pakistan-china trade and investment relations functions

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Pakistan-china trade and investment relations functions saham forex malaysia chat

Pakistan-china trade and investment relations functions

However, US consumers have also benefitted from these low prices. The tariffs on China represent a fundamental retreat by the US from the global trading system. In the past the US supported free trade and upheld this position on various occasions.

Now the question arises — how will this trade war affect not only these two countries but the world? According to the International Trade Centre, the US and Chinese global exports account for around one-fourth of the world exports. Even before the current steps taken by US government to correct the trade imbalance, China had been deemed as a threat by different US companies on the pretext of stealing intellectual property, deliberately devaluing Yuan to leverage partial advantage in exports, dumping its product in the international market at low prices due to the availability of cheap labour, etc.

The increase in international trade has increased the interdependence of countries. The trade war between China and the US is, therefore, impacting the world. As per the theory of international trade — cooperation and rule-based systems lead to global welfare, while a competitive approach is likely to generate suboptimal results. A trust deficit between trading nations escalates into protectionism and thus into economic isolationism. This has been aggravated by American apprehension of being dominated by China as a global economic super power — due to its remarkable progress over the last four decades.

These fears may be unfounded because still there is a huge gap between the GDP per capita in nominal and Purchasing Power Parity of the two countries as indicated in Table No. Additionally, it is pertinent to mention here that the accelerated growth of China was always considered as a threat by numerous US governments over the decades.

All sorts of allegations have been levelled against China, ranging from undervaluing currency to dumping to stealing technology to violating human rights, etc. Accordingly, it is likely that these US companies may become victims of this trade war and may resist any such move s. Prior to , the only commercial relation between China and the outside world was through foreign trade.

Direct Foreign Investment was not permitted in China. The program required foreign capital. To attract foreign capital and technology, China allowed joint ventures in Within the next two decades China became the biggest recipient of FDI in the developing world. Some inherent factors helped China in attracting FDI, which include: a market size b an abundant skilled and semi-skilled labour availability c Infrastructure d the role of the Chinese diaspora as a source of foreign capital and expertise.

During the Asian financial crisis in the s there was a slight decrease in FDI. Data for is particularly impressive considering the financial crisis that hit the fast-growing emerging market economies of Asia with full force. This partly reflects the desire of US investors to leverage the benefits available in China, which, in turn, helped China to integrate itself with global supply and production chains. These joint ventures helped US firms to minimize their business risks by developing partnerships.

Chinese economic rise is one of the most spectacular developments in the post World War II era — eclipsing the fabulous rise of Germany and Japan. In China overtook Japan to become the third largest exporter in the world after USA and Germany, and, three years later, it became the second largest exporter. Since , China has been the largest exporting nation. Domestic production networks in China have successful integrated to achieve economies of scale during this period. China has been making rapid progress in the production and supply of machinery, which shifted towards ICT and high-tech products during the last decade.

In terms of labour supply, China had the advantage of having an abundance of supervisory, midlevel and unskilled cheap workforce. Moreover, China acceded to the World Trade Organization in , which also set a favorable ground for business operations. There are possibly four Labour-related reasons behind the increase in manufacturing exports in China.

Secondly, there are vast pools of cheap labour still available in interior provinces of the country. This gives them the option to relocate their manufacturing to these areas to counter rising wages in the coastal areas. Thirdly, the increase in labour costs has largely been offset by a reduction in the cost of services through trade and investment policy reforms, and, more importantly, improvement in the provision of trade related infrastructure. Lastly, China has the advantage of being able to meet labour requirements for large scale assembly operations within the global production network.

Initially, these companies were importing raw material from USA and using China only for production of finished products to capitalize on cheap and trainable labour. This trend slowed over the years, as these companies have started to find suppliers of raw materials within China and the region.

These changing trade patterns are reflected in the bilateral trade data. This is contrary to popular perception in USA regarding massive consumer product procurements by Walmart or other US retail stores. They have shifted the final assembly processes to China while retaining mostly product design, global marketing and other headquarter functions in the US.

The winning strategies of China include economic liberalization, a focus on high technology and an array of comparative advantages offered by cheap and trainable labour. This has been supplemented by massive development in transportation, communication and Information Technology during the last three decades.

China also transformed its command and control model of economy to a market driven economy which assisted in integrating China with the global economy and helped attract technology and FDI. US Companies like Apple and Tesla are heavily investing in China and are also engaged in technology transfers.

Nike is now doing better in China than its traditional markets like Latin America. Tesla is already feeling the heat of these tariffs as it has major stakes in the Chinese market. Tesla plunged as much as 6. Similarly, USA is also the preferred destination for Chinese students and expatriates. Leading Chinese technology companies like Huawei are using semi-conductors of Apple. Many primary sources were contacted. They greatly helped in understanding the dynamics of these complex relations and how this would affect the future of both countries and the region.

In order to complete this task many interviews were held with people associated with CPEC. These interviews were mostly unstructured. Open-ended questions were asked so that the interviewees could express their views openly and as per their liking. Two experts dealing with the subject who need a special mention in this regard are: Mr. Badar u Zaman helped me in understanding the history, dynamics and coverage of the corridor. He also connected me to many Chinese exporters, businessmen and Pakistani entrepreneurs dealing with Chinese Companies.

It may also be added here that I also visited China four times during June-December in an official capacity and had a chance to interact with more than Chinese companies. Chinese Businessmen, like Mr. The Chinese government is also offering subsidies and preferred loans for these relocations. Mr Wang is also facing closure of his factories in China and has already relocated his project to Thatha District and has stated exporting to USA.

In case of textile, Challenge apparel has already started production in the suburbs of Lahore. They are also considering another plant in Karachi, to avoid inland freights, as most of their products are exported to European Union and USA. These personal interviews with dozens of Chinese companies and visiting their plants in China and Pakistan has broadened my vision regarding CPEC. This study concludes that there is a huge trade imbalance between the US and China which has resulted in escalating tensions between the two.

These tensions will keep surfacing in the future due to the nature of the economic and political relations between the two countries. Efforts by world leaders to take measures to correct trade imbalances lead to economic nationalism and protectionist policies. These policies may prove counterproductive in the long run and can have a negative impact on the multilateral trading system and decrease global economic welfare. It took another fifty years to create the WTO regime in These efforts can be jeopardized if nations start taking protectionist and nationalist trade measures.

Thus, international organizations and world leaders need to collaborate through bilateral and multilateral discussions to amend trade tensions and guard against threats to the multilateral trading structure of the world. If this trade war between these two economic giants continues and becomes more intense then its effects would not be restricted to just the US and China. This will also affect Chinese manufacturers and government as it may potentially decrease the inflow of FDI coupled with a negative effect in the acquisition of technology, especially in Artificial Intelligence Protectionist policies would hurt manufacturing and may lead to job losses in both countries and also other countries associated with this supply chain in any context.

These two have announced to abandon their plans to setup production plants in Mexico. There have been some statements appearing in the media that suggest that companies are also considering relocating to other countries like India, Vietnam, Pakistan if these tariffs continue, rather than returning to the US. It may be added here that the US government has also recently announced to strip exemptions granted to Indian textiles, leather, jewelry, auto parts and agriculture products from 5 th June, Goel, , which indicates that the US would be pursuing protectionist policies in the future, as well.

Though the Chinese government has taken a degree of measures during the last two decades to improve their record. Likewise, aggressive trade policies containing hidden subsidies are also likely to affect the international reputation of China as a business leader. On the other hand, the US President also needs some prudent advice to pursue open market policies and to avoid disrupting the free flow of international trade. USA is the largest export destination of Pakistan, while China is the largest trading partner of Pakistan.

USA has been a strategic ally of Pakistan. With China, Pakistan has enjoyed friendly political and strategic relations, which are now translating to economic relations with the start of the China Pakistan Economic Corridor CPEC and, since the past five years, China has been the largest source of inbound FDI. With this background, Pakistan is likely to get affected by this trade war more than any other country.

The challenges and ramifications for Pakistan are however still shrouded in mystery and uncertainty. The best outcome for Pakistan would be normalization of relations between the two world powers, which will also be good for global political and economic order. Despite problematic issues pertaining to global trade — such as environment, economic displacements, generation of a skewed distribution of gains from trade, etc.

As Paul Krugman puts forth, the global powers opting for protectionism have to bear the cost of inefficiency as imposition of tariffs prevents productive specializations Krugman, Moreover, trade protectionism hampers complex global value chains. In manufacturing, the upstream process in the supply chain suffers due to production bottlenecks caused by escalated tariffs while the downstream phase loses the opportunity and benefits of upgradation.

In a nutshell, the loss incurred by all the stakeholders in the global supply chain will not augur well for global prosperity. Through massive improvement in infrastructure, ICT, communication and transportation the world is becoming more interlinked and, as a consequence, even a small disruption at times has unfathomable ramifications. On the flipside, there may be some countries that can take advantage of the current scenario.

This trade war, for instance, affords an opportunity to Pakistan in terms of the relocation of Chinese industries to Pakistan. But this opportunity is also available to many other countries and different analysts and experts are attempting studies to forecast these relocations, which likely depend upon the receptive or welcoming socio-political and economic environment of the host countries. The Government of Pakistan should also make the necessary arrangements in its legal and administrative setups, rules and procedures to take advantage of this opportunity.

Ahya, C. Analysis, B. Andriole, S. Arunachalam, S. Beinart, P. The Atlantic. CNBC, Dey, E. Dodovskiy, J. The stories have left me with a deep impression. I look forward to my upcoming state visit to Pakistan. Pakistan's military initially depended almost entirely on American armaments and aid, which was increased during the covert U. The U. The Pressler Amendment in suspended all American military assistance and any new economic aid amidst concerns that Pakistan was attempting to develop a nuclear weapon.

This belief was further strengthened as India had developed a nuclear weapon without significant American opposition, and Pakistan felt obligated to do the same. Consequently, the primarily geopolitical alliance between Pakistan and China has since branched out into military and economic cooperation, due to Pakistan's belief that the U.

With the U. Since the September 11 attacks , Pakistan has increased the scope of Chinese influence and support by agreeing to a number of military projects, combined with extensive economic support and investment from the Chinese. In July , Pakistan was one of 50 countries that backed China's policies in Xinjiang , signing a joint letter to the UNHRC commending China's "remarkable achievements in the field of human rights", claiming "Now safety and security has returned to Xinjiang and the fundamental human rights of people of all ethnic groups there are safeguarded.

In November , Pakistan was one of 54 countries that signed a joint statement supporting China's Xinjiang policies. There are strong military ties between China and Pakistan. The strong military ties primarily aim to counter regional Indian and American influence, and was also to repel Soviet influence in the area.

In recent years this relationship has strengthened through ongoing military projects and agreements between Pakistan and China. Since , China has been a steady source of military equipment to the Pakistani Army , helping establish ammunition factories, providing technological assistance and modernising existing facilities. The Chinese has designed tailor-made advanced weapons for Pakistan, making it a strong military power in the South Asian region.

The armies have a schedule for organising joint military exercises. China has recently pledged to invest nearly 43 billion US dollars. In the past, China has played a major role in the development of Pakistan's nuclear infrastructure, especially when increasingly stringent export controls in Western countries made it difficult for Pakistan to acquire plutonium and uranium enriching equipment from elsewhere such as the Chinese help in building the Khushab reactor, which plays a key role in Pakistan's production of plutonium.

A subsidiary of the China National Nuclear Corporation contributed in Pakistan's efforts to expand its uranium enrichment capabilities by providing 5, custom made ring magnets, which are a key component of the bearings that facilitate the high-speed rotation of centrifuges.

China has also provided technical and material support in the completion of the Chashma Nuclear Power Complex and plutonium reprocessing facility, which was built in the mids. China, Pakistan and Afghanistan have coordinated to increase regional stability. Pakistan has been one of China's major trade partners. Recently though, economic trade between Pakistan and China is increasing, and a free trade agreement has been signed.

Military and technological transactions continue to dominate the economic relationship between the two nations, and China has pledged to increase their investment in Pakistan's economy and infrastructure. On 22 April , according to China Daily , China released its first overseas investment project under the Belt and Road Initiative for developing a hydropower station near Jhelum.

The biggest development off late to open up the China-Pakistan Economic Corridor CPEC has changed the situation completely as China has carved an enormous plan for economic growth and development in Pakistan as pointed out below in the next section. The journey takes two to three months, during which time the ships are vulnerable to pirates, bad weather, political rivals and other risks. Using Gwadar Port instead would reduce the distance and possibly the cost.

The plan seeks to build on a market presence already established by Chinese enterprises, Haier in household appliances, ChinaMobile and Huawei in telecommunications and China Metallurgical Group Corporation MCC in mining and minerals. In other cases, such as textiles and garments, cement and building materials, fertiliser and agricultural technologies among others it calls for building the infrastructure and a supporting policy environment to facilitate fresh entry.

According to the plan, a key element in this is the creation of industrial parks, or special economic zones, would be done with the provision of water, perfect infrastructure, sufficient supply of energy and the capacity of self-service power. But the main thrust of the plan actually lies in agriculture, contrary to the image of CPEC as a massive industrial and transport undertaking, involving power plants and highways.

The plan acquires its greatest specificity, and lays out the largest number of projects and plans for their facilitation, in agriculture. For agriculture, the plan outlines an engagement that runs from one end of the supply chain all the way to the other.

From provision of seeds and other inputs, like fertiliser, credit and pesticides, Chinese enterprises will also operate their own farms, processing facilities for fruits and vegetables and grain. Logistics companies will operate a large storage and transportation system for agrarian produce, as stated by the plan in Dawn.

The other common investment is expected in information and technology, a full system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with hour video recordings on roads and busy marketplaces for law and order. A national fibre-optic backbone will be built for the country not only for internet traffic, but also terrestrial distribution of broadcast TV , which will cooperate with Chinese media in the "dissemination of Chinese cultures".

The support that China and Pakistan give each other is considered significant in global diplomacy, and has been compared to Israel—United States relations. According to a Pew survey of Pakistani public opinion in , 84 per cent of respondents said they had a favourable view of China and 16 per cent had a favourable view of the United States.

Pakistan and China have long praised the close ties the two countries have with each other. Pakistani President Pervez Musharraf referred to China as Pakistan's "time-tested and all-weather friend", while in return Chinese president Hu Jintao has referred to Pakistan as "a good friend and partner".

The Guardian [69]. The author of The China-Pakistan Axis: Asia's New Geopolitics concludes the book by connecting the bilateral relationship to broader themes in Chinese foreign policy. According to the author, on the one hand, Pakistan is both a Chinese pawn against India and platform for power projection, but there are limits to this approach. For instance, as Small notes, "Beijing's counterterrorism strategy has been essentially parasitic on the United States being a more important target for transnational militant groups than China.

It's unclear how long that can last. From Wikipedia, the free encyclopedia. If you love China, love Pakistan too. Main article: China—Pakistan Economic Corridor. Pakistan, with its strategic position, natural resources and warm-water ports, has long been an ally of Beijing. The Chinese see the south Asian state, the closest they have to a friend both in south Asia and in the Islamic world, as important to the security and development of their western, predominantly Muslim provinces, and as a useful aide in efforts to counter the influence of India.

In recent years, links have grown closer. Indeed China's ties with Pakistan, which were established during Mao's rule and are based on shared hostility towards India, thrive on many common interests. A long history of secret deals between their two armies--overrides the problems with Islamic extremism. China portal Pakistan portal Politics portal. BBC News. Retrieved 17 May The New York Times. Retrieved 12 October China Daily.

Retrieved 14 November Archived from the original on 27 July Retrieved 12 July People's Daily. Retrieved 18 May Retrieved 13 May Retrieved 17 November Retrieved 26 December The Diplomat. Retrieved 11 January The Economist. Retrieved 12 February Wezeman and Pieter D.

Archived from the original on 17 March Retrieved 17 March Retrieved 10 May Pervez Hoobhoy. Colonial History, Part-I". Retrieved 12 September Religion Under Socialism in China. Archived from the original on 13 June Retrieved 24 August CS1 maint: archived copy as title link "Archived copy". Retrieved 5 August CS1 maint: archived copy as title link. Archived from the original on 19 September Archived from the original on 27 August People's Daily China.

Retrieved 18 April Retrieved 20 April DAWN News. Archived from the original on 6 September Retrieved 9 August Retrieved 11 August Retrieved 30 December

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The trade war between China and the US is, therefore, impacting the world. As per the theory of international trade — cooperation and rule-based systems lead to global welfare, while a competitive approach is likely to generate suboptimal results. A trust deficit between trading nations escalates into protectionism and thus into economic isolationism.

This has been aggravated by American apprehension of being dominated by China as a global economic super power — due to its remarkable progress over the last four decades. These fears may be unfounded because still there is a huge gap between the GDP per capita in nominal and Purchasing Power Parity of the two countries as indicated in Table No.

Additionally, it is pertinent to mention here that the accelerated growth of China was always considered as a threat by numerous US governments over the decades. All sorts of allegations have been levelled against China, ranging from undervaluing currency to dumping to stealing technology to violating human rights, etc.

Accordingly, it is likely that these US companies may become victims of this trade war and may resist any such move s. Prior to , the only commercial relation between China and the outside world was through foreign trade. Direct Foreign Investment was not permitted in China. The program required foreign capital. To attract foreign capital and technology, China allowed joint ventures in Within the next two decades China became the biggest recipient of FDI in the developing world.

Some inherent factors helped China in attracting FDI, which include: a market size b an abundant skilled and semi-skilled labour availability c Infrastructure d the role of the Chinese diaspora as a source of foreign capital and expertise.

During the Asian financial crisis in the s there was a slight decrease in FDI. Data for is particularly impressive considering the financial crisis that hit the fast-growing emerging market economies of Asia with full force. This partly reflects the desire of US investors to leverage the benefits available in China, which, in turn, helped China to integrate itself with global supply and production chains.

These joint ventures helped US firms to minimize their business risks by developing partnerships. Chinese economic rise is one of the most spectacular developments in the post World War II era — eclipsing the fabulous rise of Germany and Japan.

In China overtook Japan to become the third largest exporter in the world after USA and Germany, and, three years later, it became the second largest exporter. Since , China has been the largest exporting nation. Domestic production networks in China have successful integrated to achieve economies of scale during this period. China has been making rapid progress in the production and supply of machinery, which shifted towards ICT and high-tech products during the last decade.

In terms of labour supply, China had the advantage of having an abundance of supervisory, midlevel and unskilled cheap workforce. Moreover, China acceded to the World Trade Organization in , which also set a favorable ground for business operations. There are possibly four Labour-related reasons behind the increase in manufacturing exports in China. Secondly, there are vast pools of cheap labour still available in interior provinces of the country. This gives them the option to relocate their manufacturing to these areas to counter rising wages in the coastal areas.

Thirdly, the increase in labour costs has largely been offset by a reduction in the cost of services through trade and investment policy reforms, and, more importantly, improvement in the provision of trade related infrastructure. Lastly, China has the advantage of being able to meet labour requirements for large scale assembly operations within the global production network. Initially, these companies were importing raw material from USA and using China only for production of finished products to capitalize on cheap and trainable labour.

This trend slowed over the years, as these companies have started to find suppliers of raw materials within China and the region. These changing trade patterns are reflected in the bilateral trade data. This is contrary to popular perception in USA regarding massive consumer product procurements by Walmart or other US retail stores.

They have shifted the final assembly processes to China while retaining mostly product design, global marketing and other headquarter functions in the US. The winning strategies of China include economic liberalization, a focus on high technology and an array of comparative advantages offered by cheap and trainable labour.

This has been supplemented by massive development in transportation, communication and Information Technology during the last three decades. China also transformed its command and control model of economy to a market driven economy which assisted in integrating China with the global economy and helped attract technology and FDI. US Companies like Apple and Tesla are heavily investing in China and are also engaged in technology transfers.

Nike is now doing better in China than its traditional markets like Latin America. Tesla is already feeling the heat of these tariffs as it has major stakes in the Chinese market. Tesla plunged as much as 6. Similarly, USA is also the preferred destination for Chinese students and expatriates.

Leading Chinese technology companies like Huawei are using semi-conductors of Apple. Many primary sources were contacted. They greatly helped in understanding the dynamics of these complex relations and how this would affect the future of both countries and the region. In order to complete this task many interviews were held with people associated with CPEC. These interviews were mostly unstructured. Open-ended questions were asked so that the interviewees could express their views openly and as per their liking.

Two experts dealing with the subject who need a special mention in this regard are: Mr. Badar u Zaman helped me in understanding the history, dynamics and coverage of the corridor. He also connected me to many Chinese exporters, businessmen and Pakistani entrepreneurs dealing with Chinese Companies. It may also be added here that I also visited China four times during June-December in an official capacity and had a chance to interact with more than Chinese companies.

Chinese Businessmen, like Mr. The Chinese government is also offering subsidies and preferred loans for these relocations. Mr Wang is also facing closure of his factories in China and has already relocated his project to Thatha District and has stated exporting to USA. In case of textile, Challenge apparel has already started production in the suburbs of Lahore.

They are also considering another plant in Karachi, to avoid inland freights, as most of their products are exported to European Union and USA. These personal interviews with dozens of Chinese companies and visiting their plants in China and Pakistan has broadened my vision regarding CPEC.

This study concludes that there is a huge trade imbalance between the US and China which has resulted in escalating tensions between the two. These tensions will keep surfacing in the future due to the nature of the economic and political relations between the two countries. Efforts by world leaders to take measures to correct trade imbalances lead to economic nationalism and protectionist policies. These policies may prove counterproductive in the long run and can have a negative impact on the multilateral trading system and decrease global economic welfare.

It took another fifty years to create the WTO regime in These efforts can be jeopardized if nations start taking protectionist and nationalist trade measures. Thus, international organizations and world leaders need to collaborate through bilateral and multilateral discussions to amend trade tensions and guard against threats to the multilateral trading structure of the world. If this trade war between these two economic giants continues and becomes more intense then its effects would not be restricted to just the US and China.

This will also affect Chinese manufacturers and government as it may potentially decrease the inflow of FDI coupled with a negative effect in the acquisition of technology, especially in Artificial Intelligence Protectionist policies would hurt manufacturing and may lead to job losses in both countries and also other countries associated with this supply chain in any context. These two have announced to abandon their plans to setup production plants in Mexico. There have been some statements appearing in the media that suggest that companies are also considering relocating to other countries like India, Vietnam, Pakistan if these tariffs continue, rather than returning to the US.

It may be added here that the US government has also recently announced to strip exemptions granted to Indian textiles, leather, jewelry, auto parts and agriculture products from 5 th June, Goel, , which indicates that the US would be pursuing protectionist policies in the future, as well.

Though the Chinese government has taken a degree of measures during the last two decades to improve their record. Likewise, aggressive trade policies containing hidden subsidies are also likely to affect the international reputation of China as a business leader. On the other hand, the US President also needs some prudent advice to pursue open market policies and to avoid disrupting the free flow of international trade.

USA is the largest export destination of Pakistan, while China is the largest trading partner of Pakistan. USA has been a strategic ally of Pakistan. With China, Pakistan has enjoyed friendly political and strategic relations, which are now translating to economic relations with the start of the China Pakistan Economic Corridor CPEC and, since the past five years, China has been the largest source of inbound FDI. With this background, Pakistan is likely to get affected by this trade war more than any other country.

The challenges and ramifications for Pakistan are however still shrouded in mystery and uncertainty. The best outcome for Pakistan would be normalization of relations between the two world powers, which will also be good for global political and economic order. Despite problematic issues pertaining to global trade — such as environment, economic displacements, generation of a skewed distribution of gains from trade, etc.

As Paul Krugman puts forth, the global powers opting for protectionism have to bear the cost of inefficiency as imposition of tariffs prevents productive specializations Krugman, Moreover, trade protectionism hampers complex global value chains. In manufacturing, the upstream process in the supply chain suffers due to production bottlenecks caused by escalated tariffs while the downstream phase loses the opportunity and benefits of upgradation. In a nutshell, the loss incurred by all the stakeholders in the global supply chain will not augur well for global prosperity.

Through massive improvement in infrastructure, ICT, communication and transportation the world is becoming more interlinked and, as a consequence, even a small disruption at times has unfathomable ramifications. On the flipside, there may be some countries that can take advantage of the current scenario. This trade war, for instance, affords an opportunity to Pakistan in terms of the relocation of Chinese industries to Pakistan.

But this opportunity is also available to many other countries and different analysts and experts are attempting studies to forecast these relocations, which likely depend upon the receptive or welcoming socio-political and economic environment of the host countries. The Government of Pakistan should also make the necessary arrangements in its legal and administrative setups, rules and procedures to take advantage of this opportunity.

Ahya, C. Analysis, B. Andriole, S. Arunachalam, S. Beinart, P. The Atlantic. CNBC, Dey, E. Dodovskiy, J. Research Methodology. Doorn, P. Market Watch. Feenstra, R. Offshoring the Global Economy. Goel, A. The New York Times. There are strong military ties between China and Pakistan. The strong military ties primarily aim to counter regional Indian and American influence, and was also to repel Soviet influence in the area.

In recent years this relationship has strengthened through ongoing military projects and agreements between Pakistan and China. Since , China has been a steady source of military equipment to the Pakistani Army , helping establish ammunition factories, providing technological assistance and modernising existing facilities. The Chinese has designed tailor-made advanced weapons for Pakistan, making it a strong military power in the South Asian region. The armies have a schedule for organising joint military exercises.

China has recently pledged to invest nearly 43 billion US dollars. In the past, China has played a major role in the development of Pakistan's nuclear infrastructure, especially when increasingly stringent export controls in Western countries made it difficult for Pakistan to acquire plutonium and uranium enriching equipment from elsewhere such as the Chinese help in building the Khushab reactor, which plays a key role in Pakistan's production of plutonium.

A subsidiary of the China National Nuclear Corporation contributed in Pakistan's efforts to expand its uranium enrichment capabilities by providing 5, custom made ring magnets, which are a key component of the bearings that facilitate the high-speed rotation of centrifuges. China has also provided technical and material support in the completion of the Chashma Nuclear Power Complex and plutonium reprocessing facility, which was built in the mids.

China, Pakistan and Afghanistan have coordinated to increase regional stability. Pakistan has been one of China's major trade partners. Recently though, economic trade between Pakistan and China is increasing, and a free trade agreement has been signed. Military and technological transactions continue to dominate the economic relationship between the two nations, and China has pledged to increase their investment in Pakistan's economy and infrastructure.

On 22 April , according to China Daily , China released its first overseas investment project under the Belt and Road Initiative for developing a hydropower station near Jhelum. The biggest development off late to open up the China-Pakistan Economic Corridor CPEC has changed the situation completely as China has carved an enormous plan for economic growth and development in Pakistan as pointed out below in the next section.

The journey takes two to three months, during which time the ships are vulnerable to pirates, bad weather, political rivals and other risks. Using Gwadar Port instead would reduce the distance and possibly the cost. The plan seeks to build on a market presence already established by Chinese enterprises, Haier in household appliances, ChinaMobile and Huawei in telecommunications and China Metallurgical Group Corporation MCC in mining and minerals.

In other cases, such as textiles and garments, cement and building materials, fertiliser and agricultural technologies among others it calls for building the infrastructure and a supporting policy environment to facilitate fresh entry. According to the plan, a key element in this is the creation of industrial parks, or special economic zones, would be done with the provision of water, perfect infrastructure, sufficient supply of energy and the capacity of self-service power.

But the main thrust of the plan actually lies in agriculture, contrary to the image of CPEC as a massive industrial and transport undertaking, involving power plants and highways. The plan acquires its greatest specificity, and lays out the largest number of projects and plans for their facilitation, in agriculture. For agriculture, the plan outlines an engagement that runs from one end of the supply chain all the way to the other.

From provision of seeds and other inputs, like fertiliser, credit and pesticides, Chinese enterprises will also operate their own farms, processing facilities for fruits and vegetables and grain. Logistics companies will operate a large storage and transportation system for agrarian produce, as stated by the plan in Dawn.

The other common investment is expected in information and technology, a full system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with hour video recordings on roads and busy marketplaces for law and order.

A national fibre-optic backbone will be built for the country not only for internet traffic, but also terrestrial distribution of broadcast TV , which will cooperate with Chinese media in the "dissemination of Chinese cultures". The support that China and Pakistan give each other is considered significant in global diplomacy, and has been compared to Israel—United States relations.

According to a Pew survey of Pakistani public opinion in , 84 per cent of respondents said they had a favourable view of China and 16 per cent had a favourable view of the United States. Pakistan and China have long praised the close ties the two countries have with each other. Pakistani President Pervez Musharraf referred to China as Pakistan's "time-tested and all-weather friend", while in return Chinese president Hu Jintao has referred to Pakistan as "a good friend and partner". The Guardian [69].

The author of The China-Pakistan Axis: Asia's New Geopolitics concludes the book by connecting the bilateral relationship to broader themes in Chinese foreign policy. According to the author, on the one hand, Pakistan is both a Chinese pawn against India and platform for power projection, but there are limits to this approach.

For instance, as Small notes, "Beijing's counterterrorism strategy has been essentially parasitic on the United States being a more important target for transnational militant groups than China. It's unclear how long that can last. From Wikipedia, the free encyclopedia. Redirected from China-Pakistan relations. If you love China, love Pakistan too. Main article: China—Pakistan Economic Corridor.

Pakistan, with its strategic position, natural resources and warm-water ports, has long been an ally of Beijing. The Chinese see the south Asian state, the closest they have to a friend both in south Asia and in the Islamic world, as important to the security and development of their western, predominantly Muslim provinces, and as a useful aide in efforts to counter the influence of India.

In recent years, links have grown closer. Indeed China's ties with Pakistan, which were established during Mao's rule and are based on shared hostility towards India, thrive on many common interests. A long history of secret deals between their two armies--overrides the problems with Islamic extremism.

China portal Pakistan portal Politics portal. BBC News. Retrieved 17 May The New York Times. Retrieved 12 October China Daily. Retrieved 14 November Archived from the original on 27 July Retrieved 12 July People's Daily. Retrieved 18 May Retrieved 13 May Retrieved 17 November Retrieved 26 December The Diplomat. Retrieved 11 January The Economist. Retrieved 12 February Wezeman and Pieter D. Archived from the original on 17 March Retrieved 17 March Retrieved 10 May Pervez Hoobhoy.

Colonial History, Part-I". Retrieved 12 September Religion Under Socialism in China. Archived from the original on 13 June Retrieved 24 August CS1 maint: archived copy as title link "Archived copy". Retrieved 5 August CS1 maint: archived copy as title link. Archived from the original on 19 September Archived from the original on 27 August People's Daily China. Retrieved 18 April Retrieved 20 April DAWN News. Archived from the original on 6 September Retrieved 9 August Retrieved 11 August Retrieved 30 December Council on Foreign Relations.

Archived from the original on 20 July Retrieved 16 July South China Morning Post. Retrieved 8 January Association for Asian Research. Archived from the original on 5 April Zee News Ltd. Strategic Security Project.

Federation of American Scientists.

VIDULICH INVESTMENTS THAT SHOOT

Similarly, in visualization of the Asian Century dream, India is also playing the major role of one of the progressive economic giants Ali Past researches have shown that Russia shares a cordial economic, political and military relationship with India specifically during cold war period Kumar and Chopra Russia has operated as the main supplier of arms equipment to India as well Rasul By including Russia into the project, it will kill two birds with one stone.

Consequently, India also must adjust itself in the evolving South Asian geopolitics Yang and Siddiqi Hence, India must monitor the promising Sino-Pak relationship alongside with the development of Triple alliance. Likewise, India must maintain its enhancing commercial and economic exchanges with China.

Thus, the powerful game of politics has taken control of entire South Asian region. The MoU is signed with the aim to assist the respected economies for confirming amplified economic activities. It anticipates establishment of the mutual beneficial plan of the project up to NDRC developed a formal body at a ministerial level named as Joint Cooperation Committee JCC for evolving and confirming several growing plans of Energy, Gwadar Projects and transport infrastructure between the both countries for assisting the vision of Pak-China economic corridor.

JCC is focused to ensure continuous supervision of operational activities; its members are selected by nomination from the two countries Ministry of Planning, D. The proposed ventures under CPEC are characterized into three stages, the short term projects are known as Early Harvest Projects which are envisioned to be accomplished till , the medium term projects are envisioned to be accomplished by and the long term plans by News This visualization was displayed in by Chinese President Xi Jinping who highlighted the promotion of trade network which connects China to Europe and Central Asia over three key corridors by northern, southern and central Xinjiang and it connects China to Pakistan and Russia to Europe.

Each journey is affected by the most precarious checkpoints at Passage of Malacca Cherng and Ouyang As currently, China is a dependent on these areas for its oil requirements. Further, this project will provide China access to the Kashgar special economic zone and the Indian Ocean. Thus, as long as western China acquires access to the Indian Ocean, it will surely take benefit of the surplus capital for supporting those areas in which funding is required for development purposes. In this way, CPEC will play a key role in decreasing the developmental gap between Chinese western and coastal cities.

In addition to this, the profit acquiring percentage is heavily in favor of China as compared to Pakistan as she believes in investment not in invasion. China is not only the second largest trade companion of Pakistan but also a huge investor in telecommunications, energy sectors, ports and infrastructure. Despite all military and political barriers of this project, it still has many advantages for whole nation.

Currently, Pakistan is facing major energy shortfalls and constricted trade with its abrupt neighbors, will have improved trade relations and will become energy-sufficient country. The CPEC will simplify movement of goods and services in the key trade regions, will transform rivals into stakeholders to preserve stability and peace in the Central Asian and South regions.

CPEC will also connect Pakistan to a country that is the hub of natural resources, Tajikistan, formerly it was a part of Soviet Union, having a population of 7. This country shares her borders with China, Afghanistan, Uzbekistan, and Kyrgyzstan. The Wakhan Corridor separates it from Pakistan in the area of Afghanistan. A recent report has claimed that CPEC will become active in and will generate revenue from around from 1. Such huge amount of revenue will economically fortify Pakistan.

On 8th November an agreement for evacuating energy crisis in Pakistan was signed by both the countries. Among countries, the improved logistics, upgraded infrastructure progress and enhanced transportation system are extremely important for economic well-being. De and Iyengar Despite of expected significant advantages of CPEC, Pakistan is dealing with many difficulties to implement this project.

These threats are internal as well as external. Firstly, it is feared that Pakistan can relapse into colonization changing its masters in the process. Secondly, it is anticipated that because of its huge size and economic ascendancy the bilateral trade might tilt in favor of the economically robust partner.

In terms of economic and political challenges, CPEC is considered as a biggest threat to its neighboring country, India. India considers this project as a sign of harm to its sovereignty. India also has a viewpoint that the strategic control of Indian Ocean will be captured by China through this smokescreen project called by India.

China expresses to involve India as an acceptance of its success in Central Asia. But, India resolutely holds that this association must bring territorial integrity and respect for sovereignty Durrani From the perspective of provincial government and religious parties ruling in Pakistan. Several parties have expressed severe concern regarding CPEC project. They also passed a resolution in the opposition of any route shift.

However, the problem arises as the original route was supposed to nourish under-developed areas of KPK Ahmad and Hong ; Mengal ;. While all the other provinces possess a weak power distribution system. Therefore, the increase in the energy production will not prove beneficial for the marginalized provinces Raza Resultantly, the government responded to the protests by repeatedly declaring that CPEC will prove beneficial for all the provinces in equal ways.

However, due to the lack of transparency in government initiatives, these opposition and fears may stimulate. As Beijing and Pyongyang ideological similarity strengthens bilateral alliance Byman and Lind Since that time, China aided economic and political support to the North Korean leaders.

Hence, North Korea had significant economic reliance over China. Their relationship was significantly apparent, since both shared key strategic challenges to the US and possessed the considerable conventional armed forces with booming ballistic missile projects as well Lee However, strains in their liaison began to appear when Pyongyang experimented a nuclear missile in At the internal and external level, the major risk is of security issues. Similarly, several international agencies are also against this project and are supporting these parties by assisting them to use terrorist elements to hinder Xinjiang to Gwadar port Khan On the other hand, few leaders of provincial political parties have argued that Punjab Province is given preference over underdeveloped cities of KPK and Balochistan Dawn In terms of area, Balochistan is the largest province of Pakistan and it is the smallest in terms of residents.

When compared over socio-economic stability of other provinces, Balochistan is the most underdeveloped province. Balochistan is one of the main trade routes through which water port of Gwadar will be connected to Kashgar city Bhutta Consequently, Baloch extremists have shown their hostility by attacking on trains, gas pipelines and killing Chinese engineers Ahmad In view of agreements, all the imported equipment will be exempted from tax.

Though, the approval procedure of FBR is inefficient which is negatively affecting the projects timelines in Pakistan. The government of China has also highlighted that the reduction in tariff for renewable energy will have a negative effect on CPEC project Rind This study has highlighted the critical issues and advantages of the CPEC, which is considered a part of String of Pearls strategy of China.

Past researches emphasized the significance of CPEC and highlighted that this project could become a game changer in Asia Ritzinger ; Yogesh Thus, CPEC is transforming into a ray of hope for collaboration between not only Pakistan and China but also among economically important countries like Afghanistan, Iran, and Turkey who wish to join this project. Commencing an economic cooperation among these countries will assist resolution of several matters and fortify peace in the whole economy Durrani ; De and Iyengar The relationship of Pakistan-China shares an exclusive stability for mutual benefits and collaboration that has weathered variations in the arena Jinchen This relation has multiple dimensions often considered as a strategic relation.

Though, in existing situation, there is a rising need to transform this mutual relation beyond labels and if so required, reanalyze its tactical proportions in consideration of new authenticities on the ground Beenish The CPEC may have positive effects so far however, its eventual success is subject to its capability towards regionalization and enhancement of its regional association.

For this purpose, it is necessary that CPEC should be indulged with the energy sector, trade hubs, and road networks beyond Pakistan and China bond Holmes Hence, despite many security and political challenges, analysts have the view that this project would reduce unemployment from many underdeveloped areas of Pakistan specifically Balochistan and KPK.

However, in order to fully utilize the economic benefits from this project Pakistan must proficiently deal with all challenges. Currently, Pakistan is dealing with terror on many fronts. In such conditions, it is difficult to maintain the sustainability of multibillion-dollar economic corridor. The violence and security threats against the project can delay the successful implementation of the project. In this regard, Pakistan should take serious measures to ensure safety and security of officials involved and projects related personnel and this finding is also supported by past research studies Khan ; Shehzad ; Nogales Hence, CPEC can transform the unstable economic situation into a stable and peaceful region and can boost world development by connecting both countries through subsidiary connections originating from Punjab and Kashmir.

Data sharing is not applicable to this article as no datasets are generated or analyzed in the current study. Ahmad, R. Art Social Science Journal 8 2. Ahmad, Waqar. Balochistan, CPEC another view. Islamabad: The Daily Times. Google Scholar. Ali, Akber. China Pakistan economic corridor: prospects and challenges for regional integration. Arts and Social Sciences Journal 7: 4. Ali, L. Jianing, M. Shah, A. Khan, and M. Transport culture akin to China Pakistan economic corridor.

Arif, M. Beenish, S. NDU Monograph 4 3. Bhattacharjee, D. Issue Brief. Delhi: Indian Council of World Affairs. Bhutta, Zafar. India bid to halt Pakistan projects fails. The Express Tribune. Bilal, M. Pak-China economic corridor: Geo-strategic importance of Pakistan. Policy Research Institute of Market Economy. Blah, M. Strategic Analysis 42 4 : — Byman, D. International Security 35 1 : 44— Chaudhri, M. Karachi: Royal Book Company, 2 17 , 67— Cherng, S, Ouyang.

Warsaw Economics University , 21 September Choi, J. The rise of Kim Jong Eun and the return of the party. International Journal of Korean Unification Studies 19 2 : — Chowdhury, D. South China Morning Post.

Sherpao opposes change in Pak-China economic corridor route. Dawn October Accessed 23 Dec De, P. Developing economic corridors in South Asia. Asian Development Bank. Dent, C. East Asian regionalism. Dhaka, A. Factoring Central Asia into China's Afghanistan policy. Journal of Eurasian Studies 5 1 : 97— Disk, N. Durrani, S. The Kashgar-Gwadar corridor. Karachi: The News. Fallon, T. American Foreign Policy Interests 37 3 : — Haider, M.

Economic corridor in focus as Pakistan. China sign 51 MoUs. Accessed 11 Dec Hameed, M. The politics of the China—Pakistan economic corridor. Palgrave Communications 4 1 : Hancock, T. China missionaries seek converts along the belt and road. Financial Times , August Holmes, J. The Diplomat , 9. Huasheng, Z. Afghanistan and China's new neighbourhood diplomacy. International Affairs 92 4 : — Irshad, M. One belt and one road: dose China-Pakistan economic corridor benefit for Pakistan's economy?.

Journal of Economics and Sustainable Development, 6 Javaid, U. Pakistan-China strategic relationship: A glorious journey of 55 years. Journal of the Research Society of Pakistan,52 1. Jabri, P. Associated press of Pakistan. Jain, R. China south Asian relations, New Delhi: Radiant. Pakistan-China strategic relationship: a glorious journey of 55 years. Journal of the Research Society of Pakistan 52 01 : — Jinchen, T.

Global Infrastructure Initiative website. Kabraji, R. The China-Pakistan Alliance: Rhetoric and limitations. Chatham House Asia Program. Khan, S. IPRI Journal, 13 2 , Khan, A. Pak-China economic corridor: The hopes and reality. Spotlight: Institute of Regional Studies. Khan, N. IPRI : 93— Kostecka, D. Naval War College Review 64 1 : 59— Kumar, Vinod, and A.

Impact of climate change on biodiversity of India with special reference to Himalayan region— An overview. Journal of Applied and Natural Science 1 1 : — Lee, S. North Korean Review 8 1 : 53— Xinhua net. Retrieved from XinhuaNet. Lim, A. The China-Pakistan economic corridor two years on. IPP Review , May Malik, Hasan Yaser. Strategic Importance of Gwadar Port. Journal of Political Studies 19 2 : Mangi, F. Memoona, et al. The growing economic ties between Pakistan and China and its impact on the economy of Pakistan.

Mengal, S. CPEC route controversy: Problems and opportunities. Bi-annual research journal. Initially, availability of cheap labour and market size attracted foreign companies. US companies were amongst the first to take advantage of this. They primarily entered into joint ventures — considering this a safer option. Till, , US exports to China were more than their imports. It was only in that China gained a trade surplus. It has not looked back since then; rather the trade gap in favour of china has been steadily widening.

The contribution of US companies in this remarkable progress included: investment FDI , transfer of technology, helping Chinese in exploring other markets, job creation and even exporting finished products back to the US. With this background, the US, in July , imposed punitive tariffs which made imports from China less viable. This has also created surplus supplies in China, especially in steel and aluminum sectors. In addition, this study also takes into account domestic political and economic reasons — the populist perspective that compelled President Trump to impose punitive tariffs on Chinese imports.

The US has also frequently accused China of violating intellectual property laws, stealing industrial secrets and adapting industrial policies with inbuilt export subsidies that provide an undue advantage to its industries. At the end, some possible implications of this trade war for Pakistan will be also be touched upon.

USA and China are leading world economies. Economic ties between the two countries were almost nonexistent till s. Their economies were also different at that point in time. In the late s and thereafter China initiated market reforms and opened its market to other countries. USA was one of the first to take advantage of these reforms. Till , the trade balance was in favour of USA.

Since then, however, it has tilted in favour of China — and this trade gap has been widening, to the unrest of the Americans Beinart, The authors have analyzed the historical context of US-China Trade, its burgeoning deficit in favour of China and its impact on US politics with the ascendancy of nationalist populists.

The authors have also briefly touched upon the idea that US companies have greatly assisted China to develop by offering technology and capital; and integration through joint ventures has not only benefitted the US economy but has been an important factor in global economic growth.

Morrison talked about the growing violations of China on patents, copy rights and intellectual property. F, Current trends also indicate that China is the biggest spender in the world on research of Artificial Intelligence and modern technologies. As a result it is highly likely that the trade gap between the two countries will continue to expand Andriole, Some authors have also analyzed the imposition of the punitive tariffs and have concluded that these tariffs may also fail to bring about the desired result Feenstra, There have been some voices in the US, that have been pressing the government to value the economic relation with China in a more constructive way rather than from a threat perspective Stephen S Roach, He also emphasized that there was a need for other countries to emulate the example of China for the collective good of the world community.

The second source of wealth is the ability of multinationals to obtain information. Multinationals spend enormous amounts to understand global markets, recruit internationally skilled personnel and analyze social and political environments. US companies, for instance, were among the first to invest in China after it opened up to the world.

They took advantage of being pioneers in this initiative and developed a resource base of the political realities of china, its legal system and socio cultural values. They also gathered vital business information such as sources of material and financing, distribution channels, labour management relationships, etc.

Zander, China, on the other hand, also encouraged foreign companies. The final stage is the availability of options that provide multinationals discretionary choices of altering real economic activities or financial flows from one country to another. A mixed research method has been adapted for this study, which includes interviews from some of the primary sources, who were the beneficiaries of US investment in China steel and aluminum sector.

Most of the questions posed to these primary sources were open ended and an interview-based technique was adapted. Cautious effort was made to make the interviewees comfortable, so that they could express their thoughts openly and candidly.

This data was consolidated and analyzed and conclusions were drawn accordingly using thematic and narrative analysis techniques and approaches. The period researched was onwards — once China liberalized its investment and trade regime — therefore, various data sources, including websites maintaining trade and investment data, were frequently consulted.

Some informal interviews of various Chinese involved in the business of steel and aluminum have been extremely helpful in understanding the impact of these tariffs on the domestic industry. The US has recently withdrawn exemptions granted to India on various products including textiles, agriculture, leather and auto parts due to the failure of India to open its market for US products. An effort has been made to analyze this aspect as well. Since the establishment of US-China diplomatic relations, economic and trade relations between the two countries have developed immensely.

China has been enjoying a trade surplus with USA since The major products imported by USA from China are electronics, clothing and machinery. These production facilities have taken away US jobs. The US President made promises during his election campaign to bring back these jobs. However, US consumers have also benefitted from these low prices.

The tariffs on China represent a fundamental retreat by the US from the global trading system. In the past the US supported free trade and upheld this position on various occasions. Now the question arises — how will this trade war affect not only these two countries but the world?

According to the International Trade Centre, the US and Chinese global exports account for around one-fourth of the world exports. Even before the current steps taken by US government to correct the trade imbalance, China had been deemed as a threat by different US companies on the pretext of stealing intellectual property, deliberately devaluing Yuan to leverage partial advantage in exports, dumping its product in the international market at low prices due to the availability of cheap labour, etc.

The increase in international trade has increased the interdependence of countries. The trade war between China and the US is, therefore, impacting the world. As per the theory of international trade — cooperation and rule-based systems lead to global welfare, while a competitive approach is likely to generate suboptimal results. A trust deficit between trading nations escalates into protectionism and thus into economic isolationism.

This has been aggravated by American apprehension of being dominated by China as a global economic super power — due to its remarkable progress over the last four decades. These fears may be unfounded because still there is a huge gap between the GDP per capita in nominal and Purchasing Power Parity of the two countries as indicated in Table No.

Additionally, it is pertinent to mention here that the accelerated growth of China was always considered as a threat by numerous US governments over the decades. All sorts of allegations have been levelled against China, ranging from undervaluing currency to dumping to stealing technology to violating human rights, etc.

Accordingly, it is likely that these US companies may become victims of this trade war and may resist any such move s. Prior to , the only commercial relation between China and the outside world was through foreign trade. Direct Foreign Investment was not permitted in China. The program required foreign capital. To attract foreign capital and technology, China allowed joint ventures in Within the next two decades China became the biggest recipient of FDI in the developing world.

Some inherent factors helped China in attracting FDI, which include: a market size b an abundant skilled and semi-skilled labour availability c Infrastructure d the role of the Chinese diaspora as a source of foreign capital and expertise. During the Asian financial crisis in the s there was a slight decrease in FDI. Data for is particularly impressive considering the financial crisis that hit the fast-growing emerging market economies of Asia with full force. This partly reflects the desire of US investors to leverage the benefits available in China, which, in turn, helped China to integrate itself with global supply and production chains.

These joint ventures helped US firms to minimize their business risks by developing partnerships. Chinese economic rise is one of the most spectacular developments in the post World War II era — eclipsing the fabulous rise of Germany and Japan. In China overtook Japan to become the third largest exporter in the world after USA and Germany, and, three years later, it became the second largest exporter.

Since , China has been the largest exporting nation. Domestic production networks in China have successful integrated to achieve economies of scale during this period. China has been making rapid progress in the production and supply of machinery, which shifted towards ICT and high-tech products during the last decade.

In terms of labour supply, China had the advantage of having an abundance of supervisory, midlevel and unskilled cheap workforce. Moreover, China acceded to the World Trade Organization in , which also set a favorable ground for business operations. There are possibly four Labour-related reasons behind the increase in manufacturing exports in China. Secondly, there are vast pools of cheap labour still available in interior provinces of the country.

This gives them the option to relocate their manufacturing to these areas to counter rising wages in the coastal areas. Thirdly, the increase in labour costs has largely been offset by a reduction in the cost of services through trade and investment policy reforms, and, more importantly, improvement in the provision of trade related infrastructure. Lastly, China has the advantage of being able to meet labour requirements for large scale assembly operations within the global production network.

Initially, these companies were importing raw material from USA and using China only for production of finished products to capitalize on cheap and trainable labour. This trend slowed over the years, as these companies have started to find suppliers of raw materials within China and the region. These changing trade patterns are reflected in the bilateral trade data.

This is contrary to popular perception in USA regarding massive consumer product procurements by Walmart or other US retail stores. They have shifted the final assembly processes to China while retaining mostly product design, global marketing and other headquarter functions in the US. The winning strategies of China include economic liberalization, a focus on high technology and an array of comparative advantages offered by cheap and trainable labour.

This has been supplemented by massive development in transportation, communication and Information Technology during the last three decades. China also transformed its command and control model of economy to a market driven economy which assisted in integrating China with the global economy and helped attract technology and FDI.

US Companies like Apple and Tesla are heavily investing in China and are also engaged in technology transfers. Nike is now doing better in China than its traditional markets like Latin America. Tesla is already feeling the heat of these tariffs as it has major stakes in the Chinese market. Tesla plunged as much as 6. Similarly, USA is also the preferred destination for Chinese students and expatriates.

Leading Chinese technology companies like Huawei are using semi-conductors of Apple. Many primary sources were contacted. They greatly helped in understanding the dynamics of these complex relations and how this would affect the future of both countries and the region. In order to complete this task many interviews were held with people associated with CPEC. These interviews were mostly unstructured.

Open-ended questions were asked so that the interviewees could express their views openly and as per their liking. Two experts dealing with the subject who need a special mention in this regard are: Mr. Badar u Zaman helped me in understanding the history, dynamics and coverage of the corridor.

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HIG GROWTH EQUITY FUND II INVESTMENT

They also gathered vital business information such as sources of material and financing, distribution channels, labour management relationships, etc. Zander, China, on the other hand, also encouraged foreign companies. The final stage is the availability of options that provide multinationals discretionary choices of altering real economic activities or financial flows from one country to another. A mixed research method has been adapted for this study, which includes interviews from some of the primary sources, who were the beneficiaries of US investment in China steel and aluminum sector.

Most of the questions posed to these primary sources were open ended and an interview-based technique was adapted. Cautious effort was made to make the interviewees comfortable, so that they could express their thoughts openly and candidly. This data was consolidated and analyzed and conclusions were drawn accordingly using thematic and narrative analysis techniques and approaches. The period researched was onwards — once China liberalized its investment and trade regime — therefore, various data sources, including websites maintaining trade and investment data, were frequently consulted.

Some informal interviews of various Chinese involved in the business of steel and aluminum have been extremely helpful in understanding the impact of these tariffs on the domestic industry. The US has recently withdrawn exemptions granted to India on various products including textiles, agriculture, leather and auto parts due to the failure of India to open its market for US products. An effort has been made to analyze this aspect as well. Since the establishment of US-China diplomatic relations, economic and trade relations between the two countries have developed immensely.

China has been enjoying a trade surplus with USA since The major products imported by USA from China are electronics, clothing and machinery. These production facilities have taken away US jobs. The US President made promises during his election campaign to bring back these jobs. However, US consumers have also benefitted from these low prices. The tariffs on China represent a fundamental retreat by the US from the global trading system.

In the past the US supported free trade and upheld this position on various occasions. Now the question arises — how will this trade war affect not only these two countries but the world? According to the International Trade Centre, the US and Chinese global exports account for around one-fourth of the world exports.

Even before the current steps taken by US government to correct the trade imbalance, China had been deemed as a threat by different US companies on the pretext of stealing intellectual property, deliberately devaluing Yuan to leverage partial advantage in exports, dumping its product in the international market at low prices due to the availability of cheap labour, etc. The increase in international trade has increased the interdependence of countries. The trade war between China and the US is, therefore, impacting the world.

As per the theory of international trade — cooperation and rule-based systems lead to global welfare, while a competitive approach is likely to generate suboptimal results. A trust deficit between trading nations escalates into protectionism and thus into economic isolationism.

This has been aggravated by American apprehension of being dominated by China as a global economic super power — due to its remarkable progress over the last four decades. These fears may be unfounded because still there is a huge gap between the GDP per capita in nominal and Purchasing Power Parity of the two countries as indicated in Table No.

Additionally, it is pertinent to mention here that the accelerated growth of China was always considered as a threat by numerous US governments over the decades. All sorts of allegations have been levelled against China, ranging from undervaluing currency to dumping to stealing technology to violating human rights, etc.

Accordingly, it is likely that these US companies may become victims of this trade war and may resist any such move s. Prior to , the only commercial relation between China and the outside world was through foreign trade. Direct Foreign Investment was not permitted in China. The program required foreign capital. To attract foreign capital and technology, China allowed joint ventures in Within the next two decades China became the biggest recipient of FDI in the developing world.

Some inherent factors helped China in attracting FDI, which include: a market size b an abundant skilled and semi-skilled labour availability c Infrastructure d the role of the Chinese diaspora as a source of foreign capital and expertise. During the Asian financial crisis in the s there was a slight decrease in FDI.

Data for is particularly impressive considering the financial crisis that hit the fast-growing emerging market economies of Asia with full force. This partly reflects the desire of US investors to leverage the benefits available in China, which, in turn, helped China to integrate itself with global supply and production chains.

These joint ventures helped US firms to minimize their business risks by developing partnerships. Chinese economic rise is one of the most spectacular developments in the post World War II era — eclipsing the fabulous rise of Germany and Japan. In China overtook Japan to become the third largest exporter in the world after USA and Germany, and, three years later, it became the second largest exporter. Since , China has been the largest exporting nation. Domestic production networks in China have successful integrated to achieve economies of scale during this period.

China has been making rapid progress in the production and supply of machinery, which shifted towards ICT and high-tech products during the last decade. In terms of labour supply, China had the advantage of having an abundance of supervisory, midlevel and unskilled cheap workforce. Moreover, China acceded to the World Trade Organization in , which also set a favorable ground for business operations. There are possibly four Labour-related reasons behind the increase in manufacturing exports in China.

Secondly, there are vast pools of cheap labour still available in interior provinces of the country. This gives them the option to relocate their manufacturing to these areas to counter rising wages in the coastal areas. Thirdly, the increase in labour costs has largely been offset by a reduction in the cost of services through trade and investment policy reforms, and, more importantly, improvement in the provision of trade related infrastructure. Lastly, China has the advantage of being able to meet labour requirements for large scale assembly operations within the global production network.

Initially, these companies were importing raw material from USA and using China only for production of finished products to capitalize on cheap and trainable labour. This trend slowed over the years, as these companies have started to find suppliers of raw materials within China and the region. These changing trade patterns are reflected in the bilateral trade data. This is contrary to popular perception in USA regarding massive consumer product procurements by Walmart or other US retail stores.

They have shifted the final assembly processes to China while retaining mostly product design, global marketing and other headquarter functions in the US. The winning strategies of China include economic liberalization, a focus on high technology and an array of comparative advantages offered by cheap and trainable labour. This has been supplemented by massive development in transportation, communication and Information Technology during the last three decades.

China also transformed its command and control model of economy to a market driven economy which assisted in integrating China with the global economy and helped attract technology and FDI. US Companies like Apple and Tesla are heavily investing in China and are also engaged in technology transfers. Nike is now doing better in China than its traditional markets like Latin America.

Tesla is already feeling the heat of these tariffs as it has major stakes in the Chinese market. Tesla plunged as much as 6. Similarly, USA is also the preferred destination for Chinese students and expatriates.

Leading Chinese technology companies like Huawei are using semi-conductors of Apple. Many primary sources were contacted. They greatly helped in understanding the dynamics of these complex relations and how this would affect the future of both countries and the region.

In order to complete this task many interviews were held with people associated with CPEC. These interviews were mostly unstructured. Open-ended questions were asked so that the interviewees could express their views openly and as per their liking. Two experts dealing with the subject who need a special mention in this regard are: Mr. Badar u Zaman helped me in understanding the history, dynamics and coverage of the corridor.

He also connected me to many Chinese exporters, businessmen and Pakistani entrepreneurs dealing with Chinese Companies. It may also be added here that I also visited China four times during June-December in an official capacity and had a chance to interact with more than Chinese companies. Chinese Businessmen, like Mr. The Chinese government is also offering subsidies and preferred loans for these relocations.

Mr Wang is also facing closure of his factories in China and has already relocated his project to Thatha District and has stated exporting to USA. In case of textile, Challenge apparel has already started production in the suburbs of Lahore. They are also considering another plant in Karachi, to avoid inland freights, as most of their products are exported to European Union and USA. These personal interviews with dozens of Chinese companies and visiting their plants in China and Pakistan has broadened my vision regarding CPEC.

This study concludes that there is a huge trade imbalance between the US and China which has resulted in escalating tensions between the two. These tensions will keep surfacing in the future due to the nature of the economic and political relations between the two countries.

Efforts by world leaders to take measures to correct trade imbalances lead to economic nationalism and protectionist policies. These policies may prove counterproductive in the long run and can have a negative impact on the multilateral trading system and decrease global economic welfare.

It took another fifty years to create the WTO regime in These efforts can be jeopardized if nations start taking protectionist and nationalist trade measures. Thus, international organizations and world leaders need to collaborate through bilateral and multilateral discussions to amend trade tensions and guard against threats to the multilateral trading structure of the world. If this trade war between these two economic giants continues and becomes more intense then its effects would not be restricted to just the US and China.

This will also affect Chinese manufacturers and government as it may potentially decrease the inflow of FDI coupled with a negative effect in the acquisition of technology, especially in Artificial Intelligence Protectionist policies would hurt manufacturing and may lead to job losses in both countries and also other countries associated with this supply chain in any context.

These two have announced to abandon their plans to setup production plants in Mexico. There have been some statements appearing in the media that suggest that companies are also considering relocating to other countries like India, Vietnam, Pakistan if these tariffs continue, rather than returning to the US. It may be added here that the US government has also recently announced to strip exemptions granted to Indian textiles, leather, jewelry, auto parts and agriculture products from 5 th June, Goel, , which indicates that the US would be pursuing protectionist policies in the future, as well.

Though the Chinese government has taken a degree of measures during the last two decades to improve their record. Likewise, aggressive trade policies containing hidden subsidies are also likely to affect the international reputation of China as a business leader. On the other hand, the US President also needs some prudent advice to pursue open market policies and to avoid disrupting the free flow of international trade.

USA is the largest export destination of Pakistan, while China is the largest trading partner of Pakistan. USA has been a strategic ally of Pakistan. With China, Pakistan has enjoyed friendly political and strategic relations, which are now translating to economic relations with the start of the China Pakistan Economic Corridor CPEC and, since the past five years, China has been the largest source of inbound FDI.

With this background, Pakistan is likely to get affected by this trade war more than any other country. The challenges and ramifications for Pakistan are however still shrouded in mystery and uncertainty. The best outcome for Pakistan would be normalization of relations between the two world powers, which will also be good for global political and economic order.

Despite problematic issues pertaining to global trade — such as environment, economic displacements, generation of a skewed distribution of gains from trade, etc. As Paul Krugman puts forth, the global powers opting for protectionism have to bear the cost of inefficiency as imposition of tariffs prevents productive specializations Krugman, China also has a consistent record of supporting Pakistan in regional issues. Pakistan's military depends heavily on Chinese armaments , and joint projects of both economic and militaristic importance are ongoing.

China has supplied blueprints to support Pakistan's nuclear program. However these prints and designs were not decipherable due to their sophisticated scientific and mathematical language. Only Pakistani nuclear physicists qualified in the field and educated abroad were able to make sense of the designs and their requirements for the specific materials needed to build the bomb. Amin argues that the basis of the Sino-Pak entente from its beginning has been "a mutual need to pool together resources to contain perceived Indian aspirations to hegemony over South Asia".

Buddhist monks from the area of what is now Khyber Pakhtunkhwa region of Pakistan were involved in the Silk Road transmission of Buddhism to Han dynasty China. Faxian travelled in what is now modern-day Pakistan. Japan's history of imperialism was explained by Du to his fellow Muslims. The Chinese Muslim's anti-Japanese war effort received a pledge of support from Jinnah. Diplomatic relations between Pakistan and China were established on 21 May , shortly after the Republic of China lost power in the Mainland in India had recognised China a year before, and Indian Prime Minister Nehru also hoped for closer relations with the Chinese.

With escalating border tensions leading to the Sino-Indian war , China and Pakistan aligned with each other in a joint effort to counter India and the Soviet Union as both have border disputes with India. One year after China's border war with India, Pakistan ceded the Trans-Karakoram Tract to China to end border disputes and improve diplomatic relations.

Since then, an informal alliance that initially began as mutual opposition towards India has grown into a lasting relationship that has benefited both nations on the diplomatic, economic and military frontiers. Along with diplomatic support, Pakistan served as a conduit for China to open up to the West. China has in turn provided extensive economic aid and political support to Pakistan.

Since the two sides established their "all-weather diplomatic relations", there have been frequent exchanges between the two countries' leadership and peoples. For example, former Chinese Premier Zhou Enlai received warm welcomes in all of his four visits to Pakistan.

Upon arriving at the ministry, the ambassador cried due to his grief in front of Chinese diplomats. It is the first road in Pakistan that is named after foreign leaders. On 27 May , then Chinese leader Mao Zedong , aged 83, received his last foreign guest Pakistani president Zulfiqar Ali Bhutto despite his critical illness, days before his death. On 22 May , Chinese Premier Li Keqiang 's airplane was escorted by six JF Thunder jets, jointly developed by the two countries, as it entered Pakistani airspace.

On 20 April , Chinese President Xi Jinping visited Pakistan as his first foreign visit of the year, also the first by a Chinese president in 9 years. Before his arrival, he published an article praising the friendship on Pakistani newspapers like Daily Jang.

The Chinese president compared visiting Pakistan with visiting his brother's home. Xi was given a grand welcome upon his arrival at Noor Khan airbase, a gun salute and guard of honour was presented to him. When I was young, I heard many touching stories about Pakistan and the friendship between our two countries.

To name just a few, I learned that the Pakistani people were working hard to build their beautiful country, and that Pakistan opened an air corridor for China to reach out to the world and supported China in restoring its lawful seat in the United Nations. The stories have left me with a deep impression. I look forward to my upcoming state visit to Pakistan.

Pakistan's military initially depended almost entirely on American armaments and aid, which was increased during the covert U. The U. The Pressler Amendment in suspended all American military assistance and any new economic aid amidst concerns that Pakistan was attempting to develop a nuclear weapon.

This belief was further strengthened as India had developed a nuclear weapon without significant American opposition, and Pakistan felt obligated to do the same. Consequently, the primarily geopolitical alliance between Pakistan and China has since branched out into military and economic cooperation, due to Pakistan's belief that the U.

With the U. Since the September 11 attacks , Pakistan has increased the scope of Chinese influence and support by agreeing to a number of military projects, combined with extensive economic support and investment from the Chinese. In July , Pakistan was one of 50 countries that backed China's policies in Xinjiang , signing a joint letter to the UNHRC commending China's "remarkable achievements in the field of human rights", claiming "Now safety and security has returned to Xinjiang and the fundamental human rights of people of all ethnic groups there are safeguarded.

In November , Pakistan was one of 54 countries that signed a joint statement supporting China's Xinjiang policies. There are strong military ties between China and Pakistan. The strong military ties primarily aim to counter regional Indian and American influence, and was also to repel Soviet influence in the area. In recent years this relationship has strengthened through ongoing military projects and agreements between Pakistan and China.

Since , China has been a steady source of military equipment to the Pakistani Army , helping establish ammunition factories, providing technological assistance and modernising existing facilities. The Chinese has designed tailor-made advanced weapons for Pakistan, making it a strong military power in the South Asian region.

The armies have a schedule for organising joint military exercises. China has recently pledged to invest nearly 43 billion US dollars. In the past, China has played a major role in the development of Pakistan's nuclear infrastructure, especially when increasingly stringent export controls in Western countries made it difficult for Pakistan to acquire plutonium and uranium enriching equipment from elsewhere such as the Chinese help in building the Khushab reactor, which plays a key role in Pakistan's production of plutonium.

A subsidiary of the China National Nuclear Corporation contributed in Pakistan's efforts to expand its uranium enrichment capabilities by providing 5, custom made ring magnets, which are a key component of the bearings that facilitate the high-speed rotation of centrifuges. China has also provided technical and material support in the completion of the Chashma Nuclear Power Complex and plutonium reprocessing facility, which was built in the mids.

China, Pakistan and Afghanistan have coordinated to increase regional stability. Pakistan has been one of China's major trade partners. Recently though, economic trade between Pakistan and China is increasing, and a free trade agreement has been signed. Military and technological transactions continue to dominate the economic relationship between the two nations, and China has pledged to increase their investment in Pakistan's economy and infrastructure.

On 22 April , according to China Daily , China released its first overseas investment project under the Belt and Road Initiative for developing a hydropower station near Jhelum. The biggest development off late to open up the China-Pakistan Economic Corridor CPEC has changed the situation completely as China has carved an enormous plan for economic growth and development in Pakistan as pointed out below in the next section.

The journey takes two to three months, during which time the ships are vulnerable to pirates, bad weather, political rivals and other risks. Using Gwadar Port instead would reduce the distance and possibly the cost. The plan seeks to build on a market presence already established by Chinese enterprises, Haier in household appliances, ChinaMobile and Huawei in telecommunications and China Metallurgical Group Corporation MCC in mining and minerals.

In other cases, such as textiles and garments, cement and building materials, fertiliser and agricultural technologies among others it calls for building the infrastructure and a supporting policy environment to facilitate fresh entry. According to the plan, a key element in this is the creation of industrial parks, or special economic zones, would be done with the provision of water, perfect infrastructure, sufficient supply of energy and the capacity of self-service power.

But the main thrust of the plan actually lies in agriculture, contrary to the image of CPEC as a massive industrial and transport undertaking, involving power plants and highways. The plan acquires its greatest specificity, and lays out the largest number of projects and plans for their facilitation, in agriculture. For agriculture, the plan outlines an engagement that runs from one end of the supply chain all the way to the other.

From provision of seeds and other inputs, like fertiliser, credit and pesticides, Chinese enterprises will also operate their own farms, processing facilities for fruits and vegetables and grain. Logistics companies will operate a large storage and transportation system for agrarian produce, as stated by the plan in Dawn. The other common investment is expected in information and technology, a full system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with hour video recordings on roads and busy marketplaces for law and order.

A national fibre-optic backbone will be built for the country not only for internet traffic, but also terrestrial distribution of broadcast TV , which will cooperate with Chinese media in the "dissemination of Chinese cultures". The support that China and Pakistan give each other is considered significant in global diplomacy, and has been compared to Israel—United States relations.

According to a Pew survey of Pakistani public opinion in , 84 per cent of respondents said they had a favourable view of China and 16 per cent had a favourable view of the United States. Pakistan and China have long praised the close ties the two countries have with each other. Pakistani President Pervez Musharraf referred to China as Pakistan's "time-tested and all-weather friend", while in return Chinese president Hu Jintao has referred to Pakistan as "a good friend and partner".

The Guardian [69]. The author of The China-Pakistan Axis: Asia's New Geopolitics concludes the book by connecting the bilateral relationship to broader themes in Chinese foreign policy. According to the author, on the one hand, Pakistan is both a Chinese pawn against India and platform for power projection, but there are limits to this approach.

For instance, as Small notes, "Beijing's counterterrorism strategy has been essentially parasitic on the United States being a more important target for transnational militant groups than China. It's unclear how long that can last. From Wikipedia, the free encyclopedia. If you love China, love Pakistan too. Main article: China—Pakistan Economic Corridor. Pakistan, with its strategic position, natural resources and warm-water ports, has long been an ally of Beijing.

The Chinese see the south Asian state, the closest they have to a friend both in south Asia and in the Islamic world, as important to the security and development of their western, predominantly Muslim provinces, and as a useful aide in efforts to counter the influence of India. In recent years, links have grown closer. Indeed China's ties with Pakistan, which were established during Mao's rule and are based on shared hostility towards India, thrive on many common interests.

A long history of secret deals between their two armies--overrides the problems with Islamic extremism. China portal Pakistan portal Politics portal. BBC News. Retrieved 17 May The New York Times. Retrieved 12 October China Daily. Retrieved 14 November Archived from the original on 27 July Retrieved 12 July People's Daily. Retrieved 18 May Retrieved 13 May