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

X. Wei, T. Ali and Jikun Huang

No 276050, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

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.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 20
Date: 2018-07
New Economics Papers: this item is included in nep-cna, nep-int, nep-tra and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:276050

DOI: 10.22004/ag.econ.276050

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