CPEC Phase 2.0 has been hailed as a “bridge of culture and economy” by Pakistan’s federal minister of information, highlighting its strategic importance, utility and scope. It has dominated the country’s press in 2025 due to its multidimensional socio-economic benefits, including progress, prosperity, productivity, connectivity and infrastructure development. However, the initiative has faced sponsored criticism, negative reporting and allegations of debt orientation and exploitation, especially in English-language newspapers, generating confusion about its pace and trajectory.
The rapidly changing regional socio-economic dynamics, geopolitical tensions and global geostrategic shifts have also impacted CPEC’s productivity within Pakistan. Nevertheless, the enduring Pak-China friendship has remained strong, diversified and participatory. Pakistan’s ability to outsmart Indian forces during the May 2025 war vividly demonstrated the strategic essence of this partnership, supporting Pakistan’s defense, sovereignty and territorial integrity. Even China’s diplomatic engagements with India did not diminish its commitment to Pakistan’s development, reflecting the strategic depth of bilateral relations.
High-level visits, particularly Prime Minister Shehbaz Sharif’s meetings with Chinese President Xi Jinping and Premier Li Qiang, quelled speculations about modifications in Pakistan’s foreign policy. Sensitive issues such as the alleged construction of the Psani Seaport, metals and minerals cooperation and increasing military collaboration with the United States, however, continue to send mixed signals.
The Chinese ambassador in Islamabad, H.E. Mr. Jiang Zaidong, has worked tirelessly to facilitate CPEC Phase 2.0, strengthening bilateral relations in economy, investment, joint ventures, industrial cooperation and military coordination. Throughout 2025, joint air-force and naval drills reaffirmed the stability of Pak-China ties, dispelling misperceptions of declining friendship. The launch of the fourth Hangor-class submarine, “GHAZI,” at Wuhan’s Wuchang Shipbuilding Industry Group underscores this enduring military cooperation amid rising regional and global geopolitical pressures.
Deputy Chinese ambassador Mr. Shi Yuanqiang actively promoted CPEC projects, technological and energy cooperation and deeper bilateral ties. Through think-tank meetings, public diplomacy initiatives and media engagement, he consistently countered Western criticism of CPEC and reinforced the strategic partnership between the two nations.
Despite challenges in CPEC Phase 2.0 development, Punjab remained a focal point for Chinese investors in 2025. H.E. Zhao Shiren, Chinese Consul General in Lahore and his team played a pivotal role in promoting business-to-business activities and facilitating high-level agreements. A major deal was signed to establish a 300-acre industrial park under Sino Pak Tech Industry (Pvt.) Ltd, attracting USD 1.5 billion in foreign direct investment. The park will host units in textiles, automotive, pharmaceuticals and other sectors, creating thousands of jobs.
Energy cooperation between Pakistan and China continues to advance. The 884 MW Suki Kinari, 1,124 MW Kohala and 1,410 MW Tarbela 5th Extension Hydropower Projects exemplify collaborative efforts to counter India’s water-related policies. CPEC Phase I previously restored Pakistan’s energy security, adding over 8,000 MW to the national grid through 17 major projects worth nearly $18 billion. Connectivity has also been enhanced via 888 kilometers of modern highways, integrating Pakistan’s regions into a unified economic space.
Nonetheless, despite political rhetoric and high expectations, the 14th Joint Cooperation Committee (JCC) meeting in Beijing failed to deliver tangible results for accelerating CPEC Phase 2.0 toward high-quality, inclusive and people-centered development. Geopolitical competition, particularly in metals and minerals, is reshaping South Asia, Central Asia, Latin America and Africa, slowing CPEC’s progress. Regional instability, such as ongoing Middle East conflicts, has socio-economic and geopolitical spillovers that affect Pakistan’s position, while Islamabad’s foreign policy shifts toward Washington have unsettled Chinese policymakers.
The growing global race for rare earth elements has further complicated trans-regional connectivity and economic integration. Rising US interest and investment in Pakistan’s metals and minerals sector has generated doubts about the long-term implications for Pak-China cooperation. Additionally, cross-border terrorism in Balochistan and KPK has posed security challenges to CPEC projects, though Pakistan’s armed forces and intelligence agencies are actively mitigating these threats.
For the swift revival of CPEC Phase 2.0, Pakistan requires an overhaul of the inefficient bureaucratic system. Strengthening coordination between the Special Investment Facilitation Council (SIFC) and relevant policy-making institutions will accelerate project implementation. Completion of Special Economic Zones (SEZs) with private sector participation is critical for attracting Chinese investments. Innovative funding mechanisms, including allocations from the NFC and potential utilization of undocumented resources, could expedite SEZ development in KPK and Balochistan. Pending payments to Chinese energy IPPs may be resolved through Panda Bonds and enhanced domestic banking liquidity.
Safety measures, such as creating a 25–30 km buffer zone for Chinese personnel working on CPEC projects, could enhance security while supporting regional connectivity. Furthermore, China’s policy establishment of a strategic media group—including sinologists, economists, IR experts and security analysts—would counter Western criticism and reinforce the strategic narrative surrounding CPEC and Pak-China relations.
The writer also proposes conceptual frameworks to strengthen economic and social cooperation, such as the Corridor of Knowledge, Corridor of Green Transformation and Corridor of Quality Development/Industrialization, alongside joint development of Middle Corridors. Pakistan’s inclusion in BRICS Plus, deeper engagement with the SCO Plus and stronger trilateral anti-terrorism cooperation with China, Iran and Afghanistan will serve as catalysts for CPEC Phase 2.0 and Pak-China relations in 2026 and beyond. Prioritizing policies over personalities, harnessing private sector participation and leveraging changing geopolitics are essential to ensuring sustainable development.
Finally, Chinese policymakers should recognize that while short-term gains from engaging with Bangladesh, Uzbekistan, Kazakhstan or Kyrgyzstan may exist, Pakistan’s strategic geography and shared economic interests offer long-term benefits for regional connectivity and stability. The enduring Pak-China friendship, backed by CPEC, remains a cornerstone for economic development, strategic alignment and regional integration in the years ahead.
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