Micro Impacts of a Macro‐Level Trading Partnership: Effects of China’s Belt and Road Initiative in Pakistan

• Author: Muhammad Shoaib,Komal Niazi,Song Qiulian
• Date: 01 January 2020
• DOI: http://doi.org/10.1111/ajes.12307
• Published date: 01 January 2020

Micro Impacts of a Macro-Level Trading

Partnership: Effects of China’s Belt and

Road Initiative in Pakistan

By Komal Niazi*, muhammad Shoaib†, and SoNg QiuliaN‡

abStract. Trade and investment lead to economic development of

regions and nations. Economists focus on the benefits derived from

these activities, but there are also costs, many of which go unnoticed

in studies that examine the aggregate effects of projects. This article

examines the effects on one village in Pakistan of the construction of

two coal-fired power plants that are elements in the China-Pakistan

Economic Corridor (CPEC), which is the largest component of China’s

Belt and Road Initiative to develop Asia. Although the newly produced

roads and electric power from CPEC will help solve the macro-level

problems of Pakistani development, the local residents who are

displaced from their farmland to make construction possible fare

badly. Losing their farms has not only meant being forced to take jobs

that pay much less than agriculture. It has also fractured the social ties

that bind together the local community and provide residents with

self-respect. The effects have been particularly harmful to the status of

women. Viewed as a microcosm of the costs of trade and investment,

the village of Qadirabad is a symbol of how well-meaning projects

contribute to the deterioration of small-scale communities and the

growth of urban slums around the world.

American Journal of Economics and Sociology, Vol. 79, No. 1 (January, 2020).

DOI: 10.1111/ajes.12307

© 2019 American Journal of Economics and Sociology, Inc.

*Graduate student in the School of Sociology and Anthropology, Sun Yat-Sen

University, Guangzhou, China. Email: niazi.komal_leo@yahoo.com or niazi@mail2.sysu.

edu.cn

†Department of Humanities, COMSATS University Islamabad, Pakistan. Email:

shoaibm37@yahoo.com

‡Relics and Museology, Anthropology Museum of Guangxi, Nanning, Guangxi

Zhuang Autonomous Region, China. Email: 286393857@qq.com

302 The American Journal of Economics and Sociology

Introduction

China’s Belt and Road initiative (BRI) is a large-scale program that

covers Asia, Africa, and Europe. It is frequently referred to as one of

President Xi Jinping’s signature programs, for the political and eco-

nomic capital the Xi administration has already spent on it is sub-

stantial. The grand scale of the BRI and diversity of its projects have,

however, attracted diverse views over the years. Some consider it

part of China’s grand strategy to lay the ground for a Sino-centric

order; others view it as China’s effort to move beyond its status as

the world’s factory and diversify engagements, investments, and trade

routes (Chatzky and McBride 2019). Whichever position is closer to

the truth, BRI projects have, so far, shown that China aims to create a

new trading bloc in the Eastern Hemisphere.

The Belt and Road Initiative has significance far beyond the nations

that are directly involved. BRI has the potential to reorient the nature

of global trade for many years, perhaps even decades. In the 20th cen-

tury, the rules of trade have been largely dictated by Europe and the

United States. They largely control the major international financial

institutions: the World Bank, the International Monetary Fund, and the

World Trade Organization. Resistance to that eurocentric world order

has been growing in recent decades. In 1991, several Latin American

nations formed Mercosur (Southern Common Market), a regional eco-

nomic compact to encourage commerce among the member nations.

Other small trading blocs have formed in other regions. BRI is the

largest trading bloc ever envisioned, and it has implications far be-

yond regional economic cooperation. If it is successful in focusing

Eurasian trade inward, it will have the effect of limiting the economic

power of the United States. As Cavanna (2018) explains:

The United States’ response to a rising China has largely focused on bolster-

ing military capabilities, doctrines, and partnerships in the Asia-Pacific (or,

more recently, the Indo-Pacific). This approach misconstrues the problem:

it overstates the security threat and understates (or ignores) the economic

challenge. To maintain its dominant position globally in the long-term,

the United States must reckon with the ambitious geo-economic endeavor

Beijing has launched to project strategic influence across the Eurasian

continent, which hosts most of the world’s economic centers and natural