China as a development finance actor: a study on the quality of the Chinese proposal of development in the CPEC

The aim of this thesis is to answer this research question: how can we evaluate the quality of the development strategy proposed by China to developing countries, based on Pakistan's experience? Since China’s emergence as a major global actor, it has increased its activities in development finance, especially through the use of its policy banks, which have many dissimilarities to the development finance strategy offered by Western-led multilateral development banks (MDBs). To understand the risks, advantages, and potential compatibility with Western-led development finance, this thesis uses the China-Pakistan Economic Corridor (CPEC) as a case study. The first chapter analyses the various global providers of development finance and the difference between the Chinese model and the Western model. The second chapter uses available official data on CPEC to examine the progress in infrastructural projects until now and contains a literature review on the potential benefits and risks for both countries related to the Corridor. The third chapter is dedicated to quantitative research on the themes of security, trade flow, foreign direct investments, debt, type of loan, energy, environmental condition, and social development using multiple databases and research, so investigate on multiple levels how CPEC has impacted Pakistan. The fourth chapter discusses the benefits and challenges in Pakistan since the inception of CPEC: there are still security threats related to terrorist groups, problems in the allocation of resources, and serious environmental issues related to CPEC. The positive results are that CPEC infrastructural projects have employed over half a million residents, increased access to education and business opportunities, alleviated the problem of the energy crisis, and helped decrease Pakistan’s poverty headcount. The quality of the development strategy proposed by China is a multifaceted issue, which has as its main strengths its flexibility, speed, and accessibility, which makes it an effective solution to address some pressing development challenges in the world. These are also its weaknesses because, due to its lack of conditionalities, the recipient countries often do not have an initial structure sufficient to ensure the success of the project, which can lead to security, political, and environmental issues.