakistanis goods and services, enabling cost effectiveness and shipping efficiency, it will also help china to reach Africa, Europe and other western destination ports through Pakistan.With almost usd 33 billion is expected to be invested in energy sector projects, power generation assumes an important role in cpec project.
These initiatives with the collaboration of Pakistan, china will be opened to constructive plans, which will be beneficial for them. The strong ties between Pakistan and china will boost investment projects for both countries.
Under CPEC , China will grant Pakistan USD 230 million in order to construct a new international airport in Gwadar which is to be operational by December 2017. Moreover a reliable fast and efficient financial channel that eases the flow of Chinese investment for the economic corridor will enable Pakistan’s current account deficit to be curtailed.
The CPEC is an ongoing development mega project which aims to connect Gwadar Port of Pakistan to China’s northwestern region of Xinjiang, via a network of highways, railways and pipelines. The economic corridor is considered central to China–Pakistan relations and will run about 2700 km from Gwadar to Kashghar.
China-Pakistan Economic Corridor and its connectivity with Central Asia, Middle East and Africa will help to shape entire region. Overall construction costs are estimated around $46 billion, with the entire project expected to be completed in several years.
The Corridor is an extension of China’s proposed 21st century Silk Road initiative. This is the biggest overseas investment by China announced so far and the corridor is expected to be operational within three years. The corridor will be a strategic game changer in the region and would go a long way in making Pakistan a richer and stronger entity.
The investment on the corridor will transform Pakistan into a regional economic hub. The corridor will be a confidence booster for investors and attract investment not only from China but other parts of the world as well. Other than transportation infrastructure, the economic corridor will provide Pakistan with telecommunications and energy infrastructure.