Impact of China-Pakistan Economic Corridor (CPEC) on Pakistan’s Trade: Empirical Evidence from Gravity Model

Purpose: The China–Pakistan Economic Corridor (CPEC) is anenormous project for both economies. There are much potentialremunerations for concerning frugalities in trade and industries of bothcountries. The study was specifically designed to examine the influence ofCPEC on fruits export of Pakistan. The bilateral or regional trade wasexamined through Gravity approach. Data was taken from 2013 to 2015.Since distance plays a vital role in trade, the outcomes of gravity model areestimated with ordinary least square method. Pakistan China EconomicCorridor is a mega project for both economies. It will make Pakistan andChina, the major economic players in the region and further enhanceeconomic conditions of both countries. Some of the basic determinations ofPak-China economic corridor are to boost business opportunities, efficienttransport routes and expanding regional trade. The export target of Pakistanwas $US 20 billion in 2013-2015. As of April 2015, Pakistan exports standat$ US 6,178 billion. Pakistan’s exports to Asia was amounted to $US1,649 billion which was 42 percent of its overall exports and the share offruit and nuts markets in Pakistan’s export was$ US 1,017 billion. Thepaper analyses the CPEC’s impact on exports especially exports from fruitmarket of Pakistan using Gravity Approach for the evaluation of thisbilateral trade. The results show that CPEC reduces the distance and it willbe more beneficial for perishable goods trade like fruits