THE IMPACT OF CHINESE INFRASTRUCTURE PROJECTS ON DEVELOPMENT OF HOST ECONOMIES: EMPIRICAL EVIDENCE FROM PAKISTAN ECONOMY

STANOJEVIĆ Nataša (Professor, Faculty of Economics and informatics - Dositej, Belgrade, Serbia), natasa1171@gmail.com

This paper examines the impact of Chinese investments in infrastructure facilities within the Belt and Road initiative (BRi) on the economies of host countries. Pakistan was selected for the case study as one of the first destinations of Chinese FDi within the BRi, which allows necessary time distance for the research. its important geographical position at the new Silk Road traces, a significant amount of Chinese investment, and evidence of both positive and negative effects of Chinese penetration, are the additional reasons for choosing Pakistan for a case study. Using Multivariate Analysis methods, the impact of Chinese FDi and total FDi on several key economic indicators of Pakistan are measured and compared separately. The results show a much stronger and more positive impact of Chinese investment than total FDi but also point to the direction of a change, such as increasing of import, and potential challenges, such as external debt to China.

Keywords: China, Pakistan, FDi, infrastructure, Belt and Road initiative. JEL codes: F21, F43