While in Pakistan for yet another round of negotiations aimed at securing another loan, the IMF demands have stirred confusion and unrest. This development bodes poorly for the prospects of CPEC Phase-II. Over time, a profound sense of bilateral trust and understanding has emerged between Pakistan and China, fostering a heart corridor between the two nations and their people. This bond is rooted in shared values of mutual respect, solidarity, and support.
Right from the beginning, the successive leadership of both countries constantly fortified the strategic trust between the two countries, strengthened ties across multiple domains and built an even stronger China-Pakistan Community of Shared Future in the New Era. The new government under the leadership of Prime Minister Shehbaz Sharif is striving hard to further strengthen bilateral relations through further socio-economic integration, connectivity, security, prosperity and massive industrialization under the flagship project of CPEC Phase-II.
Most recently, Pakistan and China intensified efforts to establish a Working Group on five new economic corridors under the CPEC Phase-II aligning with the 5Es framework prepared by the Planning Ministry. While meeting, the Federal Minister of Planning, Development & Special Initiatives, Ahsan Iqbal with the Chinese envoy, Jiang Zaidong, both sides agreed to accelerate the CPEC Phase-II and establish a working group on five new economic corridors, including the Corridor of Job Creation (CJC), Corridor of Innovation (CI), Corridor of Green Energy (CGE), and Inclusive Regional Development (IRD).
It was decided that both the Planning Ministry (PM) and the National Development and Reform Commission (NDRC) of China would prepare separate concept papers on the new economic corridors, providing a clear roadmap for each sector in the future. These concept papers will be consolidated for presentation at the upcoming Joint Coordination Committee (JCC) meeting expected in 2024.
Additionally, the Planning Ministry has initiated implementing the 5Es framework—Export, Energy, Equity, E-Pakistan, and Environment—aligning with Prime Minister Shehbaz Sharif’s vision to advance Pakistan’s prosperity. The minister emphasized the importance of accelerating exports through enterprise development and job creation. Furthermore, during a meeting, the minister outlined a strategic approach to maximize the success of Special Economic Zones (SEZs) in Pakistan. He proposed a “one plus four” model, partnering each SEZ with a Chinese province, an industry group, a Chinese SEZ for technical expertise, and a state-owned enterprise to lead SEZ development. This collaborative agenda aims to expedite SEZ establishment and growth, enhancing competitiveness and attractiveness to investors.
On its part, the Chinese ambassador appreciated Pakistan’s efforts to implement the CPEC, particularly the initiation of CPEC Phase-II. He termed the efficiency of SEZs vital for Pakistan’s economic and industrial development which will increase foreign exchange. He suggested that officers in charge of SEZs must visit Chinese industrial parks to observe firsthand the efficiency measures practiced by Chinese authorities. The ambassador further highlighted Pakistan’s commendable transition from an agricultural to an industrial economy.
The Minister of Planning Ahsan Iqbal pinpointed that the success of SEZs depends on their ability to become clusters of specific industries, fostering economies of scale, and creating a vibrant ecosystem conducive to innovation and growth. Thus persuasions of a cluster economic and industrial development model would foster sustainable development in the country.
Both sides thoroughly discussed and focused on enhancing regional connectivity, with a special emphasis on critical infrastructure projects like the Gwadar Port and the M-8 motorway, which will strengthen economic, industrial and trade links and facilitate regional integration in the days to come.
According to China’s National Development and Reform Commission (NDRC), CPEC has created 450,000 jobs, of which 350,000 allocated to Pakistani workers. Similarly, CPEC has helped Pakistan mitigate the energy crisis/deficit. Until now, CPEC’s power projects such as the Sahiwal Coal plant and Port-Qasim Power Plant and transmission projects such as Matiari-Lahore high voltage direct current (HVDC) have generated almost 8500 MW electricity in Pakistan.
It seems that Pak-China agriculture cooperation is gaining momentum and the first shipment of dry chillies from Pakistan has further enhanced it, opening new avenues of mutual cooperation and coordination. Meanwhile, Pakistan received 160 electric buses from a Chinese company and inaugurated the Saindak Expansion Project in Balochistan.
On the other hand, the Department of Higher Education Khyber Pakhtunkhwa (KPK) and the CPEC Cultural Communication Centre of China signed an MoU aiming to enhance the skilled workforce in the province by training digital skills to around 200,000 students. Hopefully, these initiatives will not only increase the confidence of the young generation but also make CPEC a successful venture.
Principally, Pakistan has to develop nine special economic zones, out of which three are priority. These include Dhabeji SEZ, Allama Iqbal Industrial City and Rashakai Economic Zone. The first phase of Rashakai SEZ and Gwadar Free Zone SEC has been functional and operating. Now it is an ideal time to initiate development work on the other SEZs.
In summary, there is an urgent need to settle pending dues of the Chinese private companies working in the different projects of CPEC in the country. 3S policies i.e. safety, security and strategic role of the SIFC must be followed and implemented in true letter and spirit. The government has opened a Pakistan Energy Revolving Account (PERA) with State Bank of Pakistan (SBP) for all commissioned IPPs including the Chinese companies. The PERA has been adequately funded by the Government of Pakistan.
Overhauling of superior bureaucracy, inclusion of technocrats, active participation of private sector of Pakistan, meaningful financial input of domestic banking industry, formation of public, private partnership in green technologies mainly, solar, wind, hydrogen power generation, hydro-nuclear energy units, lithium, quantum and nuclear batteries and last but not least, installation of EVs plants in the country would further foster development of CPEC Phase-II in the country.
Pakistan’s industry, economy, agriculture, and environment require the addition of integrated corridors to the Ministry of Planning’s list. These include the Corridor of Hybrid Agriculture (CHG) for new crops and land transformation, the Corridor of Artificial Intelligence (CAI), the Corridor of Small & Medium Enterprises (SMEs), the Corridor of Supply Chains (CSCs), the Corridor of Disaster Management (CDM), and the Corridor of Human Capital Development (CHCD). The Planning Ministry must avoid superficial and temporary development approaches in this regard.
Both countries should collaborate on implementing “New Productive Products” in Pakistan’s diverse economy and industry, introducing new economic drivers to advance towards a smart economy, industrial production, and investments. Strategic aerial connectivity and industrial clusters with the Xinjiang region would enhance outreach to Chinese markets. The new government should adopt a zero-tolerance policy towards terrorism, corruption, bureaucratic hurdles, and political instability.
