Strategic Role of CPEC in Reshaping Regional Trade Routes and Foreign Investment Dynamics An International Business Perspective

Abstract

China-Pakistan Economic Corridor (CPEC) is a blue-chip project of the Belt and Road Initiative by China, which has become a game changer in terms of position of infrastructural cooperation and economic development in South and Central Asia. CPEC plans to strategically link Xinjiang, China with Gwadar Port, Pakistan, to bring-down costs associated with transportation, trade connectivity, and encourage activities of foreign direct investment (FDI) into the area. Yet, although the geopolitical interest towards the corridor has been paid, the strategic meaning of the corridor concerning the international business has been under-studied. The proposed research will help in evaluating how CPEC has transformed the structure of regional trade corridors and foreign investment landscape with reference to the evolution in trade flows, the robustness of logistics performance, and the orientation towards industry-based investment. A mixed-method was adopted under which I used both secondary data of the trade and investments made in the past five years (2013-2024) and semi-structured interviews with 20 stakeholders, all members of policymakers, economists, and international investors. The findings depict sharp growths in FDI inflow with special mention of Chinese inflows, better logistics performance, increasing the trade routes towards the Central Asia and the Middle East as well as diversified sectoral investments gone beyond the energy sector to industrial regions and ICT. Observers gave credit to CPEC in fostering confidence among investors and improving the efficiency of trade as well as identifying threats posed by regulations and hazards associated with depending on Chinese financing too much. CPEC is strategic in the redistribution of economic geography of the South Asia since it improves connectivity, trade, and the attractiveness of investments. Nevertheless, the long-term success will rely on state-misrule improvements, interregional relation, and streamlining of investments.