Under ‘One Belt One Road’ initiative, China has introduced a new model of economic development of cross‐continental connectivity. With all its promising prospects, the initiative raises a question how such grand designs are going to impact the institutions of countries susceptible to potentially adverse impacts of Chinese investments. The case study of Pakistan — the closest ally of China — is a good example. China has started investing more than $50 billion in energy, industrial and communication infrastructure across the country. But the combination of too much and too quick Chinese investments — free of ‘governance‐related conditionalities’ normally attached with Western aid — and Pakistan’s domestic issues has some adverse impacts on latter’s internal politics and state institutions. Lack of transparency, civil‐military divide, ethnic differences, discrediting media, widening current account deficit, securitisation of trade and undoing the economic reforms (undertaken under International Monetary Fund program) are some of the unfavourable aspects of China–Pakistan Economic Corridor.