China – Pakistan Economic Corridor: A Giant Leap Towards the Brighter Future.

Regional connectivity is an important element of the recently unveiled Vision 2025 of the Government of Pakistan. The China-Pakistan Economic Corridor (CPEC) is mentioned as an integral element in realizing the potential of regional connectivity and trade with the South Asian Association for Regional Cooperation (SAARC), the Association of South East Asian Nations (ASEAN), the Central Asia Regional Economic Cooperation (CAREC), and the Economic Cooperation Organization (ECO). Chinese President Xi Jinping also proposed forging concept “China-Pakistan Community of Shared Destiny” during his meeting with President of Pakistan Mamnoon Hussain back in 2014. According to analysts, the China-Pakistan Economic Corridor (CPEC) serves as the backbone of President Xi’s proposal. President Xi’s foreign policy concept titled “Community of Shared Destiny” is predicated on cooperation for mutual benefit with certain key characteristics; the most important one being the pursuit of common interests through mutually beneficial partnerships. Another important aspect is that it calls for strengthening of trust among nations through mutual understanding.

A major milestone for establishing the “China-Pakistan Community of Shared Destiny” was achieved in May 2013, when an agreement was signed to establish the China-Pakistan Economic Corridor (CPEC) to connect Pakistan’s Gwadar Port with Kashgar in the western area of China close to Pakistan’s border. China is developing a Special Economic Zone (SEZ) in Kashgar, which would mean rapid development of the area requiring substantial external resources from or through Pakistan — utilizing the developing port city of Gwadar. Pakistan’s Gwadar Port provides this less-developed western part of China, an easy access to the warm waters of the Arabian Sea and considerably reduces the time and resources required for transporting trade goods to and from western China and West Asia. It is being argued that the development of the CPEC would bring unprecedented economic rewards for Pakistan as well as China.

The importance of the CPEC is amplified by the fact that it is also going to link up with the greater Chinese plan of the Silk Road Economic Belt (SREB) that would connect China with Europe through Central Asia. The “five connections” proposed by the Chinese leadership for the Silk Road Economic Belt are policy exchange, road network, currency circulation and people’s friendship. Connecting with the SREB, the CPEC is of immense significance to China as well. We can say it safely that CPEC has the potential to further cement the close bonds between the two countries in the days to come.

Kashgar is destined to grow exponentially after the operationalization of the SEZ in the city. The development of Shenzhen, the city that pioneered the concept of SEZs, would provide us with an insight into the growth patterns of SEZs. We expect Kashgar to grow at the rate of over 20 percent per annum. Earlier we have seen that Shenzen grew at the astounding rate of 25.8 percent from 1979 to 2009 which has been the highest increase in 30 years. Pakistan can thus, enormously benefit from it during its development as well as operational phase. The development of communication infrastructure would also help promote the tourism industry of the picturesque Northern Areas of Pakistan bordering China. There are many avenues for Pakistani businesses for export business in China. For instance, China is the largest consumer market for gemstones, which is an opportunity for Pakistan. Pakistan has a potential yield of 800,000 carats of Ruby, 875,000 carats of Emerald, and 5 million carats of Peridot, which remains under-utilized. According to Shah Faisal Afridi, President of Pak-China Joint Chamber of Commerce and Industry (PCJCCI), China being the world’s largest consumer market for gems and jewellery, could help in utilizing Pakistan’s full potential through investment in the sector and promoting exports of gems to China.

There are strong bilateral trade relations between the Pakistan and China. Currently around $12 billion per year, the trade between Pakistan and China is estimated to reach $15 billion in the next couple of years. The volume of bilateral trade between Pakistanfrom January to May 2014 was $6 billion, exhibiting a 12.66 percent growth rate.

CPEC is not just a name of any single road project

rather it’s a portfolio of projects which includes Gwadar Port,

energy infrastructure and industrial zones. It will connect

Gwadar Port with Khunjrab through Western, Central and

Eastern routes to be executed simultaneously. There is no change

in original plan of CPEC. Industrial zones will be set up in

all the provinces. Elected government is committed to complete

the Western route priority basis till December, 2016.

China also has substantial investments in Pakistan with more than 120 Chinese companies operating in the country. The importance of Chinese investment in Pakistan is well acknowledged by the leadership of Pakistan. For instance, during his July 2013 China visit, besides the government-to-government interactions, Prime Minister Nawaz Sharif held meetings with the Chinese business community to encourage them to invest in Pakistan. The high-level state visits of the leaders of the two countries have assumed great significance lately for their role in carrying the shared perceptions of development forward and also for signifying the importance the two countries attach to their relations with one another.

In May 2013, Chinese Prime Minister Li Keqiang visited Pakistan to sign the landmark CPEC agreement. Prime Minister of Pakistan Mian Muhammad Nawaz Sharif visited China in July 2013, his first official visit abroad since assumption of the office. In February 2014, President of Pakistan Mamnoon Hussain, visited China wherein Chines President Xi Jinping put forward the proposal of forging “China-Pakistan Community of Shared Destiny”. President Hussain visited China once again in May 2014 to attend the 4th summit of the “Conference on Interaction and Confidence-Building Measures” in Asia. Prime Minister Sharif visited China again in April 2014 to attend the Asia Forum in Boao in April 2014. President Xi Jinping visited Islamabad in September 2014 in April 2015. During this epic visit, Pakistani and Chinese officials signed a series of more than 50 accords to inaugurate the China-Pakistan Economic Corridor, which would create a network of roads, railways and pipelines linking China’s restive west to the Arabian Sea through Pakistan. The central route will link Gwadar, Khuzdar and other areas on way to Dera Ghazi Khan, Dera Ismail Khan and Peshawar, while the eastern route will connect Gwadar to Ratodero, Sukkur and Karachi and upward to cities in Punjab and from there to Khyber Pakhtunkhwa and Khunjerab Pass.

The CPEC is a multidimensional project encompassing Pak-China connectivity through road and railway networks, laying down of fibre-optic cables, the operationalization of the Gwadar Port, and several energy projects. Under the CPEC, China has committed to help Pakistan with the construction of a fiber-optic cable from the Chinese border to the capital of Pakistan, the upgrading and realignment of the Karakoram Highway linking Kashgar with Abbottabad, the construction of the new Lahore-Karachi Motorway, and an early completion of pending work in nine power projects. Chinese cooperation for the construction of the Diamer-Bhasha Dam and completion of the Nandipur power project are also part of the CPEC. Implementation of the projects under the CPEC has been divided into three phases, where short-term projects are estimated to be completed by 2017, medium-term by 2025 and long-term by 2030. Realization of these dreams and materialization of these projects would mean a lot for Pakistan’s future.

Amna Malik

Author is the President, Center Of Pakistan And International Relations (COPAIR) and Editor -in- Chief of ‘Mélange’.

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