IMPACT OF CHINESE FOREIGN DIRECT INVESTMENT ON RECIPIENT COUNTRIES (CASE OF PAKISTAN)

Objective: The article investigates the economic impact of Chinese Foreign Direct Investment (FDI) on recipient countries, focusing on Pakistan as a case study. The goal is to analyze how Chinese FDI influences Pakistan's economic development, particularly through the China-Pakistan Economic Corridor (CPEC) and other initiatives. Methods: The study utilizes data from various sources, including the World Bank, Ministry of Commerce of the People's Republic of China, and Pakistan's Bureau of Statistics. It employs correlation modeling and graphical analysis to examine the relationship between Chinese FDI and Pakistan's GDP growth. The analysis also considers environmental and social impacts, using data from the China Global Investment Tracker. Results: The findings indicate a strong positive correlation (85%) between Chinese FDI and Pakistan's GDP growth. Chinese investments, particularly in energy and infrastructure, have significantly contributed to the country's economic development. However, some negative impacts, such as increased CO2 emissions and environmental risks, were also identified. Contribution: This research provides valuable insights into the dual nature of FDI: while it can drive economic growth, it may also have negative environmental consequences. The study recommends that Pakistan's government actively manage incoming FDI by prioritizing eco-friendly projects and renewable energy investments. Conclusion: The study concludes that Chinese FDI has had a largely positive impact on Pakistan's economy, especially in terms of infrastructure and energy sector development. However, to maximize benefits and minimize environmental harm, the authors suggest that recipient countries, like Pakistan, adopt more strategic policies in managing foreign investments.