Pakistan-China Regional Trade Potentials in the light of CPEC

Abstract

Empirical strategy is twofold, first is forecast base and second is based on CR and GL index. For this purpose, we utilized the twenty one sectorial exports and imports dataset among China and Pakistan is collected from world integrated trade solution. The CPEC, designed to link Pakistan and China through rail and road network including tunnel, will provide a new era of prosperity in the region. The CPEC will supplement the benefits of both of the nations and side by side provides a new way for regional development benefitting all neighboring countries coming into the web. Most probably, it will ensure a new dimension to local trade that predict transportation infrastructure, industrial production units, decreased transportation costs, reduction in inventory cost and improved delivery time. The CPEC will also strengthen the market potential for Pakistan’s exports to China in the field of agricultural products, textile, and minerals. It will further enhance the tourism flow to the Northern regions of the country. Moving ahead, the empirical findings of the study also suggest that various development strategies are emerging in the CPEC context for policy makers to optimize the logistics, transportation, trade decisions. Furthermore, the intra-regional trade estimation indicate that Pakistani economy needed to devise tax policy, tax-free zone and subsides for industrial development to compete Chinese industrial exports.