China Pakistan Economic Corridor (CPEC)

The CPEC is a passage being built by China which will be about 1100 km. It was
originally estimated to be $46 Billion but currently it has been valued over $62 Billion. It will
connect the Gwadar Port in Pakistan to Kashgar in China’s Xinjiang Province. From the
Gwadar port it will go to Kashgar through Dera Ismail Khain, Pakistan and Gilgit Baltistan,
POK.

This corridor will help in the development of the western region of China and also
help in the development of Pakistan. China currently uses the Panama Canal to trade with the
USA, when the CPEC gets completed and operatable, it will make the trade route more
economical and shorter. China is divided in two parts by any imaginary line known as the Hu
Huanyong line. The western part which has 53% of the total area of China has only about 6%
of the total population of China, the rest 94% people live in the eastern region. Xinjiang is in
the western part, which unlike its eastern counterpart hasn’t been developed; so with the
CPEC the western part will get developed and China’s area can be used effectively.

The Gwadar port is located about 600km away from the Strait of Hormuz, an Iran
controlled water channel. 35% of the world’s oil requirement passes through this Strait.
When the CPEC gets completed China will be able to control the oil market. Also, in case of
any future confrontation between Israel an iran or possible threat of seizure of canal, the
world will look to China to intermediate between them.

China already has its ports in Maldives, Somalia, Sudan, Sri Lanka and Bangladesh
once CPEC is completed china will have a complete dominance in the Indian ocean; which
will help in its ambition of encircling India through a network of airfields and ports. CPEC is
poised to speed up Pakistan’s economic progress. Due to the corridor the rail and road
connectivity will be improved and this can help Pakistan to emerge as a key destination for
contract manufacturing outsourcing for the western economies; at a time when Bangladesh is
performing poorly on quality and India is becoming costlier this will be a better option for
other countries.

CPEC passes through Gilgit which is in POK and according to Simla agreement no 3 rd
party can construct its assets in the region and conflicts will not be solved by the third party.
Hence China is violating the peace agreement by building its assets in Gilgit. Also, China
may build a navy base in Arabian Sea so India will have to invest more amount in our navy.
Maybe India will have to invest 4% of our GDP for our defense, while currently we are
spending 2.4%.

Meanwhile, India has committed to about $21 billion to Chabahar-Hajigak corridor in

Iran; wherein $85 million will be for the port development, $150 million as line of credit to
Iran, $8 billion fir Indian industrial investment in Chabahar Special Economic Zone, $11
billion for Hajigak iron and steel mining project and $2 billion for infrastructure development
in Afghanistan. This Chabahar Port is at about only 79 km from the Gwadar Port. If CPEC
gets completed then the advantages which India is trying to gain will go to China.