The two nations celebrate 11th anniversary of the China-Pakistan Economic Corridor (CPEC) which has great significance. It has substantially consolidated Pakistan’s macro-economy and various associated sectors and sub-sectors. China has emerged as Pakistan’s biggest investors, stimulators and facilitator providing notable investments, concessional & unconditional loans, and brotherly grants that have been pivotal in driving Pakistan’s growth in right direction but unfortunately various internal factors and external forces succeeded to derail its economy through constant political instability and social polarization.
The CPEC has not only strengthened provincial, regional and trans-regional connectivity but has also boosted long-term collaboration. China’s investment has further transformed Pakistan’s infrastructure, energy, and production sectors. It showcases a visionary commitment that has significantly shaped the trajectory of Pakistan’s economic sectors. Right from the beginning, China pledged to invest US$60 billion in investments aimed at invigorating Pakistan’s infrastructure, energy, and production sectors.
According to many published reports, news items and research papers, CPEC was estimated to create over 2.3 million jobs between 2015 and 2030 and contribute an additional 2.0 to 2.5 percentage points to Pakistan’s GDP. Therefore, the CPEC should not be treated merely as an investment but a strategic stimulus poised to regenerate Pakistan’s national economy. Frankly speaking it remained a real lifeline to the country’s sinking economy promoting the message of stability, sustainability and systematic development. Thus it has transformative power and highlights the deepening Pak-China partnership.
Critical analysis upholds that during the last 11 years China’s investment of over US$25.4 billion in Pakistan has overpoweringly affected key sectors mainly transport, energy, and infrastructure which vividly reflects Beijing’s strong commitment of improving connectivity and promoting economic growth. Additionally, China also provided much needed 30 billion yuan in loans and the creation of a currency swap arrangement which are now promoting financial integration and banking cooperation. Thus modernization and digitalization of banking & financial sectors is the need of hour.
The Chinese loans and grants secured Pakistan’s financial stability and further strengthened its debt management capabilities. It eased the pressure of debt repayments but also allowed Pakistan to diversify its trade options, decreasing its dependence on the dollar and improving its foreign exchange reserves. It simply underscores China’s role in reinforcing Pakistan’s economic resilience.
Building of the Special Economic Zones (SEZs) was formed to attract substantial investment and drive economic growth. Till today, four of these SEZs are nearing operational status, projecting a significant landmark in the CPEC’s development. Hopefully, the remaining five SEZs are expected to become fully functional by 2030. Obviously, CPEC has made significant development in expanding Pakistan’s power generation capacity. It addresses the immediate demands but also sets the stage for a more sustainable and environmentally conscious future. Actually, it diversified its energy sources and transformed Pakistan into an energy-surplus country. It represents a strategic shift that fosters industrial growth and enhances economic stability. Afterwards it has become a magnet for the FDIs projecting CPEC’s role in reshaping Pakistan’s economic domain.
It remained one of the biggest supporters of Pakistan’s blue economy, with Gwadar port standing out as a central success. In near future Gwadar would be a thriving maritime hub, actively facilitating global trade and commerce. It would play an important role in Pakistan’s economic strategy and emphasizes the substantial benefits of CPEC for both nations. Initially designed to connect Gwadar Port with China’s Xinjiang region, CPEC has expanded into a comprehensive initiative that includes energy projects, infrastructure development, and industrial collaboration.
The transformation of the Gwadar Port into a fully operational trade centre is a demonstration to CPEC’s ambitious scope and its potential to drive significant economic growth. It carries a wide vision, where infrastructure improvements and strategic investments not only elevate Pakistan’s economic standing but also reinforce the bilateral ties between China and Pakistan.
CPEC Phase-II promises a significant expansion of the initiative. The new phase further widens the project’s scope beyond its original focus, incorporating agriculture and information technology into its ambit. It aims to enhance economic collaboration and technological integration, reflecting a strategic evolution in China’s ambitious BRI.
Beijing’s promise of an additional US$1 billion grant to Pakistan underscores a deepening partnership rooted in shared prosperity. Notably, over 35,000 Pakistani students are currently benefiting from educational opportunities in China, reflecting the rich cultural and academic exchange between the countries. According to different sources, the CPEC Phase-II plans to complete 63 new projects, with an estimated value of US$35 billion by 2030. This ambitious expansion highlights a mutual commitment to not only enhancing regional connectivity but also to fostering economic integration that reaches into Afghanistan and Central Asia.
Its future is bright promising significant transformation, as both countries work together to realize a vision of holistic outlook and comprehensive development and cooperation based on qualitative industrialization, digitalization, ICT, Artificial Intelligence, hybrid agriculture, science & space development reinforcing the strategic importance of their joint cooperation on regional as well as global stage. The policy makers of Pakistan should try to include new projects of hydrogen power generation, lithium battery, solar panels production, EVs and last but not least, green energy technologies to promote community development, poverty eradication, women empowerment and generation of new jobs.
The CPEC Phase-II should be primarily focused on business-to-business arrangements, especially in the industrial sector. Decision to send 1,000 Pakistani agricultural graduates to China for advanced training should be formulated and implemented as soon as possible. It seems that the necessity of adopting modern technology and methods is necessary to increase agricultural output and the development of the value-added products for export. China could be a crucial partner in achieving these objectives. Coordinated efforts should be initiated to pursue the Chinese entrepreneurs, investors and businessmen to engage in business-to-business agreements with their Pakistani counterparts. Joint ventures between Pakistan and China in the textile industry and agricultural production should also be launched, with the products from these ventures exported to markets with high taxes. Both countries should adopt joint mechanisms for creating mutually beneficial propositions.
