A decade of the China-Pakistan Economic Corridor (CPEC) is being celebrated in Islamabad and Beijing, marking China’s significant role as the largest investor, trading partner, and source of grants and loans for Pakistan. Over the past ten years, Pakistan has received $25.4 billion in direct Chinese investment, primarily in transportation, energy, and infrastructure projects as part of the Belt and Road Initiative. In addition, China provided a substantial CN¥30 billion loan and currency swap arrangement to support Pakistan’s economy, alleviate debt repayment pressure, and reduce dependence on the US dollar for trade.
The delegation led by Chinese Vice Prime Minister He Lifeng visited Pakistan to attend the 10th anniversary celebrations of the China-Pakistan Economic Corridor (CPEC). He Lifeng, who is a Member of the Politburo of the Central Committee of the Communist Party, has been a crucial figure in China’s international economic relations and the implementation of the Belt and Road Initiative, with CPEC being a flagship project.
The CPEC has been transformative for the bilateral relationship, fostering economic, commercial, and investment ties between the two countries. Its successful completion of the first phase and ongoing progress in the second phase solidify its position as a significant component of China’s ambitious Belt and Road Initiative.
One of the notable achievements of CPEC is the creation of approximately 200,000 direct jobs, including opportunities for local engineers. The project also seeks to modernize Pakistan’s railway system through the Main Line-1 (ML-1) project, which will upgrade 1,733 kilometres of track from Peshawar to Karachi.
Beyond economic benefits, CPEC has enhanced people-to-people connectivity, with thousands of Pakistani students studying in China before the Covid-19 pandemic. These students serve as goodwill ambassadors and gain valuable insights into Chinese culture and business practices.
As the milestone is celebrated, both Pakistan and China should reflect on the accomplishments thus far and plan for greater economic connectivity. Pakistan needs to revise its industrial and agricultural policies to attract more Chinese investment and technology. This is crucial to increasing productivity, bridging the trade gap, and overcoming the balance-of-payments crisis. Efforts to complete special economic zones quickly would encourage Chinese companies to relocate their manufacturing facilities to Pakistan for export purposes.
Furthermore, Pakistan should leverage Chinese experience and technology to boost agricultural output, reduce rural poverty, and generate exportable surplus. Additionally, efforts should be made to link Afghanistan, Central Asian states, and possibly India and other South Asian economies to fully exploit CPEC’s potential as a trade route.
While celebrating the achievements of the past ten years, it is essential for Pakistani authorities and stakeholders to learn from their mistakes and improve the efficacy of CPEC. Many gaps still remain, and the second decade of CPEC must prove even more fruitful for Pakistan’s economic development and progress. By seizing this opportunity, Pakistan can pave the way for a stronger and more prosperous future with its Chinese partners.