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A quantitative analysis of the effects of China-Pakistan Economic Corridor on Pakistan and China

Author

Listed:
  • Wei, X.
  • Ali, T.
  • Huang, J.

Abstract

China is investing huge funds into Pakistan’s transport infrastructure under China Pakistan Economic Corridor. Both countries stand to benefit from these developments via improved trade and lower export prices. We use a global economics models (GTAP) to assess the effects of transport infrastructure by developing several policy scenarios in 2025. Our results show that both Pakistan and China will get positive effects in terms of GDP growth and welfare. The effects are particularly significant on Pakistan. In terms of mutual trade, Pakistan’s net exports of agricultural commodities to China will increase more than the exports non-agricultural commodities. On the other hand, non-agricultural exports from China will improve significantly to Pakistan. Due to changing trade relations, there will be some adjustment in Pakistan’s production structure. Pakistan could experience some leveling of income due to slight increase in rural incomes. The expected benefits can only be realized by speedy and smooth implementation of the projects under CPEC.

Suggested Citation

  • Wei, X. & Ali, T. & Huang, J., 2018. "A quantitative analysis of the effects of China-Pakistan Economic Corridor on Pakistan and China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276050, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:276050
    DOI: 10.22004/ag.econ.276050
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    File URL: http://ageconsearch.umn.edu/record/276050/files/2013.pdf
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    References listed on IDEAS

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    1. J. Vernon Henderson, Zmarak Shalizi, and Anthony J. Venables, 2001. "Geography and development," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 81-105, January.
    2. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 879-924.
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    Keywords

    Agricultural and Food Policy; International Relations/Trade;

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