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What would be the long term impact of China's investment of $46 billion in Pakistan's economy?

Is Pakistan going to become a wealthy transit country like Hong Kong or Dubai or Doha?

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    This would benefit from being narrowed down considerably I think – user4012 Jul 30 '15 at 14:58
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Investments like this are more like a force of nature than any strategic concern. As soon as a country industrializes, it will experience glut. Not only that more stuff is churned out than is needed but also that many highly skilled workers suddenly have no work to do. Then they will naturally look for overseas markets. If an overseas market is not strong enough, they will invest first in order to raise local purchasing power.

This pattern of wealth propagation happened between the US and China in the 1920s, between Japan and China in the 1970s and 80s. I do not deny that there was tremendous amount of goodwill behind these investments, but the underlying driving force is plain old surplus. As a consequence, hundreds of millions of Chinese people were jolted out of poverty virtually overnight and did not have a clue what was going on.

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It's very hard to predict the long term benefits (especially for Pakistan out of the two). Just look at the statements given by political analyst of Pakistan Akbar Zaidi himself (reference from this article)

I have my concerns because of a complete lack of transparency. If it’s so fabulous, tell us the terms of investments. Why not be upfront about it? I cannot definitively say whether CPEC is good, bad or a disaster for Pakistan.

Which leads us to fear about this:

Akbar Zaidi also raised concerns over the massive loans involved, citing Sri Lanka and Tajikistan’s heavy borrowing from China. In 2011, Tajikistan had to cede 1% of its territory to China in exchange for unpaid loans. Sri Lanka will give away 80% of its share of the Hambantota deep sea port to China for the next 99 years, in exchange for USD 1.1 billion in debt relief.

At face value the benefits of CPEC for Pakistan seem to be heavily inclined towards power supply and rise in employment which no doubt are a big boost to the economy. But at the same time consider the environmental changes and Pakistan's inability to resolve them as mentioned in the above mentioned article itself.

And how can we forget the objection of India on the use of it's land (PoK) which lies in the way of CPEC. Which China prefers to handle this way by offering to open talks with India and work as partners rather than rivals.

All in all, we can conclude that Pakistan may or may not loose as much as it invests but China definitely will not loose much because of the new oil corridors.

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  • And how can we forget the objection of India on the use of it's land (PoK) which lies in the way of CPEC. - that is definitely not Pakistan's concern, and definitely doesn't have anything to do with CPEC's success. – user17569 Apr 20 '18 at 14:37
  • Which China prefers to handle this way by offering to open talks with India and work as partners rather than rivals. - neutral and reliable citation needed. – user17569 Apr 20 '18 at 14:38
  • @why for the second concern of yours, I think you are saying that I am mostly referring Indian newspapers or publications, so here's(globaltimes.cn/content/1096161.shtml) a foreign one which hopefully will be neutral enough for you. – Rachit Pandey Apr 23 '18 at 9:42
  • @why about your first concern for (PoK) are you saying that the most dangerous and heavily guarded border on earth won't have an impact on CPEC's success? Please check this global coverage of Vice which might as well be neutral enough for you: youtube.com/watch?v=2Nzm2CidMpM – Rachit Pandey Apr 23 '18 at 9:45
  • ...most dangerous and heavily guarded border on earth won't have an impact on CPEC's success? - no. – user17569 Apr 23 '18 at 9:47

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