Despite whims and wishes, CPEC Phase 2.0 has not yet gained any “momentum” in Pakistan due to many “multidimensional” reasons, ranging from structural flaws, an unproductive bureaucratic system, imbalanced policymaking, isolated safety and security of Chinese investors and workers and the total failure of Pakistan Planning Commission and Finance Ministry to devise any “alternative” mechanism to “pay back” long-pending payments of Chinese IPPs.
Emerging socio-economic preferences, geopolitical readjustments and geo-strategic outreach have badly “derailed” the pace, productivity and progress of CPEC Phase 2.0. The Pak-US “Metals & Minerals” Corporation has “annoyed” Beijing and “dried” Chinese investments, while inclusion of France, UK, Germany and Turkiye in minerals exploration has further “irked” the Chinese.
Increasing Pak-US ties are fueling “speculations” of Islamabad shifting from Beijing to Washington DC, creating insecurity among the two “Iron Clad” brothers. Policymakers should “reevaluate” geopolitical end gains and socio-economic profit and loss ratios before indulging in a new end game because variables of reliability, durability and trustworthiness have a “bitter” history in Pakistan’s past alliance with the USA. Prominent security expert Dr Moeed Yusuf, during the Margalla Dialogue 2025, floated an out-of-the-box idea of “US-China” joint cooperation in Pakistan’s metals and minerals sector, offering ample opportunities for regional countries in safety and security. However, due to emerging regional and global metals and minerals geopolitics, the scope of such an arrangement is unlikely to materialize.
The deteriorating law and order situation in the KP and Balochistan, coupled with a surge in terrorism by TTP, BLA, MB, FS, the recent activation of ISIS in Afghanistan, Iraq, Syria and Australia and the East Turkestan Islamic Movement (ETIM), has further slowed CPEC Phase 2.0 development. Although defence forces and secret agencies are “striving” hard and successfully “neutralizing” terrorist sanctuaries, foreign sponsorship and the arrival of new international terrorist players from the Middle East remain a serious problem.
The “assassination” of Chinese workers at the Tajikistan border through a “drone attack” and killings in Afghanistan highlights the presence of “evil” proxies and predators working against Pakistan-China interests. Indian RAW, MI6 and Israel are allegedly “instigating” young Balochs and investing even in young girls to strengthen human suicidal forces targeting Chinese investments in Balochistan and Gwadar. Hence, a joint and “grand” anti-terrorism dialogue among Pakistan, China and Afghanistan is the need of the hour. Senior army and intelligence officials from Islamabad and Beijing should hold a series of meetings to jointly “tackle” emerging threats and devise a new security strategy.
The Financial Times news on “Pasni seaport” has also alarmed the Chinese due to Gwadar’s strategic importance. The timing and geographical proximity of both ports cast doubts about future cooperation, which must be clarified at the highest level.
Financial constraints have become a “troll” between the countries. Long-pending dues to Chinese private energy companies have “sucked” prospects of new investments. Islamabad’s inability to propose “alternative” financial solutions has prevented many JCCs from achieving “consensus” or roadmaps for future CPEC Phase 2.0 projects. Structural backwardness has placed CPEC Phase 2.0 on the “back burner.” No substantial work is being carried out in pledged Economic Free Zones and political blame games between Muslim League (N) and PTI perpetuate a futile “zero-sum narrative.”
“Personified” politics are badly hurting the prospects of common people’s prosperity and the Planning Commission has miserably failed to prepare any true plan for the revival of CPEC Phase 2.0 or to attract substantial investment. Constant decline in FDI inflows is alarming and requires rectification by all stakeholders. Deep-rooted corruption and “Elite Surrender,” highlighted in the IMF’s recent report are another invisible hurdle. Outdated and “stereotypical” bureaucracy has forced foreign investors to stay away, while the prevailing economic growth model is not creating any “space” for “industrious” people. The brain drain of the young generation should serve as an eye-opener for policymakers.
There should be no compromise on the safety and security of Chinese workers and investors, which would boost confidence between the two countries and prevent the “flat fall” of CPEC Phase 2.0. Meaningful proposals to enhance safety and security of the Chinese must be prepared and implemented, not confined to cosmetic statements or political rhetoric. Formation of a “joint Pak-China drone surveillance system,” constant information sharing, joint anti-terrorism initiatives and implementing a “Syrian Model” to stop infiltrations and protect Chinese people within Afghanistan could be a practical choice for complete eradication of terrorism in the region. Chinese policymakers must leverage socio-economic and geopolitical influence over Taliban and TTA to realize this workable solution.
The issue of pending dues of Chinese energy IPPs may be resolved through the launch of “Panda Bonds” in the Chinese market, along with payment of principal from “excess liquidity” of domestic banks. The Finance Ministry must gradually pay back the pending dues of Chinese private companies. Policymakers on both sides must think beyond short-term gains, as Pakistan geographically is the shortest route for trans-regional connectivity between South Asia and Central Asia. Gwadar Seaport can also be effectively utilized for China’s imports and exports to the Middle East and Africa.
Undoubtedly, CPEC Phase 2.0 is a “blessing,” and its early execution, implementation and completion is the need of the hour. Beyond Afghanistan, policymakers should consider “clubbing” CPEC and BRI through Karakoram Highway to Xinjiang and Khorgos dry port, along with a jointly populated Wakhan Corridor, which would add substantial value and enhance regional trade and connectivity.
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