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Environmental and social risk evaluation of overseas investment under the China-Pakistan Economic Corridor

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Abstract

Along with the further implementation of the “One Belt, One Road” initiative and the promotion of the China-Pakistan Economic Corridor (CPEC), the construction of the CPEC will likely face challenges owing to differences between China and Pakistan in politics, economics, culture, religion, language, customs, environmental management systems, environmental protection laws, social management systems, and social management regulations. To address potential environmental and social risks associated with Chinese enterprises as they invest in the CPEC region, this paper examines previous studies addressing topics such as the environmental and social safeguards of international institutions and Pakistan’s domestic environmental and social management requirements. We then systematically identify the environmental and social risk factors involved in CPEC construction, which cover risks regarding water, air, soil, noise, biodiversity, politics, economics, culture, technology, and individuals. By establishing and calculating these risks and using a multi-fuzzy comprehensive evaluation model, we found that noise and individual risks belong to a medium risk category, while others belong to a higher risk category. In view of these risks, the Chinese government must create a friendly and peaceful environment for Chinese enterprises to invest in the CPEC region, and Chinese enterprises must adopt a development strategy of strength and capacity building and establish enterprises capable of addressing environmental and social issues during the investment process. All stakeholders must understand that if no determined and diligent steps are taken, CPEC construction might be doomed for failure from the start.

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Acknowledgments

The authors are grateful to all the survey participants and workshop participants. This study was sponsored by the National Social Science Fund [grant number 13&ZD172, 15BSH037] and the Jiangsu Social Science Fund [grant number 15SHB004]. The authors are grateful to Hohai University and anonymous reviewers.

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Authors and Affiliations

  1. School of Public Administration, Hohai University, No. 8, Focheng West Road, 21100, Nanjing, People’s Republic of China

    Ruilian Zhang, Francis Andam & Guoqing Shi

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  1. Ruilian Zhang
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  2. Francis Andam
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  3. Guoqing Shi
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Correspondence to Ruilian Zhang.

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Zhang, R., Andam, F. & Shi, G. Environmental and social risk evaluation of overseas investment under the China-Pakistan Economic Corridor. Environ Monit Assess 189, 253 (2017). https://doi.org/10.1007/s10661-017-5967-6

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