CHINA-PAKISTAN ECONOMIC CORRIDOR | A Harbinger of Prosperity for Pakistan


The China-Pakistan Economic Corridor is the most important mega project in Pakistan after the Indus Water Works initiated in the 1960s. There is no doubt that the Corridor will be hugely beneficial for the people of Pakistan as well as China. The $46 billion worth of investment that China has already committed for the China-Pakistan Economic Corridor (CPEC) is likely to pull Pakistan out of its depressed trough in a matter of a decade or so. As soon as the Corridor becomes operational, it will give Chinese products a more competitive edge in export markets. Pakistanis are also hoping that the corridor would serve as a trade-multiplier with China.

As part of its long-term strategy, China has carved out three corridor passages to overcome any security threat that it may face in the South China Sea.

The First Passage

It is called the southern corridor and it begins from Guangzhou — China’s third largest city — and runs towards western parts of China and connects Kashgar with Pakistan at Khunjerab, the point wherefrom China intends to link to Gwadar Port in the Arabian Sea. It is the shortest and the most suitable option for China.

The Second Passage

It is the Central Corridor that begins from Shanghai and links China with Tashkent (Uzbekistan), Tehran (Iran) and onwards to Iran’s Bandar Imam Khomeini Port on the Persian Gulf. One of its branches opens into Europe. This is the longest route but could be a viable option, if Pakistan fails to deliver on the timelines of accomplishing its road network.

The Third Passage

It is the Northern Corridor that opens from Beijing, passes through Russia, and links with Europe. After long deliberations and contemplations and almost a decade-long planning, China solemnly launched the idea of Silk Road Economic Belt, popularly known as the “One Road, One Belt” initiative in October 2013.

In the backdrop of this dynamic geopolitical horizon, China and Pakistan signed a Memorandum of Understanding (MoU) on China-Pakistan Economic Corridor on July 5, 2013. The dream of CPEC will come true expectedly by 2030 and it would bring about unified links to President Xi Jinping’s “One Belt, One Road” and 21st Century Maritime Silk Route projects. After hectic consultations with the Chinese authorities, Pakistan has planned to build three routes — Central, Western and Eastern — of CPEC. However, the Eastern Route has been picked up for development in the first phase.

China actually opted for the Eastern Route for security purposes because the western corridor is riskier than the eastern and does also have many jeopardizing factors. However, many analysts believe that development of the Western route would help neutralize security threats. The eastern alignment of the CPEC will pass through Thakot, Mansehra, Islamabad, Lahore and Multan. From Multan, the route will be linked to Hyderabad through Rohri and Dadu. The Hyderabad-Karachi portion will be linked through M-9. Karachi will then be linked to Gwadar through N-10 East Bay Express Way along the coastal line.

The work on central alignment will be completed later whereas construction on some parts of Gwadar-Dera Ismail Khan via Quetta route — western alignment — has already begun.

At present, rumours are aplenty that some parts of the country will receive nothing from this gigantic project. Some of them may be true for the time being but in the long run, almost all major cities will be connected to the Corridor.

The construction of China-Pakistan Economic Corridor (CPEC) will enable China to address its strategic issues and activities. It will lead to rising economic growth and make it a source of sustainable development. CPEC-related activities involve work worth nearly $50 billion for which the Chinese will provide a mix of commercial loans to develop Gwadar Port, finance energy projects, build infrastructure and establish industrial parks.

In case, for any reason, Pakistan remains unable to complete its part of the work in the stipulated time, the Chinese will still have the option to opt for other routes by cutting the country out from its long-term strategic planning.

Benefits Both Sides Can Reap

As mentioned earlier, China–Pakistan Economic Corridor is a mega project that involves the construction of highways, railways and pipelines for the transportation of oil and gas, and to carry out other commercial activities. This project, for sure, is strategically very important and beneficial for both the countries. It will not only boost the economies of both the countries but will also make Gwadar Port an axis around which Pakistan’s economy and prosperity will revolve. It would provide China with opportunities to link with the Middle East and Africa, where China is making huge investments. It is pertinent to mention here that the Gulf region produces nearly 40% of the world’s oil and it is transported to other parts of the world through the Persian Gulf. China also wants to be the part of this trade by using Gwadar Port. In addition to this, having a presence at Gwadar will help China in keeping an eye on Indian and American activities in the Indian Ocean. Thus, Gwadar will become an economic hub for Pakistan and will also be crucial for China.

For Pakistan, the CPEC would be another factor that will fortify and deepen its vitally important relationship with China in the 21st century; a relationship that is described — somewhat redundantly — as the cornerstone of Pakistan’s foreign policy.

The CPEC will have a beneficial spillover effect also for the neighbouring countries in both the economic and political realms. It is expected to stimulate greater economic activity and exchanges between Pakistan and Afghanistan that would help bring stability to the war-torn Afghanistan. Historically troubled Pak-Afghan relationship may also see a new, fresh beginning. Further afield, it could attract the landlocked states of Central Asia to route some of their overseas trade through Pakistan.

China spends millions of dollars in form of freight costs on importing oil from the Middle East that accounts for almost 80% of its total oil needs. By routing these shipments from Gwadar, China will be cutting down its costs — expectedly one-third of the current levels. This is going to be a revolutionary project for both China and Pakistan and a precursor of bright and refulgent future of the region.


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