PAKISTAN-CHINA

The BRI in Pakistan: China’s flagship economic corridor

CPEC is a flagship project of One Belt One Road

China Pakistan Economic Corridor (CPEC) – a billions of dollars mega economic project – is
actually the leading manifestation of the Chinese One Belt One Road (OBOR) vision. Being
the first of its form and now almost in practice, CPEC not only brings the dream of OBOR
into reality but also changes the economic, strategic and pollical status quo of regional
relations.

Understanding CPEC and OBOR:

China Pakistan Economic Corridor is a mutual economic venture between China and
Pakistan on the formula of give and take. China is investing over $50 billion in Pakistan’s
infrastructure and energy sectors in return for access to the country’s routes leading to
Gwadar port. The port will ultimately enable the Chinese goods to reach the African and
Middle Eastern markets using the shortest possible way from the Western China.

One Belt One Road, on the other hand, is a mega vision of China to connect the whole
region and beyond into a single network of transit routes using which China can carry its
products to most of the Asian and European countries. OBOR remains to be the most
important step of China to be a superior economic power replacing the United States.

CPEC as Flagship of OBOR:

Flagship means to be in leading position in a venture. As far as CPEC is concerned, it is truly
the flagship of OBOR owing to the following reasons:

 CPEC turns out to be one of the most important links in the OBOR network that
will allow China to reach the markets of Africa, Middle East and Europe
 CPEC stands out to be the first such project that has been materialized in no
time and it is almost in the starting phase of its practice
 Providing the shortest link between three continents, allowing massive trade
transit and connecting the Chinese dots of OBOR; CPEC remains a flagship of
the One Belt One Road vision.

How CPEC is Game Changer?

CPEC is game changer in the region owing to following reasons:

 It is ensuring unprecedented ties between China and Pakistan on the economic

grounds
 It has brought Russia, U.K, Iran and Central Asian Republics to revive their
attention towards Pakistan and the South Asian region

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  It is building the economic connectivity between Africa, Middle East and Asia
along with seeking access to the European markets
 It is altering the regional strategic balance by marking a shift in alliances
 New political and economic blocs are surfacing with new visions owing to the
CPEC
 It is altering the regional approach from protectionism towards liberalism of
trade and shared prosperity.
OBOR is the long term economic and strategic vision of the Chinese people
while
CPEC is the leading practical manifestation in this regard. With its apparent benefits to
China, Pakistan and other regional countries; CPEC stands out to be a game changer as well
altering the regional alliances and shifting the balance of power.
Measures to improve security of Balochistan with respect to CPEC:
CPEC and security conditions in Baluchistan

Baluchistan is turning out to be the most important link and first destination of the China
Pakistan Economic Corridor. Besides home of the Gwadar Port, it is of vital importance for
success of CPEC. Amid this scenario, the security situation of the province is becoming an
important concern for the Pakistani government and the Chinese stakeholders. With proper
action against the militants and effective dialogue with the separatists along with giving due
share from CPEC to Baloch people; things can be improved.

Present Security Situation of Baluchistan in Respect of CPEC

Currently, Baluchistan is facing following kinds of threats to its security thus hampering the
successful operation of CPEC:

 Hideouts and activities of militants being supported by external powers to

sabotage CPEC.
 Separatists opposing CPEC through their violent actions against the
government bodies.
 Influx of terrorist from the Afghan border to create chaos in Baluchistan and
rest of the Pakistan.

Security Measures that can be taken in Baluchistan in respect of CPEC

It goes clear that the security measures in Baluchistan are inevitable to secure the
investment coming in the form of CPEC. The project is as vital as is the security of the
province. Amid efforts of external powers like India to sabotage CPEC, following security
measures can be taken:

 Military action against the foreign militants using the land of Baluchistan for
their activities against CPEC by damaging the peace in the province.

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  Dialogue with the separatists of Baluchistan should be started instead of
dealing them with the military actions. This will enable them to find a proper
vent for their grievances. Besides dialogue, they must be given proper chance
to surrender and must be rehabilitated later through mainstreaming.
 Strict diplomatic actions should be taken, against the countries interfering in
Baluchistan to hamper CPEC.
 There is need to make the Baluch people aware of their share in the CPEC along
with giving them that share.
 If provided education, given jobs and facilities to the coming generations;
Baluchistan’s security can be improved thus making CPEC successful.
Role of regional power to sabotage CPEC:

China Pakistan Economic Corridor CPEC has promised a number of economic geo strategic
and trade prospects for not only Pakistan and China but for the whole region but the
security threats posing to CPEC will not allow reaping the benefits it promise. The security
threats are not limited to the issues related to physical security of the man power and assets
but also include to pre-empting and foiling the hostile plans of sabotage and subversion by
terrorist and their foreign supporters.
CPEC is a multi-billion project aimed at regional connectivity, improving Pakistan’s economy
and turning Gwadar into a trade hub of this region. Various countries have shown interests
in becoming part of CPEC and reaping its benefits. However, the mega project faces huge
strategic and security challenges. The changing dynamic of South Asia is particularly
concerning for the security of CPEC. The region is witnessing the rise of Islamic State in
Afghanistan, Baloch insurgency in Balochistan and India’s hostility towards Pakistan in
general and CPEC in particular. For a past couple of years, these threats have begun to
materialize, in 2018 a suicide attack in Mastung killed 149 people. The responsibility of the
attack was claimed by Islamic State. While this year Baloch insurgents stormed PC hotel in
Gwadar , resulting in the death of five people. These events indicate the need for swift
action and planning on part of both China and Pakistan.
The CPEC is a bilateral economic project, which is not against any country”, he further
clarified. The foreign spokesman was commenting on a report published in a leading US
newspaper alleging that the CPEC was not about economy and trade but had military
dimensions as well. No doubt, there are strong military ties between China and Pakistan.
The CPEC, however, has nothing to do with these ties. Both ‘all-weather’ friends have been
enjoying close diplomatic, strategic and military relations for decades, independent of, and
prior to, the CPEC project. China and Pakistan, being two sovereign states, have the right to
foster strong economic and military relations in accordance with their national interests.
Therefore, any regional or global power is by no means justified in unnecessarily objecting
to this bilateral relationship.
As a matter of fact,there has been a systematic and persistent propaganda campaign against
the CPEC since this project was formally announced in April 2015. Ever since, this mega
project has also been the subject of numerous conspiracies and controversies, both
domestically and internationally. In order to dispel similar domestic controversies, Pakistan
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had to conceive and announced the idea of the “Western Route” of the CPEC in addition to
some Special Economic Zones (SEZs) along the CPEC route in different provinces in the
country. Noticeably, a section of national media, and various so-called nationalist political
parties and pressure groups have also been the ardent critic of this mega economic project.
Terrorism has been a major tool to sabotage the ‘game changing’ CPEC project. We have
observed a significant surge in the terror attacks across the country following the formal
launch of this project. The province of Balochistan, which occupies a pivotal position in the
entire CPEC project owing to deep-sea Gwadar Port, instantly became the hotbed of
terrorism, militancy and insurgency. This troubled province has experienced most of the
worst terror attacks in Pakistan during the last couple of years. According to official
statistics, there have been some 1860 terrorist incidents in Balochistan during the last 7
years, leaving more than 2300 people dead and many more injured. In this respect, Quetta,
Mastung, Awaran, Khuzdar and Dera Bugti were the worst affected districts in the province.
Gilgit-Baltistan, which hosts another important segment of the CPEC route, has also been
under attacks by the terrorists. This region experienced the unfortunate 2013 Nanga Parbat
massacre where 10 foreign tourists were shot dead. A large number of schools have also
been torched by miscreants in this region. Many Chinese nationals, engineers and workers,
who were working to complete various CPEC projects in Pakistan, have also been attacked
and killed. The recent terror attack on Chinese Consulate in Karachi is also being viewed as a
conspiracy to sabotage CPEC.
The United States and India, the two strategic allies in the post-9/11 era, are particularly
known for their strong opposition to the CPEC as well as an anti-CPEC hostile propaganda.
Both countries have lunched a proactive diplomatic and media campaign against the CPEC
for the last few years. We have noticed Indian PM Modi’s persistent anxiety over the CPEC
project. He has openly hinted at supporting the separatist elements in Balochistan and
Gilgit-Baltistan. In May 2015, he readily visited China to persuade the Chinese government
to abandon this project by maintain that the CPEC route was passing through the disputed
territory of Gilgit-Baltistan. During the G-20 summit at Hangzhou in China in September
2016, PM Modi had expressed India’s concerns over the CPEC in his bilateral meeting with
Chinese President, holding that the two countries needed to be “sensitive” to each other’s
strategic interests. In October 2017, the Trump administration told the Senate Armed
Services Committee that CPEC was passing through a disputed territory. Similarly, a senior
Trump administration official has recently also remarked that the Belt and Road Initiative
(BRI) “is a made in China, made for China” initiative.

Substantially shifting the focus of US foreign policy from the Middle East to the East Asia,
the Obama administration ambitiously launched its ‘pivot to Asia’ regional strategy in 2012.
Under this US foreign policy initiative, the US will endeavour to increasingly relocate its
extensive military and economic resources in the Asia Pacific region, realising the utmost
economic, political and military significance of this region in the twenty-first century. This US
regional strategy includes actions like engaging with regional multilateral organisations,
strengthening bilateral security alliances, forging an active broad-based military presence,

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deepening relationship with emerging powers, expanding trade and investment, and
advancing democracy and human rights in the region.

There is a general perception that the US pivot to Asia strategy is nothing but another
important tool of its so-called China containment policy in this region. It only aims at
minimising or undermining the rising economic and political influence of China in the world.
At present, the US economy is in trouble on account of the current global financial crisis and
a number of domestic economic constraints. The long-term viability of the US economic
model is also being questioned. Therefore, the US is wary of the rapidly growing Chinese
economy, which already has become world’s largest economy in terms of Purchasing Power
Parity (PPP). China has also become the global hub for manufacturing, and the largest
manufacturing economy as well as the largest export of goods in the world.

Substantially shifting the focus of US foreign policy from the Middle East to the East Asia,
the Obama administration ambitiously launched its ‘pivot to Asia’ regional strategy in 2012.
Under this US foreign policy initiative, the US will endeavour to increasingly relocate its
extensive military and economic resources in the Asia Pacific region, realising the utmost
economic, political and military significance of this region in the twenty-first century. This US
regional strategy includes actions like engaging with regional multilateral organisations,
strengthening bilateral security alliances, forging an active broad-based military presence,
deepening relationship with emerging powers, expanding trade and investment, and
advancing democracy and human rights in the region.

There is a general perception that the US pivot to Asia strategy is nothing but another
important tool of its so-called China containment policy in this region. It only aims at
minimising or undermining the rising economic and political influence of China in the world.
At present, the US economy is in trouble on account of the current global financial crisis and
a number of domestic economic constraints. The long-term viability of the US economic
model is also being questioned. Therefore, the US is wary of the rapidly growing Chinese
economy, which already has become world’s largest economy in terms of Purchasing Power
Parity (PPP). China has also become the global hub for manufacturing, and the largest
manufacturing economy as well as the largest export of goods in the world.

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New security plan to cover ‘all Chinese workers’

CPEC: unprecedented boost to Pakistan’s economy

China-Pakistan Economic Corridor (CPEC), massive bilateral project to improve
infrastructure within Pakistan for better trade with China and to further integrate the
countries of the region. The project was launched on April 20, 2015 when Chinese President
Xi Jinping and the then Pakistani Prime Minister Nawaz Sharif signed 51 agreements and
Memorandums of Understanding valued at $46 billion. The goal of CPEC is both to
transform Pakistan’s economy—by modernizing its road, rail, air, and energy transportation
systems—and to connect the deep-sea Pakistani ports of Gwadar and Karachi to China’s
Xinjiang province and beyond by overland routes. This would reduce the time and cost of
transporting goods and energy such as natural gas to China by circumventing the Straits of
Malacca and the South China Sea. CPEC is part of the larger Belt and Road Initiative—to
improve connectivity, trade, communication, and cooperation between the countries of
Eurasia—announced by China in 2013.

Work is in full bloom on the CPEC and some projects are already complete while others are
near completion. The pace and progress on these projects is satisfactory and work is
continuing in a steady manner. It will effectively promote economic and social development
of Pakistan as well as other countries in the region.

If we talk about CPEC Social Sector Development Projects we will find its positive impact in a
number of areas running under the umbrella of CPEC. Under CPEC, effort will be made to
promote people-to-people contact, media and cultural exchanges (including movies, drama,
theatre etc). Both sides have resolved to promote Chinese and Pakistani culture and
heritage for of long-term partnership.

The second major social sector development project is transfer of knowledge in different
sectors. Under this initiative, experts from both sides will exchange expertise in industrial,
rural and urban development, job creation & SMEs, water resources management and
treatment as well as agriculture uplift.

Planning Commission of Pakistan is expecting 27 SEZs to be set up across country under

CPEC by introducing Gwadar SEZ as first model based on area of 3000 acres on special
discretion of China. The corridor will bring rapid industrialization and new techniques and
technology as well as greater investment to Pakistan.

The industrial and technological revolution would create several opportunities in the
country and to introduce and equip the youth with new techniques’ advancements in these
sectors, enabling them to grab these opportunities. These changes will bring both social and
economic advantages in Pakistan. One of the major social impacts of China-Pakistan
Economic Corridor (CPEC)is flourishing of tourism industry. Tourism within the country is

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expected to boom in the years ahead making it a very attractive hub for investment in the
tourism and hotel business.

The Azad Jammu and Kashmir (AJK) government plans to build a tourism corridor in the
valley to facilitate travelers coming to visit scenic spots. Around 190km long tourism
corridor will be constructed in the State. The estimated cost of this infrastructure project is
around Rs.22 billion and the AJK government is also taking concrete steps to upgrade the
existing infrastructure in the territory, under CPEC, which will also boost tourism in the
region. Similarly, the region of Gilgit- Baltistan (GB) is considered paradise due to its sky-
kissing mountains, lakes, valleys and lush green surroundings. With CPEC realization,
number of visitors from across the world to Pakistan will enhance thus helping our tourism
sector and generating revenue.

CPEC will also contribute to improving standard of living. As a result of increase in trade
tourism and investment, Pakistan’s economy gets a boost and the government is now
spending more on public employment opportunities. People’s income and standard of living
are likely to increase.

Over the years, Pakistan is hospitable nation and its culture is convivial to accommodate
other cultures. The inflow of Chinese people can create harmony among cultures. With
completion of CPEC, Pakistan will avail itself of great opportunities from Chinese experts in
various sectors like education, health and energy. The CPEC would also do the groundwork
for further association among institutions of higher education and enable intellectual
exchange between the two people.

CPEC will also help reduce travel cost and travel distance that cause decrease in illegal trade.
Pakistan is today facing the menace of terrorism and militancy and CPEC will help the
government to counter it. Prosperity and development discourage forces of obscurity and
extremism. Another fruit of CPEC is that it will help in gaining internal stability because it will
provide maximum opportunity to all provinces to get benefits. Gem and jewellery sector of
Pakistan will also get a boost because of the CPEC as Peshawar is hub and the only direct
market for all gems and precious stones found both in Pakistan and Afghanistan. Also China
is the biggest exporter of both gems and jewellery so CPEC will help us to improve our
imports and exports in gems sector and make new innovations and introduce new
techniques by sharing with China.

Pakistan has a huge endowment of mineral deposits including precious metals, dimension
stones, industrial mineral.

Each area of Pakistan is blessed with natural resources. However, there is huge gap between
the potential and actual production.

In short China-Pakistan Economic Corridor is a win-win strategy. The investment and

construction of energy and infrastructure projects under CPEC will contribute to Pakistan
and China in social, economic, cultural, mineral resources and others.

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How CPEC Phase-II Will Galvanize Industrialization And Unemployment In Pakistan?
China Pakistan Economic Corridor – A brief overview 
1. The China-Pakistan Economic Corridor (CPEC) is perceived as a game-changer for the
South-Asian region and beyond.
2. China Pakistan Economic Corridor (CPEC), a flagship project of the Belt and Road
Initiative (BRI) launched by Chinese President Xi Jinping in his visit to Pakistan in
2015. In beginning, it was a $46 billion project.
3. CPEC is a great opportunity for Pakistan. CPEC connects us to China which is one of
the biggest markets in the world.
4. CPEC includes the various projects of energy, infrastructure, connectivity, as well as
social sector development.
5. The projects – including roads and railways from Gwadar in Pakistan to Xinjiang in
China – will cut short Beijing’s trade routes with the world through sea
approximately by 12,000 miles. The corridor will shorten oil, gas, and other trade
routes by thousands of kilometers by cutting overland from western China rather
than going around South and Southeast Asia by ship.
6. It is building strong roots to take economic growth to next level not only within
Pakistan but across the region.
7. As of now the estimated investment size of CPEC has reached beyond $60 billion.

Different Phases of CPEC 

1. The CPEC projects in Pakistan are divided into three phases.
2. Pakistan has already set up projects like power production plants under phase-I by
2020.
3. The country aspires to develop medium-term projects under phase-II by 2025 and
long-term projects under Phase-III by 2030.

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CPEC Phase-II

CPEC has now entered into its second phase. The key goals of the second phase of CPEC are
industrialization, agriculture, science, improving the livelihood of people, and technology
transfer to Pakistan.

By 2025, the CPEC aims for: industrial system approximately complete, major economic
functions brought into play, the people’s livelihood along the CPEC significantly improved,
more-balanced regional economic development. In short, the second phase calls for all the
goals of Vision 2025 achieved.

CPEC Phase-II and galvanized industrialization in Pakistan

1. CPEC is a multi-layered project. Under CPEC’s second phase, the industrial base of
the country would be expanded which would help in increasing the country’s
exports.
2. As far as industrial development is concerned, productivity would be increased and
exports would see a big jump with a reduction in imports under CPECs second phase.
3. Phase-II would redress the issue of the trade imbalance between Pakistan and China.
4. As per a recent statement by Chief of Army Staff General Qamar Bajwa Chinese
companies were showing keen interest to invest in all three Special Economic Zones
(SEZs). He said that the process for relocation of the Chinese industry in Pakistan was
in progress.
5. Investment in the agriculture sector of both countries by establishing special
economic zones will boost cooperation in the Chinese and Pakistani agriculture
sectors.
6. Mango is Pakistan’s leading export and it is expected that the exported product will
be sold in supermarkets across China.
7. Joint venture in agriculture is the first step to reduce the price which can be achieved
through the introduction of technology and working with farmers and exporters to
set a reasonable price for imported fruits and vegetables.
8. Many products can be transported by road to China through the establishment of a
cold chain system that’s an initiative of CPEC. Up till now, the short shelf-life
products, like mango fisheries and other agricultural products, were exported by air
with increased prices. They would now be transported at a reasonable cost.
9. Pakistan produces a huge amount of cotton which can be exported to China as
Beijing has a vast number of textile industries. Balochistan is the only province
producing Onyx in the world and the Chinese have a specific inclination towards the
stone.
10. The gem was another area where Chinese joint ventures could help building
Pakistani industries especially exports of gold and copper to China. Pakistan has
abundant gems in northern areas but it lacks advanced technology to polish gems.
However, the Chinese could help the country to make beautiful jewelry products.
11. Moreover, Pakistan would be able to exchange skilled labor with China and other
countries of the region once the connectivity rail, road projects are completed.
12. Operations of the China-Pakistan Free Trade Agreement would decrease prices as
import duty would not apply to products.

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 13. The industrialization that is the main pillar of the second phase will provide required
sources of economic growth and help generate employment.
14. Furthermore, In Pakistan, cottage or household industries hold an important position
in the rural set-up. Most villages are self-sufficient in the basic necessities of life.
They have their own carpenters, cobblers, potters, craftsmen, and cotton weavers.
Many families depend on cottage industries for income. There is a great demand for
hand-woven [carpet]s, embroidered work, brassware, rugs, and traditional bangles.
These are also considered important export items and are in good demand in
international markets. CPEC upon completion would give away to further the market
outreach for cottage industry.
15. CPEC’s Special Economic Zones (SEZs) will play a pivotal role. SEZs would provide
basic infrastructure and impetus for industrialization. A special economic zone is an
area in which the business and trade laws are different from the rest of the country.
These zones are located within a country’s national borders, and their aims include
increased trade balance, employment, increased investment, job creation, and
effective administration.

Prime Minister of Pakistan Imran Khan has rightly pointed out in one of his speeches that
KPK was underdeveloped and it had to look towards Karachi and the Middle East for jobs
due to lack of opportunities but RSEZ is bringing a lot of industrialization in the province
which will solve the issues.

How exactly CPEC Phase-II would reduce unemployment in Pakistan

Employment is considered the main factor for the trickle-down of economic benefit.
Therefore, the success or failure of industrialization will determine the fate and perceived
benefits of CPEC.

1. Pakistani officials anticipated that CPEC will enable the environment to create 2.3
million jobs between 2015 and 2030 and add 2-2.5% points to the country’s annual
economic (GDP) growth.
2. Connectivity with CARs would help Pakistan to access fuel rich regions of the world
that is likely to reduce the fuel crises alongside reducing the cost of fossil fuels in
Pakistan.
3. China-Pakistan Economic Corridor (CPEC) is a strategic economic project aiming at
increasing regional connectivity for the economic development of Pakistan and
China.
4. As many as 700,000 new job opportunities for local people are estimated to be
created by 2030 under the China Pakistan Economic Corridor (CPEC), according to
the report of The Express Tribune.
5. CPEC is not only expected to be beneficial for Pakistan and China but is also expected
to have positive spillover effects to other neighboring countries by enhancing the
geographical connectivity of Pakistan with landlocked Central Asian states.
6. Investment in infrastructure undeniably increases and creates jobs in the service
sector.

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 7. About nine projects under CPEC have already been completed, producing 5,320MW
electricity with an investment of $7.9 billion. The energy-generating projects have
provided jobs to 5,000 Pakistani citizens according to a report by Business Standard.
8. CPEC Authority Chairman uttered that eight more energy projects are being
constructed to generate 4,470MW electricity with an investment of another $9.55
billion and would provide employment to over 15,000 Pakistanis.
9. As the main focus of the CPEC phase two is socio-economic development, trade
promotion, employment, and economic growth, so, the cause can only be fully
served through special economic zones (SEZs).
10. RSEZ in KPK is top precedence and is a flagship project of Khyber-Pakhtunkhwa
Economic Zones Development & Management Company (KPEZDMC) which will
implement it with the collaboration of the China Road and Bridge Corporation
(CRBC). The zone is spread over almost 1,000 acres and located near M-1 Nowshera.
It will have international standards infrastructure and will be developed in three
phases with almost $128 million.
11. RSEZ will transform the transportation services of the province along with business
and trade.  After the start of its operations, it will become a hub of economic activity
for the province. According to stats shared on the eve of its groundbreaking
ceremony, RSEZ will produce 200,000 jobs in engineering industries and food
processing along with boosting business activities in the province.
12. It will also provide multiple benefits to Pakistan like an increase in people-to-people
contact and foreign direct investment in the coming years. The special economic
zone is likely to attract foreign investors which will increase economic activities in
Pakistan and this will spread its soft image to the world.
13. Chinese companies shared advanced techniques and successful experience to  help
Pakistan modernise its human resources. They also sponsored thousands of Pakistani
students to study in China and sent hundreds of Pakistani engineers and
professionals to China for training on scholarships.

Conclusion

Conclusively, CPEC Phase-II will not only galvanize the industrialization in Pakistan by its
multi-layered projects concerning improved business and connectivity but it is likely to
increase the employment opportunities for the people in various sectors of the economy.

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