New Hopes & New Destinations

History is being made by China through its economic corridor project that would connect its less developed regions and Pakistan with Central Asia and Europe. The project would offer a 6000 kms shorter route towards the Persian Gulf and may create a host of trade related opportunities for countries in South Asia as well as Central Asia. The plan to establish economic zones and power generation projects along the trade corridor has changed the entire narrative of the development matrix in the region. China Pakistan Economic Corridor (CPEC) is becoming the next option for the world. The project is destined to reshape the economic potential of the countries with China in the lead. The development and diplomatic matrix in the next two decades will define the facets of politics in the next century and CPEC is surely going to be a beneficial factor. The thesis here is to highlight that CPEC is a historic opportunity for all the countries surrounding China to connect with a global trade route that can transform the fate of Asia in the next decades. Analysts have indicated that CPEC will positively transform the political economy of Afghanistan. A New York based think tank, Centre on International Cooperation, recently conducted a study that anticipates Pakistan’s positive role in political reconciliation and economic stability of Afghanistan. Reason for this hope is connected with Pakistan and China’s joint vision about development and security. Since the meeting of Istanbul Process in 2014, China has been clearly indicating the need for all the neighbors of Afghanistan to join hands for the economic development of the country. China-Afghanistan-Pakistan Trilateral Strategic Dialogue held in February 2015 itself underlined the need for international cooperation on Afghanistan. The Shanghai Cooperation Organization itself is another regional platform for coordinating policy level approaches towards Afghanistan. The point is that China is taking a lead in the region to ensure that peace and prosperity becomes a destiny for Afghanistan. The construction of CPEC connecting Afghanistan with Gwadar port is a manifestation of Pakistan and China’s desire for peace and prosperity of Afghanistan.

China has already invested around $ 7.5 billion in Afghanistan out of which around $200 million has been extended in the recent years. Beijing’s intention to invest in development of Afghanistan gives a hint to the understanding that economic development is the best route towards peace and stability. Chinese companies are already negotiating exploration of copper fields in Logar Province, Iron ore deposits in Panjsher and goldmines in Badakhshan. Future prospects of these explorations are connected with transportation and communication means. As a result of CPEC, the traditional trade route between Xinjiang Province and Wakhan Corridor would be reinvigorated. Strategic location of Afghanistan in the heart of Asian trade route is destined to bolster its economy after the operationalization of CPEC.


The trade opportunities created by CPEC have brought the region close to a consensus on economic cooperation. Countries in Central Asia as well as Russia would gladly use Gwadar Port for transit of their cargo to Middle East. In anticipation of these developments, Russian companies have approached Pakistan for joint ventures in energy sector. No less than $ 5 billion Russian investment linked with CPEC plans has been indicated. Rostekh, a Russian Corporation would construct a 700 miles gas pipeline by 2017 with an investment of $ 2.5 billion as well. Analysts see that Russia-China-Pakistan triangle can bolster their respective economies, positively exploiting the opportunities offered by the competitive international trade route of CPEC. Russia is surely to benefit by finding new markets for its exports in the new emerging axis.


The Central Asian Republics are thrilled at the announcement of a new regional trade corridor for their land locked territories. Prime Minister of Kazakhstan and President of Tajikistan expressed their eagerness to be part of this wonderful transnational project. Chinese government has already announced construction of a railway network connecting Uzbekistan and Kyrgyzstan with China and Pakistan. A highway connecting Kashghar with Kyrgyzstan has been upgraded. Another highway already connects Tajikistan with Kashgar bypassing Afghanistan. The distance between Almaty and Urumqi would now be transformed into a new paradigm of cultural and economic partnerships destined to shape a world of new possibilities.


Iran and China have recently signed 17 agreements on various projects of economic cooperation including revival of ancient Silk Road trade route. Iran and Russia have been forging economic and diplomatic alliance in view of changed strategic matrix. Both Iran and Russia have hopes in CPEC for rebuilding trade links with Europe and Asia. In this backdrop the Chinese President’s resolve to increase the volume of trade and investment in Iran to $600 billion in ten years indicates which way the wind is blowing. Some analysts present the development of Chabahar Port as a substitute of Gwadar Port, however keeping in view the volume of trade and investment along the CPEC, region can exploit both the facilities by focusing specific countries and services. China and CPEC will be the main thread-line in new international economic cooperation matrix developing in the next decade.


China has set an example that development is the best strategy for the world today. India in the neighborhood is a big country with huge demographic challenges. India enjoys support of China on various political issues that provide a common ground for realization of mutual objectives of economic development. CPEC is a mega project that promotes connectivity and can be beneficial to all the countries of the region including India. Investment in the subcontinent is ultimately destined to alleviate poverty and to create conditions for better economic opportunities. A study conducted at Institute of Chinese Studies in Delhi have concluded that India is ignoring the prospects and opportunities that CPEC can offer and that bilateral trade between India and China can multiply manifolds if disputes involving India, China and Pakistan are resolved. Time is for policy makers to think out of the box to indicate options for the stakeholders to reach Consensus on Promotion of Economic Cooperation (CPEC) in the region.

Mukhtar Paras Shah

Author is a development professional and an expert on bilateral economic cooperation.

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