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Why China Is Investing In Pakistan?

China - Pakistan Economic Corridor 

CPEC (China-Pakistan Economic Corridor) enormously significant bilateral project for both Pakistan and China worth $62 billion, which is to improve the infrastructure of Pakistan for better accessibility of trade with China and to integrate the countries of other regions. CPEC project launched on April 20, 2015, when Chinese President Xi Jinping and Pakistani Prime Minister Nawaz Sharif signed 51 Agreements and MoU valued at $46 billion

           The main aim of China to invest in Pakistan’s economy [CPEC] is to modernize Pakistan’s transportation system, railways, airports, and energy sector and to get the connectivity of Pakistan’s two deep sea ports Gwadar and Karachi [Also China has taken the Gwadar port land from Pakistan on 40 years lease] and to construct BELT and ROAD project which provide the ultimate accessibility to CHINA and can make it an absolute Super Power of the world. 

The reason for developing the Gwadar and Karachi ports in Pakistan is their strategic location between South Asia, Central Asia, and West Asia at the mouth of the Persian Gulf, just outside the Straits of Hormuz, and to reduce the time and cost of shipment,

 providing better trade route as China has to ship from straits of Malacca and Southern Chinese Sea which leads to higher cost and time which costs China billions of dollars per year and also if any war like situation arises India and US who has its allies with Singapore, Malaysia, and Indonesia can easily choke China’s 60% trade. 

               

  So, to prevent these situations China looks for countries facing a financial crisis and having weak democracies [i.e. Pakistan, Sri Lanka, Myanmar, etc.] by giving these countries huge funding at a higher rate of interest and lesser time to repay the loans than the standards provided by IMF to a debt trap them and increase their Global Influence.

             Also according to CPEC, only Chinese companies will be provided the contract for all the infrastructural developments in Pakistan, and Chinese workers will be employed for the same, which means that the Chinese money is ultimately going back to their country. CPEC will generate 2.3 million jobs in Pakistan over 15 years and estimated an increase in Pakistan’s GDP by 2.5% every year.

 So, CPEC is benefitting both Pakistan’s and China’s economies as Pakistan, which is going from a very harsh stage will receive an increase in FDI which helps their economy to grow and will reduce terrorism in Pakistan and China by having better and strategic trade which will help them in making billions of dollars.