Disclaimer: This dissertation has been written by a student and is not an example of our professional work, which you can see examples of here.

Any opinions, findings, conclusions, or recommendations expressed in this dissertation are those of the authors and do not necessarily reflect the views of UKDiss.com.

CPEC Initiative: The Development of Pakistan Challenges, Opportunities, and the Way Forward

Info: 8334 words (33 pages) Dissertation
Published: 10th Dec 2019

Reference this

Tagged: EconomicsInternational Relations

CPEC Initiative: The development of Pakistan Challenges, Opportunities, and the Way Forward


China and Pakistan have agreed to build the One-Belt-One-Road project, better known as the China-Pakistan economic corridor, which should create peace and prosperity in South Asia with a $46 billion investment in energy and infrastructure development in Pakistan is considered a game changer for Pakistan’s economy. As a flagship project of China’s One Belt One Road initiative, this corridor will incorporate 2,000-kilometer transport link between Kashgar in northwest China and Gwadar’s Pakistani port in the Arabian Sea, near the Iranian border, roads, railways and oil pipelines. The Pakistani government has many internal and external problems for the implementation of this multi-dollar project. However, this is a project that changes the game that will change the fate of Pakistan and will help Pakistan modernize. This will improve the economy and trade, improve regional communication, overcome energy crises, develop infrastructure, and establish contacts between people in both countries. This study helps analyze the problems and benefits for Pakistan associated with the implementation of China-Pakistani economic corridor.

Keywords: CPEC, Pakistan, China, India, South Asia, OBOR, corridor, Gwadar, Chabahar, Balochistan, Indian Ocean, regional security, economic integration, energy needs, terrorism, internal stability, connectivity.


The 21st century has seen the creation of a regional and global strategic environment all over the world. This strategic environment promotes geo-economic and geostrategic communication between countries. Important parameters of this association are both state interests and national security. States have defined their interests and reformed their policies, realizing that they cannot defend their interests with their own capabilities. High-level negotiations and diplomatic consultations are the hallmarks of growing co-operation between multi-faceted fields, such as industrial companies, infrastructure and development developers, defense, trade and the associated area of the economy (Noor, Shah et al. 2008). China was considered a sleeping giant in the previous decades. But now China playing a central role not only in the Asian region but throughout the world. Being the largest country in the world in terms of population and rapidly becoming economically as big as it is demographically, it ultimately succumbed to the delights of multilateral diplomacy, which it had been known to ignore during the earlier decades. Another reason for changes in Chinese foreign strategy is economic, driven by growing energy needs (Belokrenitsky 2007). The Chinese President Hu Jintao, who took office in 2003, explained the country’s “good neighborliness policy” as part of a new peaceful development strategy that aims to promote China as a relationship of interdependence rather than competitive with the neighbor’s countries and the world. With this strategy, China has transformed its neighbors into the new regional trade hub. Regional communication is one of the most important aspects of Pakistan’s foreign policy. Pakistan is also trying to develop good relations with neighboring countries. Conserving decent and good relations with China is an integral part of Pakistan’s foreign policy goals, China is a strategic partner of Pakistan; to help Pakistan maintain a balance of power in the region. Pak-China relations have kept growing and intensified since 1951 when they began their friendship.China has always been a key component of Pakistan’s foreign policy so that in 1970 Pakistan played a key role in arranging Nixon’s visit to Beijing. With China’s support, Pakistan has gained great importance not only in the region but throughout the world. In recent years, China and Pakistan have made a concerted effort to revive the historic Silk Road, which is one of the oldest commercial routes in the world and to provide a commercial route from Kashgar (China) to Gwadar (Pakistan). Plan of the China-Pakistan economic corridor will help Pakistan become one of the most strategically important countries in the region. China will also be given the opportunity to build a naval base in Gwadar, which will increase China’s influence in the region and will counteract the influence of the United States in the Asia-Pacific region. The CBS News quotes some Western diplomats on the partnership between Pakistan and China. According to them, increasing China’s economic commitment to Pakistan must be considered in the context of “Beijing’s efforts to counteract efforts to deepen partnerships across the Asia Pacific region of the United States.” (Iqbal 2015).


The Concept of One Belt and One Road

The concept of “One Belt One Road” is of strategic international importance. The One Belt One Road initiative covers countries and regions with a total population of 4.4 billion people and a total economic volume of 21 trillion dollars, 63% and 29% respectively of the total in the world (Liping 2015).According to the Corridor’s assessment, this plan provides for the establishment of bases for regional cooperation, improvement of economic growth, commercial diversification, and investment in transport, extraction and energy and the creation of political flexibility. It is a vision with changing world implications, a development plan that closely links most of Asia, Europe, Africa, Oceania and the Middle East through a patchwork of diplomacy, new infrastructure, and free trade zones (Catanza, Qi et al. 2015).The “One belt one Road” project consists of three routes, the southern, central and northern routes. The southern corridor begins from Guangzhou, which is China’s third largest city in south-central China. This route moves to the west of China and connects Kashgar with Pakistan at Kunjarab, where China wants to connect with Gwadar port in the Arabian Sea. This is the shortest and cheapest option for China (Rana and Mufti 2015). The second Chinese option is the Central Corridor, which begins from Shanghai and connects the country with Tashkent, Tehran and onwards with Iran’s Bandar Imam Khomeini in the Persian Gulf. One of its branches goes to Europe. This is the longest route, but this could be an option if Pakistan fails to meet the deadlines for completing its road network to become the beneficiary of the new Silk Road Economic Belt. The third Chinese option is the northern corridor, which begins from Beijing, crosses Russia and connects it with European cities (Abid and Ashfaq 2015).

Source: China Daily, June 28th, 2014.

China Pakistan Economic Corridor

Recognizing that regional integration is an inevitable measure to meet the needs of a globally globalized world, the notion of “Silk Road” has been reformulated and reformulated by China in 2013 on the initiative of “one road, one belt”, i.e., Economic belt along the silk road and the Maritime Silk Road. (Mahar 2015). Pakistan is an important partner for China since it connects China with Central Asia, the South Asia region and the Middle East, and its main deep-sea port Gwadar offers direct access to the Indian Ocean and beyond. Both countries are working to improve their coordination and strategic communication to protect common interests. The China-Pakistan Economic Corridor (CPEC) is a new model of cooperation between Pakistan and China, which will serve in the context of complex and changing regional and international situations. Over the years, China and Pakistan have developed strong commercial and trade links and bilateral cooperation. China has gradually become Pakistan’s major trading partner for exports and imports. Bilateral trade and trade relations between the two countries were established in January 1963 when both signed the first long-term bilateral trade agreement. (Abid and Ashfaq 2015). Both countries signed the Free Trade Agreement (FTA) on 24 November 2006 and implemented since 1 July 2007. Subsequently, both signed the FTA on trade in services on 21 February 2009 that became active from October 10 that year. The CPEC is a megaproject that will build political and economic goals through trade and development and will strengthen economic and trade cooperation between the two countries. This corridor will also be helpful to create regional stability in South Asia. After completing the corridor, it will work as the main route for trade between China, Africa, and the Middle East. It is expected that this corridor will help reduce the length of 12,000 kilometers, which now has to supply oil supplies to the Middle East for delivery to Chinese ports.

Historical perspective

The vision of the economic path between China and Pakistan stretches as far back to Musharraf’s times. This idea, expressed for many years, gained traction in May 2013 when Chinese Premier Li Keqiang pointed out that the CPEC was built during his visit to Pakistan. At that time, he signed the landmark CPEC agreement. In the same year, Pakistani Prime Minister Nawaz Sharif visited Beijing and signed eight agreements for an estimated US$ 18 billion that included building around 200 kilometers tunnels for the CPEC. Pakistani President Mamnoon Hussain visited China in February 2014 to discuss the corridor’s plans. In the same year, Pakistani Prime Minister Nawaz Sharif visited China again and signed 19 agreements with China. At that time, banks and Chinese companies pledged over more than US$ 45.6 billion for energy and infrastructure projects along the corridor. The agreements have shown a deeper strategic relationship between the two countries. China’s President Xi Jinping visited Pakistan in April 2015. This was the second visit of the Chinese leader to Pakistan in the 21st century after Hu Jintao visited Pakistan in 2006. Xi was to Pakistan in 2014 during his trip in the south from Asia to the Maldives, Sri Lanka, and India. This was postponed due to political disorder in Pakistan. During his visit, a total of 51 agreements between China and Pakistan were signed for US$ 46 billion which also included the development of China Pakistan Economic Corridor. The US$ 46 billion investment that China intends to commit to Pakistan under the CPEC is impressive. This amount exceeds all the direct foreign investment received from Pakistan in recent years, and significantly more than all the aid Pakistan received from the United States since 9/11. (Abid and Ashfaq 2015).


The CPEC, whose construction period covers the period from 2014 to 2030, has integrated ties with China with one belt, one road and the expansion of China’s 21st Century Silk Road. The implementation of projects within the CPEC has been divided into three phases. Short-term projects are expected to be ready by 2017; in the medium term by 2025 and the long-term period by 2030 (Jawad 2013). Total construction costs are estimated at $ 46 billion. It is a network of roads, railways, and pipelines for the transportation of oil and gas. The first phase includes the development at Gwadar port and the construction of an international airport. It will be completed in 2017. The Karakorum Highway connecting the two countries will also be expanded and the rail network between Peshawar in the north and Karachi in southern Pakistan will be improved. The two countries also have a plan for fiber optic communication links.

Gwadar port

Gwadar is actually the tail of a silk belt that connects Kashgar through various communication networks. Gwadar is at the center of the Pakistan economic corridor project because without fully functional Gwadar port, it would be difficult to see the corridor proposed as an energy corridor that serves as one of the main goals of building the CPEC. Located near the Hormuz Strait, which controls about one-third of world oil trade, Gwadar can play a key role in ensuring China’s energy security, as it provides a much shorter route than the current 12,900 km of the Persian Gulf. The narrow Persian of the Malacca Strait on the eastern coast of China (Chowdhury 2013). It was said that Gwadar would also place China and Pakistan in a strategic position along the Arabian Sea, compounding Indian problems associated with China’s participation in nearby ports such as Hambantota in Sri Lanka, Sittwe in Myanmar and Chittagong, Bangladesh (Abid and Ashfaq 2015). On the other hand, as India is also energy hungry, it hopes to develop the Iranian Chabahar port. In October 2014, India decided to develop the port of Chabahar, which, according to many, will open the way to Afghanistan, a landlocked country where India develops close ties in the area of security and interests economic (Abid and Ashfaq 2015). The port can act as a reliable outlet, as well as a storage and trans-shipment center for oil and gas suppliers in the Middle East and Central Asia through a clearly defined corridor that passing through Pakistan (Syed 2013). The operational control of the port will allow China to access the Indian Ocean, which is strategically important for China, as it expands its influence in the region. The Gwadar port will be connected to the western China Xinjiang province via railways and highways. China eastern seaboards are 3,500 km from Kashgar city, western China, and the distance between Kashgar and Gwadar port is only 1,500 km. (Abid and Ashfaq 2015).


Geography of China Pakistan Economic Corridor in Pakistan

This project will run through most of Gwadar Pakistan in Balochistan and end in Kashgar in western China, passing through parts of Punjab, Sindh, Balochistan, Khyber Pakhtunkhwa provinces and Gilgit-Baltistan in northern Pakistan to reach the Khunjrab Pass and beyond to China. After intensive consultation with the Chinese authorities, Pakistan prepared a plan for the construction of the three corridors; this is the eastern alignment, central alignment, and western alignment. The eastern alignment of the corridor originates from Gwadar, extending parallel to the coastal road from Makran east (Karachi) and then, crossing the inner part of Sind and southern, central and northern Punjab regions, reaches in Islamabad. From Islamabad, it extends to Haripur, Abbottabad and Mansehra districts of the relatively peaceful Hazara Division in KP; this part of the corridor and pass through the capital Muzaffarabad, of Azad Jammu and Kashmir, and to reach Khunjrab after passing through the Diamer and Gilgit areas. in northern Pakistan. The corridor also crosses the Pamir plateau and the Karakoram mountains. A link from Taxila through Peshawar and Torkhum will connect the alignment of Jalalabad’s eastern corridor to Afghanistan. Regional connectivity with India through the eastern alignment is designed to be provided through the Hyderabad-Mirpurkhas-Khokhrapar-Zero Point link and the Wagha border, Lahore, Lahore (Sial 2014).

Western alignment was the original agreement, which, according to the government, has been postponed until the alignment of the eastern corridor is completed. According to the western alignment plan, the economic corridor (highway and railway) starts from Gwadar and passes through some areas south and east of Balochistan (Khuzdar and Dera Bugti, respectively), and some districts in South Punjab to reach D.I. Khan KP. From D.I. Khan, it further extends to Islamabad and Abbottabad, and from there the path is the same as in the eastern alignment. Western alignment will have an additional regional relationship with Afghanistan through Chaman and will be linked to Iran via Quetta-Kho-e-Taftan (Abid and Ashfaq 2015).

Source: Planning Commission of Pakistan.

Work on central alignment will be completed later and construction in some parts of Gwadar-Dera Ismail Khan through the Quetta route. The argument that some areas of the country are being deprived of the corridor’s benefits could be fair in the short term but in the long term, all these cities will be connected to the corridor. All provincial capitals are included as knots, key milestones of the CPEC, on which they will be built. These nodes are in Peshawar, Islamabad, Lahore, Sukkar, Karachi, Gwadar and Quetta (Abid and Ashfaq 2015).

Challenges for Pakistan

Pakistan is facing a number of challenges in implementing the China and Pakistan Economic Corridor (CPEC) project. These problems can be defined both external and internal. The Vice Director General of Policy Research Office at the International Department of the Central Committee Communist Party of China, Dr. Luan Jianzhang believes that political disorder, security situation, and administrative issues are major challenges for completing the corridor. Corridor construction has been defined by many as a strategic point so that Pakistan has taken the economic pivot position for the whole region. This paradigm shift in these circumstances is of great concern to Pakistan’s enemies both inside and outside. India, Israel and the United States are unhappy. For India, the CPEC is a thorn in its paw. They have combined their ideas to develop new strategies that hinder the progress of the project. RAW opened a special office in Delhi and has been allotted $300 million to disrupt CPEC.It is already possible to notice a sharp increase in terrorist attacks in the three unstable regions and the activation of some NGOs and expert groups who are trying to express their fears and create a fear psychosis (Abid and Ashfaq 2015). In Pakistan, some political parties such as the ANP, Baloch nationalists, PkMAP have raised serious objections to the CPEC project. Even PTI and JUI (F) have shown a tendency to enter the anti-CPEC force van. Objections were raised, despite government assurances that this project would provide equal opportunities to all provinces (Abid and Ashfaq 2015).

There are numerous internal and external challenges for Pakistan over Pakistan China One Belt One Road Project. Here some very serious challenges have been described.

CPEC and Balochistan Factor

Belucistan is one of Pakistan’s most important areas; an amazing place for what officials expect to become one of the world’s most important commercial routes, linking the deepwater port of Gwadar to the city of Kashgar (Abid and Ashfaq 2015). This province has been persecuted for more than a decade by a bloody separatist insurrection. The Balochi rebels, who oppose Balochistan, in particular, the development of Gwadar, flew numerous pipelines and trains and have attacked Chinese engineers (Abid and Ashfaq 2015).They do not want Balochistan to develop as an economic and commercial center if it does not become independent. They fear that if Balochistan would develop and Gwadar’s harbor would become a prosperous harbor, then strangers would move. That could weigh the province’s demographic balance even further against the Balochs. (Dellios and Ferguson 2017). Ethno-sectarian is another important reason for the insurgency in Balochistan as if this was not enough to keep Balochistan’s tense, the dispute over the design of the China-Pakistan economic corridor (CPEC) has added more fuel to the blaze. After the history of previous megaprojects related to Balochistan, the CPEC risks becoming increasingly controversial (Abid and Ashfaq 2015). Muhammad Ali Talpur, in an article titled “They answered several questions,” wrote: “The economic corridor of China and Pakistan is a center of interest for China, Pakistan and, of course, the world because everyone perceives, on the basis of the benefits, the strategic and economic level and has them, no matter how important it may be to others, is extremely important to Baloch, whose lives will be destroyed in the name of development (Ahmad 2015).” Several separatist leaders in the Balochistan province are opposing the China-Pakistan (CPEC) economic corridor. In this regard, Brahamdagh Bugti, leader of the outlawed Baloch Republican Party (BRP), criticized the port projects of CPEC and Gwadar and launched a UN-sponsored United Nations referendum in Balochistan to determine its future. He argued that military equipment and funds received from Pakistan from the United States. And other western countries were also used against terrorists and extremist groups against the democratic and political struggle of the Baloch people (Abid and Ashfaq 2015). There were professional kidnappings and killings of Chinese workers in Balochistan. The Baloch separatists attacked the oil tankers who fed the Chinese company working on the production project. A special purpose is the port of Gwadar, located recently under the management of the Chinese state-owned company. The militants do not want this to develop (Dellios and Ferguson 2017).

Siddiq Baloch, the editor of the Balochistan Express daily, said the rebels want to frighten investors and developers working with the Pakistani government, such as the Chinese. He also said that there is an idea that, by doing this, they want to interrupt the functioning of the economy, stop the administration and challenge the administration in this area (Shoukat, Ahmad et al.). It’s time to cautiously solve the problems of Balochistan. For a project as big as the CPEC, which is potentially a turning point for the economy of all provinces, a nation cannot afford to fall into the trap of the spoilers (Abid and Ashfaq 2015).

CPEC and Khyber Pakhtunkhwa Factor

Some political parties in Khyber Pakhtunkhwa also oppose the economic corridor of China and Pakistan, which is a major problem for this multi-million project. The reason for this opposition is changing in the initial plan of this corridor by the federal government, which will divert economic benefits only from Punjab. Following the western route, the starting path will be followed by the construction of a road from Khunjerab to Gwadar via Mianwali, Dera Ismail Khan, Dera Gazi Khan, Khuzdar and Turbat (Shoukat, Ahmad et al.). However, China is more interested in working first on the Eastern route due to some security issues. This is, in fact, a long-term plan and will cover parts of the Sindh interior, as well as the southern, central, and northern regions of Punjab. Khyber Pakhtunkhwa political parties against the change of the original Gwadar-Kashgar route and demanded that the government refuse to change the project, warning that this measure will divide the country on this issue (Abid and Ashfaq 2015).

Parliamentary leader of Qaumi Waten Party Sikander Sherpao presented the resolution in the provincial assembly, which was supported by all parties. According to the resolution, any change in the initial project plan will be a net injustice for Khyber Pakhtunkhwa people who have already been affected by terrorism (Shoukat, Ahmad et al.).

They believe that starting path will connect the underdeveloped areas of Khyber Pakhtunkhwa and Fata with the Corridor and will lead to economic activity across the region, but with the new alignment, these areas would remain ignored (Shoukat, Ahmad et al.).

The lack of political harmony would be the main problem for the implementation of the China and Pakistan (CPEC) economic corridor project in Pakistan. Some sub-nationalist parties in all provinces have expressed profound reservations about the CPEC, claiming that changing routes from the federal government would only help the eastern provinces of Pakistan and deprive the western provinces. Since these allegations do not satisfy the facts on the ground, the governments of Pakistan and China have tried to allay the fears, by interacting with the political parties that are making the allegations (Javaid 2016). The 18th Amendment to the Constitution of Pakistan delegated many powers to provinces that strengthened the provinces but at times is detrimental to evolving consensus on vital national issues such as the CPEC. Both underdeveloped provinces of Balochistan and Khyber Pakhtunkhwa have expressed reservations about the proposed new corridor route, which could hinder the completion of the project. Moreover, the security situation in these provinces is another obstacle to the harmonious construction of the corridor. In addition, the volatile political system of Pakistan has the potential to delay the implementation of the CPEC (Abid and Ashfaq 2015).

If these annoying factors are not eliminated, it will continue to influence the project of Pakistan China economic corridor. It is necessary to achieve political harmony in all the provinces of Pakistan because it is now important when Pakistan joins the race for economic development and regional connectivity.

Security concerns

Security issues have been the most important and critical challenge for the CPEC, and both Pakistan and China have been trying to satisfy them. An arc of militancy stretches from Xinjiang  to Gwadar consisting of groups such as the East Turkestan Islamic Movement (ETIM), Tehreek-e-Taliban Pakistan (TTP), Lashkar-e-Jhangvi (LeJ), Daesh (ISIS), Balochistan Liberation Army (BLA) , The Balochistan Liberation Front (BLF) and the wings of some political parties fighting. Most of these groups cannot have enmity with China itself but are eager to attack China’s interests, such as the CPEC, as a means of fighting the Pakistani state (Javaid 2016).

Gwadar is the tail of a silk belt that will be connected to Kashgar through various communication networks. The security of the entire corridor and Gwadar is a real concern for China. After the military operation in various parts of Pakistan, terrorist infrastructure still exists inside and outside the borders, which will continue to pose a threat (Rizvi 2015).

Supporting the American CIA, Israeli “Mossad” and RAW Indian has continuously been assisting the militant and Sub-Nationalists groups in all provinces to engage in subversive activities and terrorist elements used throughout the country to threaten Pak-Chinese plans for the development of CPEC. In recent years, many Chinese people in Pakistan have been kidnapped and killed, despite Pakistan’s efforts to ensure the best security. The army announced the creation of 10,000 people of special strength to protect development projects. The new force, called the Special Security Division, will consist of nine army battalions and six wings of paramilitary forces, ranger and border corps (Abid and Ashfaq 2015). There are serious concerns for the provinces of Kunar and Nuristan in Afghanistan, where many terrorist groups are concentrated, such as Al-Qaeda, the prominent Islamic state, the Tehreek-i-Taliban, the Movement of Islamic Uzbekistan and the Turkmenistan Islamic Party, etc These groups can pose a direct threat to the CPEC in the northern region of Pakistan. There is a need for a better understanding between Islamabad and Kabul for border security (Abid and Ashfaq 2015).

CPEC and Economic Factor

As a business, for CPEC, the biggest problem comes from competitors. The most important is the Iranian port of Chabahar. India intends to invest heavily (USD 85 million) in the development of Chabahar, a few miles from Gwadar and is part of its efforts for access to landlocked Afghanistan on the sea and Central Asia without leaving its rival Pakistan. Chabahar will actually become a transit station for energy imports from the Persian Gulf region and is destined for Afghanistan and Central Asia. It will also become a gateway to the Middle East and perhaps to Europe for exports originating from Afghanistan and Central Asia (Javaid 2016).

Although the Chabahar project has not yet begun in connection with ongoing negotiations on the Iranian nuclear issue, the Gwadar port has already started to operate. However, there is no need to contention the two harbors. Iran is interested in the CPEC through a proposal to link the Iran-Pakistan gas pipeline to China, which has been called “common interest” among the three countries (Abid and Ashfaq 2015).

India’s participation in Chabahar is linked to Pakistan’s refusal to allow India access to transit to and from Afghanistan, so India sees Iran as the best alternative. If Pakistan extends the transit structures to India then India may not be interested in building Chabahar. In recent years, India has been particularly active in the participation of Central Asian states in seeking energy deals. India can be easily be accommodated via the CPEC through the eastern interface in Punjab and Sind and transformed into a stakeholder in the success of both Gwadar and the CPEC (Abid and Ashfaq 2015).

CPEC and Tax and Power Tariff Issues

China has raised serious concerns over the issue of taxation, electricity tariffs and electricity prices with Pakistan, as well as the process of implementing of the China Pakistan Economic Corridor (CPEC) energy projects in Pakistan. According to sources, China has expressed serious reservations about the hurdles and the deferral of tactics purportedly being employed by the Federal Board of Revenue (FBR). According to the agreement, under the CPEC,  imported equipment will be exempt from sales tax and withholding tax. However, the procedure for approving the FBR is slow, which negatively affects the timing of building the project in Pakistan (Abid and Ashfaq 2015). The Chinese authorities have indicated that a reduction in the tariff for renewable energy sources will have a negative impact on the project’s economic efficiency, will reduce investment enthusiasm and will impact on the implementation of projects based on the China-Pakistan Inter-governmental Agreement. The Pakistani party replied that the tariff for renewable energy sources will not remain the same in the future and that the tariff reduction range is closely related to the cost of the project at the tariff request. The cost of renewable energy sources is declining on the international market; In addition, the National Electricity Regulatory Authority (NEPRA) determines a tariff that does not depend on the Government of Pakistan. NEPRA reviews the tariff for all types of fuel after a certain period of time, taking into account the international benchmarks and the cost of energy for ordinary consumers (Abid and Ashfaq 2015).

Indian Concerns

The dice of connectivity loaded by China has left India confused and disoriented. India is also worried about China’s huge investments in Pakistan, in particular, its recent decision on financing the economic corridor of China and Pakistan. China is also helping Pakistan in producing plutonium at the Chinese built Kyushu reactor and will also sell 8 submarines worth $5 billion, will give a strong leap into Pak Navy’s sea power. After the completion of CPEC Pakistan can become a trade hub in the region after Gwadar port will be fully operational, and economic areas are free of duty. Many Central Asian countries have expressed interest in being part of the corridor. This strategic partnership between Pakistan and China bothered India, who openly opposed the opposition, and also Prime Minister Narendra Modi pressured the Chinese president during his visit to Beijing to drop the corridor development plan.

However, China did not give up on pressure and promised to continue working on the project. India is also not happy with the handing over the port of Gwadar and its operations in China. It is reported that New Delhi is fuelling the insurgency in Balochistan, which is rich in oil and gas resources, but the bad rule of law has ceased to operate in the exploration work. Experts believe that the relationship between India and the United Arab Emirates will attempt to crush a Gwadar port development project and create obstacles in the way of exploration in Balochistan (Bhutta 2015).

With the growth of Chinese influence and Russia folds its muscles to regain control of Central Asia, India is struggling to make some progress and expand its sphere of influence in the region. Delhi has chosen Iran and Afghanistan to reach Central Asian countries through a land route, as Pakistan and China control many land connections that provide access to a resource-rich region. India hopes to reach Central Asia through the Iranian port of Chabahar and build a north-south corridor that will run to Afghanistan and eventually spread to Central Asia (Abid and Ashfaq 2015).

CPEC Benefits for Pakistan

Pakistan has been playing an important role in South Asia. After the completion of China Pakistan Economic Corridor; the economic, commercial and geostrategic environment will improve in Pakistan. This will help Pakistan tackle the problems of poverty, unemployment, and inequality in underdeveloped provinces. During the meeting with President Xi Jinping, President Mamnoon Hussain said the economic corridor of China, Pakistan, could change the rules of the game across the region by creating huge business and economic activities and opening new vistas of progress and prosperity for the Chinese people two countries and about three billion people in the region (Yousaf). The CPEC in all respects will be a factor of a game changer and will make China a true stakeholder in Pakistan’s stability and security. It is a win-win situation for both. It will significantly expand the framework for the sustainable and stable development of China’s economic development. China’s investments will increase by more than 15% to USD 274 billion in Pakistan’s GDP. The corresponding progress and prosperity in Pakistan and the patronage of China will help Pakistan get rid of the labels of the “epicenter of terrorism”, the “most dangerous country” and decades of a failed state. “Pakistan has a more favorable financial situation than India, reducing the budget deficit to 4.7% of GDP in 2014 (compared with 7% in India), and Pakistan is more competitive and less expensive than an emerging market. China’s economic and military assistance will help largely measures Pakistan to reduce its growing economic and military gap with India and improve its defense capabilities (Abid and Ashfaq 2015). Chinese Ambassador to Pakistan Sun Weidong, while talking about the corridor, said that the creation of energy, transport, infrastructure and industrial projects under the China Pakistan Economic Corridor (CPEC) will benefit all provinces in Pakistan. He said that CPEC is not limited to track, but will link the country with a series of road and infrastructure projects. He explained that infrastructure projects are the port of Gwadar, a second phase of the project to improve the Karakoram Highway, the highway project between Karachi and Lahore, Thakot-Havelian, motorway, Gwadar port expressway, Gwadar international airport and Sukkur Karachi motorway, adding that the project will improve cooperation in the fields of energy, finance, trade, banking, industry, and education (Abid and Ashfaq 2015).

Here are some benefits which Pakistan will take after the completion of CPEC.

Overcoming Energy crises

Energy is described as the life path of the economy of any country. This is the most vibrant instrument of socio-economic development in the country. Because of the growing population and industrial demand, serious energy crises have occurred in Pakistan. The main reason for Pakistan’s poor production is political instability and a growing demand for electricity and a lack of efficiency. A significant solution to the problem has not yet been found and continues to torment citizens since energy supply is one of the fundamental needs in this era of modern technology. Power blackouts and load shedding (deliberate blackouts are common in all areas of Pakistan, especially in large cities. Wapda and KESC have failed to solve the problem, which is a failure of the state system (Abid and Ashfaq 2015). CPEC is an ideal project that will help the country get rid of the energy crisis. Availability of energy in the country will revitalize existing industries, such as textile, to full production and an estimated will add about 2% to Pakistan’s GDP growth (Abid and Ashfaq 2015). Prime Minister Punjab Shahbaz Sharif said China is expanding large-scale economic cooperation in Pakistan and that the government is making serious efforts to resolve the energy crisis, and several projects with Chinese cooperation will begin to produce electricity (Roberts and Sattar 2015).Minister for Development and Reform Planning Ahsan Iqbal said the CPEC structure will cover four main areas and that the energy area is one of them. In the energy sector, the 10,400-megawatt project, which could be completed by 2018, was included in the early harvest program on first priority. In general, Chinese companies will contribute 35 to 37 billion dollars of foreign direct investment for independent power capacity (IPP) in the framework of investment policy available to all investors (Bhattacharjee 2015). These projects will be based on wind, solar, coal and hydroelectric plants with a capacity of 16,400 MW as well as on a transmission system and will be located in all provinces and in Azad Kashmir. He further said that China would be setting up 10 projects of 6,600MW in the Thar Desert, which will transform this remote and underdeveloped region into Pakistan’s energy capital, and will open up economic opportunities for people (Abid and Ashfaq 2015).

Infrastructure development

Infrastructure development, including the development of roads, ports, and highways, is another important segment of the CPEC. This project will primarily improve the integration of Pakistani infrastructure in phases with all sub-regions of Asia and between Europe, Asia and Africa and will remove all trade and investment barriers to create a strong entrepreneurial environment in the region and in all related countries (Abid and Ashfaq 2015). After the completion of this project, Pakistan will modernize and expand the markets for the finished product. The adjacent corridor areas will become attractive locations for the manufacturing industry, agriculture and services, and small and medium-sized businesses will become special beneficiaries. Employment and economic growth are expanding significantly (Bhattacharjee 2015). It will also attract the whole world in search of economic and commercial assistance. according to which the Karakoram Highway was identified in the first phase and the Khunjerab-Havelian Islamabad highway section of the road will be completed in three years. In addition, the CPEC route will be used to create industrial and economic zones for which the Working Group of Economic zone will be set up shortly after the next visit to connect the four provinces, AJK, Fata, and Gilgit-Baltistan, to broaden the benefits of this initiative across the country (Abid and Ashfaq 2015).

Economic Development

The economic corridor of Pak-China will help build a strong and stable economy in Pakistan and will create a significant opportunity for Pakistan to revitalize its industry and promote its economic interests. It will also help overcome the psychological barriers to foreign investment flows from other sources. Despite its restrictive economic regime, India has more than 150 direct, foreign and domestic investment funds. Only three or four of these funds are intended for public investment involving the private sector to encourage direct foreign investment in Pakistan is indispensable (Abid and Ashfaq 2015).Finance Minister Ishaq Dar said the phobia of war may also be defeated because of economic development. Peace and prosperity can be achieved through economic progress (Lim).This project will go beyond the region to achieve colossal changes not only in the national economies of the beneficiary countries but also in the economies of people at the grassroots level.

Balanced environment in South Asia

The CPEC is the pearl in the crown of the new economic paradigm of Pakistan, because Pakistan has the opportunity to act independently of the influence of the West, especially the influence of the United States, as has been recently demonstrated, an annoying factor. The CPEC project will also bring an opportunity to Pakistan for normalizing relations with India, Iran, and Afghanistan, which will ensure balance, strengthen the prospects for peace and improve the socio-economic status of the region’s population.

Removal of poverty

The CPEC is a project that changes the game that will lift millions of Pakistanis out of poverty and misery. The project covers the construction of textile clothing, industrial park projects, dams construction, nuclear reactors installation, and road network building, a railway line which will generate jobs and people will also take ownership of these projects (Hali, Shukui et al. 2015).

Fully equipped hospitals, technical and vocational schools, water supply and distribution in non-developed areas will also improve the quality of life of people.

Peace and prosperity in Provinces

CPEC is not just the name of the road, port and rail system, but also a mega-project of several dollars that will bring peace and prosperity to all the provinces of Pakistan. Gwadar port President Dostain Khan Jamaldini said that CPEC will not only be useful to Balochistan but will also be useful for the other three provinces of the country. Economist Dr. Shahid Hassan said the CPEC will bring greater prosperity throughout the country and reduce the unemployment rate in the country. The operation of the Gwadar port will bring an economic revolution and commercial activity will receive a much-needed boost (Abid and Ashfaq 2015).


  • All political parties should express their full support for the implementation of the economic corridor of China and Pakistan.
  • All political parties should be united and solve their political problems and act for their mutual benefits.
  • The government and all provinces should work together for commercial, economic and cultural development as well as for the peaceful environment in the country.
  • The government should share all details of the CPEC project with all political parties in all provinces.
  • The government should discuss the benefits and challenges of this multi-dollar project with all the provinces.
  • The Pakistani government should provide full support and assistance to foreign workers of different CPEC projects.
  • The government should ensure the safety of foreign workers on different CPEC projects.
  • The government should not delay work in the CPEC because it can provide space for terrorists and militants to create obstacles in the harmonious construction of this project.


The China Economic Corridor in Pakistan is a project that changes the game, which will include a 2000 km connection between Kashgar in Northwest China and the Gwadar port in the Arabian Sea near the Iranian border. When this corridor will be completed, Middle East oil can be thrown to Gwadar, near the Persian Gulf, and transported to China through the Balochistan and the Karakoram Mountain. To implement this project, Pakistan has many problems. At the same time, Pakistan will have many advantages from this corridor.


Abid, M. and A. Ashfaq (2015). “CPEC: Challenges and opportunities for Pakistan.” Journal of Pakistan Vision 16(2): 142-169.

Ahmad, W. (2015). “Balochistan, CPEC-another view.” The Daily Times. Islamabad.

Belokrenitsky, V. Y. (2007). “South-Western Extension of Greater China.” Pakistan Horizon 60(3): 83-98.

Bhattacharjee, D. (2015). “China Pakistan Economic Corridor.”

Bhutta, Z. (2015). “India bid to halt Pakistan projects fails.” The Express Tribune.

Catanza, J., et al. (2015). “Silk Road initiative connects countries on path of prosperity.” The Telegraph 3.

Chowdhury, D. R. (2013). “Pakistan happy to aid in China’s quest for land route to the west; India, not so much.” South China Morning Post 19.

Dellios, R. and R. J. Ferguson (2017). “The human security dimension of China’s belt and road initiative.” Journal of Management and Sustainability 7(3): 48.

Hali, S. M., et al. (2015). “One Belt and One Road: Impact on China-Pakistan Economic Corridor.” Strategic Studies 34(4): 147-164.

Iqbal, A. (2015). “Chinese investments dwarf American package: US media.” The Dawn 21.

Javaid, U. (2016). “Assessing CPEC: Potential Threats and Prospects.” Journal of the Research Society of Pakistan 53(2).

Jawad, R. (2013). “Chinese firms ready to invest billions of dollars in Pakistan.” The News. Karachi.

Lim, A. C.-H. “The China-Pakistan Economic Corridor One Year On–Analysis.”

Liping, X. (2015). “The Development of the “One Belt and One Road” and its Impact on China-US Relations.” Chinese People’s Association for Peace and Disarmament. Beijing, China.

Mahar, A. (2015). Why China’s ‘One Belt, One Road’initiative matters for Asia, Azernews.

Noor, S., et al. (2008). “Pakistan’s Foreign Policy: Quarterly Survey: July—September 2008.” Pakistan Horizon 61(4): 1-12.

Rana, S. and F. Mufti (2015). “China-Pakistan Economical Corridors: Lines of Development-not lines of divide.” The Tribune 17.

Rizvi, H. A. (2015). “The China-Pakistan Economic Corridor: Regional Cooperation and Socio-Economic Development.” Strategic Studies 34(4): 1-17.

Roberts, J. M. and H. Sattar (2015). Pakistan’s Economic Disarray and how to Fix it, Heritage Foundation.

Shoukat, M. A., et al. “Does Infrastructure Development Promote Regional Economic Integration? CPEC’s Implications for Pakistan.”

Sial, S. (2014). “The China-Pakistan Economic Corridor: an assessment of potential threats and constraints.” Conflict and Peace Studies 6(2): 24.

Syed, R. (2013). “China takes over operational control of Gwadar port.” Daily Times.


Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

Related Content

All Tags

Content relating to: "International Relations"

International Relations are the partnerships, connections and relationships between countries and different cultures. Such relationships within the subject of International Relations can relate to laws, economics, policies, and more.

Related Articles

DMCA / Removal Request

If you are the original writer of this dissertation and no longer wish to have your work published on the UKDiss.com website then please: