Wajahat Khan

China Pakistan Economic Corridor (CPEC): Development Opportunities and Challenges

for Pakistan

China Pakistan Economic Corridor (CPEC) is a fifteen-year development project between

Pakistan and China from 2015 to 2030, which aims at linking the China’s largest province

Xingjian to the Gwadar port in Baluchistan through various infrastructure and development

projects such as highways, railways, oil and gas pipelines, and cross border optical fiber link

(Khan et al., 2016). CPEC is part of the One Belt One Road (OBR) project that was initiated in

2013 by China to revive the ancient Silk Route, and now it encompasses countries and regions

having a population of 4.4 billion and US21$ trillion economic volume (Abid & Ashfaq, 2015).

The idea of connecting Gwadar to China existed before, but it was officially signed in 2015

between Pakistan and the Chinese under the OBR project. It is a significant gateway for China to

connect with Africa and the Middle East via Gwadar. It will be an alternate for the 12000km

route, which the Middle East used to supply oil to China (Abid & Ashfaq. ,2015). CPEC aims at

strengthening the trade relations between both countries and identifying the geographic location

importance of both countries. It is playing a vital role in the development of Pakistan by

strengthening its economy, by enhancing the infrastructure, and by assisting in securing social

goals such as educational and tele communicational goals. However, it seems that because of the

internal security of Pakistan, geopolitical issues, and provincial concerns in Pakistan, it would be

very challenging for CPEC to accomplish its goals.

CPEC project is a game-changer for Pakistan’s economy and infrastructure development. From

an economic point of it will help to alleviate poverty, unemployment and to increase the GDP.

CPEC projects are active in all four provinces, including Gilgit-Baltistan. The local people are

getting chance to work in them with good salaries. Under CPEC, project loans are given to the
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deserved people to generate more entrepreneurship opportunities. CPEC projects have the

potential to create employment opportunities in every sector, such as Energy, Railways,

construction, technology, and many more. For instance, in 2017, 30,000 people were hired for

different projects, and it will provide more opportunities in the future (Saad et al., 2019).

Additionally, CPEC is pivotal for the infrastructure development of Pakistan. The US62$ billion

CPEC project will help Pakistan to meet with energy crisis, poor connectivity, and will open the

doors for foreign investors. For instance, 61 percent of the CPEC investment is allocated to

energy projects for the purpose of enhancing the energy networking system. These energy

projects will add 10400MW energy to the Pakistan energy system and will uplift the GDP. About

36 percent of the CPEC fund is assigned to the infrastructure, transport, and communication

(Esteban,2016). The infrastructure project consists of the development of roads, highways, and

ports; it will raise the connectivity of Pakistan with sub-regions in Asia and with Africa and

Europe as the project proceeds towards its completion. The major infrastructure project is the

Gwadar port project, which is not only essential for Pakistan and China but also India,

Afghanistan, and Central Asian countries. According to (Ahmed 2017), Gwadar port is requisite

for China as China will get connected to the Indian Ocean and Eurasia via this port. China will

get access to Gwadar port from Kashghar through Khunjrab highway, which is 2700 km long.

This is important for the exports and imports of China as Esteban stated, “Chinese would save

US$ 2 billion every year if they were to use the CPEC to import its 50% of its current oil

supplies (2016)”. Additionally, this will help Pakistan to get more foreign investors in Pakistan

because of the advantageous route and will ameliorate the economy.

Besides strengthening the infrastructure, CPEC will provide an opportunity for Pakistan to

accomplish its social goals, such as education and telecommunication. Since the project of CPEC
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has been commenced, the educational programs between China and Pakistan have been

enhanced. China has opened its doors for Pakistani students and provides scholarships to study in

various universities of China in different disciplines. According to the Higher Education

Commission (HEC) of Pakistan, more than 28000 Pakistani students are studying in China, and

over 7000 of them are on scholarships (Yamei,2019). Moreover, vocational schools are also

established to nourish the skills of the labor force. For instance, US10 million Pakistani-Chinese

technical and vocation center was opened in Gwadar in 2017 (Esteban,2016). Another part of the

CPEC project is to upgrade the communication system in Pakistan, especially in remote areas, by

updating the social communication networks. The project “Cross Border Optical Fiber Cable”

focuses on elevating the telecom and ICT industry of Pakistan. “It will also provide the ICT

infrastructure for 3G/4G in the northern areas and enhance communication security with an

alternative fiber route (“CPEC. Org”, n.d).” Thus, CPEC projects are helping Pakistan to achieve

its social goals

The completion of the CPEC project is essential and challenge for both the countries because of

some obstacles that include security issues, geopolitical concerns, and provincial concerns of

Pakistan. Firstly, the most significant challenge to CPEC is the security-related issues; from

Xingjian to Gwadar terrorist groups like Tehreek-e-Taliban Pakistan (TTP), Daesh (ISIS),

Baluchistan Liberation Front (BLF), and many others do not want CPEC to be completed that’s

why the terrorists do bombing and kidnapping of workers. For instance, during the 2017-19 five

terrorist attacks have been made against the Chinese (Blackwail,2019). Additionally, Gwadar is

near to districts such as Kech, where Baloch insurgents have grown up over the past few years.

From 2007 to 2014 23 percent of reported terrorist attacks were from Gwadar and the nearby

regions (Abid &Ashfq,2015). Furthermore, International politics can also be another hindrance.
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For example, Pakistan is not having good relations with India and Afghanistan. Therefore, India

and Iran have started the “new Chabahar project to counter the Gwadar port (Ahmed, 2017)”.

Chabahar will provide access to landlocked Afghanistan and Central Asian countries to import

their energy resources from Gulf, and this will affect the significance of Gwadar port. Another

concern is the stability in Afghanistan because, without a peaceful Afghanistan, CPEC cannot

achieve goals; since many CPEC routes pass through areas where there is influence of

Afghanistan. That’s why without having good relationships with Afghanistan and India, Pakistan

and China cannot achieve their desires.

Moreover, all four provinces and Gilgit-Baltistan have their concerns about CPEC. First of all,

Baluchistan has a significant contribution to this project as Gwadar port is located in this

province. However, because of negligence of government, some of the provincial political parties

are against Pakistan and CPEC. According to (Ahmed 2017), the nationalist leaders of

Baluchistan, Barhamdagh Bughti, and the leaders of banned Baloch Republican Party (BPR) are

strongly condemning the CPEC and Gwadar port development and posing to separate

Baluchistan from Pakistan. Secondly, the government of Khyber Pakhtunkhwa (KPK) is against

the diversion of the original Gwadar-Kashghar route because it will benefit the province of

Punjab more than KPK (Saad et al., 2019). Thirdly, the Gwadar-Kashghar route has to pass

through Gilgit-Baltistan, but it is still a disputed territory, and, in the past, it has seen many

sectarian conflicts that’s it another big challenge for the CPEC. If Pakistan does not resolve these

conflicts, then it will be hard for Pakistan to repay all the debts to China. For instance, Sri Lanka

handed over the strategic port of Hambantota to China on a 99-year lease (Schuetz,2017) as it

was unable to pay its debts. Similar can happen in Pakistan if the issues are not resolved.
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In brief, CPEC is one of the projects of OBR that aims at connecting Chinese western largest

province Xinjiang to Gwadar port in Baluchistan via various connecting routes from all the

provinces of Pakistan, including Gilgit-Baltistan. It is highly significant for both countries as it

will provide easy access for China to connect with the middle east and European countries. On

the other hand, for Pakistan, it is a game-changer as it will help Pakistan to improve and develop

its economy, infrastructure, and to achieve its social goals such as education and advancement in

technology. CPEC contains various infrastructure and development projects such as the

construction of highways, railways, oil and gas pipelines, and cross border optical fiber link

connection. The core part of CPEC is the Gwadar port, which is crucial for both countries. From

Pakistan's point of view, it can develop the economy, provide jobs, alleviate poverty, can bring

foreign investment, and highlight the strategic importance of Pakistan. China can make its trade

via Gwadar port quickly and in a short period. However, there are specific challenges that can as

barriers in the successful completion of CPEC, such as the security issues, geopolitics, and

provincial concerns of Pakistan. If Pakistan successfully fights against these challenges CPEC

will achieve its primary goals. Otherwise, Pakistan will face difficulties, and the consequences

will be fatal as similar to Sri Lanka, who handed over the entire port to China because of being

unable to pay the debts and resolve their internal state conflicts.
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References:

Abid, M., & Ashfaq, A. (2015). CPEC: Challenges and opportunities for Pakistan. Journal of

Pakistan Vision, 16(2), 142-169.Retrieved from http://pakistanhouse.net/wp-

content/uploads/2016/11/CPEC-challenges.pdf

Ahmad, R. (2017, April 27). China-Pakistan Economic Corridor and Its Social Implication on

Pakistan: How Will CPEC Boost Pakistan s Infrastructures and Overcome the Challenges?

Retrieved from https://www.omicsonline.org/open-access/chinapakistan-economic-corridor-

and-its-social-implication-on-pakistanhow-will-cpec-boost-pakistans-infrastructures-and-

overcome-t-2151-6200-1000265.pdf

Blackwail, H. (2019, September 19). Pakistan refocuses on counter-terrorism to protect China’s

investments. Retrieved from https://www.iiss.org/blogs/analysis/2019/09/sasia-pakistan-

protects-chinese-investments

[CPEC.org,] (n.d). Retrieved from http://cpec.gov.pk/

Esteban, M. (2016). The China-Pakistan Corridor: a transit, economic or development

corridor. Strategic Studies, 36(2), 63-74. Retrieved from. http://pakistanhouse.net/wp-

content/uploads/2016/11/CPEC-Development.pdf

Khan, M., Malik, A., Ijaz, S., & Farwa, U. (2016). China Pakistan Economic Corridor: A game

changer. Institute of strategic Studies Islamabad (ISSI).

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Saad, A., Xinping, G., & Ijaz. M. (2019). China-Pakistan Economic Corridor and Its Influence

on Perceived Economic and Social Goals: Implications for Social Policy

Makers. Sustainability, (18), 4949. Retrieved fromhttps://doi.org/10.3390/su11184949

Schultz, K. (2017, December 12). Sri Lanka, Struggling with Debt, Hands a Major Port to China.

The New York Times. Retrieved from: https://www.nytimes.com/2017/12/12/world/asia/sri-

lanka-china-port.html

Yamei. (2019, August 17). Pakistani Students get fully funded scholarships to study in China.

Xinhua News. Retrieved from http://www.xinhuanet.com/english/2019-