Globalization

CPEC

By:

Abdur Rehman Qureshi

BBA 7G
China-Pakistan Economic Corridor (CPEC), massive bilateral project to improve
infrastructure within Pakistan for better trade with China and to further integrate the countries
of the region. CPEC will not only benefit China and Pakistan but will have positive impact on
the neighboring regions. Enhanced understanding through academic, cultural and regional
knowledge and culture, activity of higher volume of flow of trade and businesses, producing
and moving energy to have more optimal businesses and enhancement of co-operation by
win-win model will result in well connected, integrated region of shared destiny, harmony
and development.

The project was launched on April 20, 2015 when Chinese President Xi Jinping and Pakistani
Prime Minister Nawaz Sharif signed 51 agreements and Memorandums of Understanding
valued at $46 billion. The goal of CPEC is both to transform Pakistan’s economy—by
modernizing its road, rail, air, and energy transportation systems—and to connect the deep-
sea Pakistani ports of Gwadar and Karachi to China’s Xinjiang province and beyond by
overland routes. This would reduce the time and cost of transporting goods and energy such
as natural gas to China by circumventing the Straits of Malacca and the South China Sea. The
announcement of joint space and satellite initiatives between Pakistan and China, spurred by
CPEC, followed in 2016. CPEC is part of the larger Belt and Road Initiative—to improve
connectivity, trade, communication, and cooperation between the countries of Eurasia—
announced by China in 2013.

Opportunities:

CPEC is bringing a lot of opportunities in different sectors including; energy (electricity

generation and transmission, oil and gas exploration and distribution), infrastructure (road,
rail, sea, aviation, pipelines, ICT parks and enterprising), real estate, Gwadar Port and Smart
Port city ad Industrial Parks development and management, trade, agriculture, tourism,
financing and people to people linkages

Pakistan has been blessed with a lot of tourism opportunities across the country. After the
inception of CPEC, most of the aforementioned pre-requisites have been addressed including
improvement in security situation, connectivity and energy related services. However,
facilitation and sites development and promotion are the potential areas for private sector to
focus on besides the various CPEC routes and axis. Following are some of the options; Eco
Tourism – In GB, Northern KPK and AJK, Cultural Tourism – In Central KPK, all across
Punjab and Sindh, Desert Tourism – Balochistan and Eastern Sind, Agricultural Tourism –
Punjab and Sindh, Costal Tourism – Southern Balochistan and Southern Sindh.

China is keen to establish collaborative research centers focusing particularly on agriculture

and seed sector of Pakistan. A collaborative research between China and Pakistan would help
to enhance productivity and add value in the agriculture sector of Pakistan. It would open
new avenues of growth in Pakistan and would positively affect the lives of people by
providing better jobs to the masses. It carries more prospects for all the stakeholders working
in the agriculture value chain from seed to market and boost agricultural exports.

With the CPEC project taking shape in years to come, property prices are further expected to
increase especially along the routes and its various axis. This will boost the real estate market
by building investor confidence, which will result in accelerating the economic activity.
New International commercial banks are shifting to Pakistan; it’s a good omen that the Bank
of China has established its branch in Pakistan. It would bring new and modern financial
products which will support and upgrade the existing financial system.

The Gwadar port city is expected to soon become one of the most in-demand real estate
investment destinations in Asia. CPEC is poised to give tremendous boost to the real estate
industry in Pakistan. New opportunities to provide consultancy and brokerage services for
Chinese and Pakistani investors.

Challenges:

The CPEC has received a lot of criticism inside of Pakistan, both from those with nationalist
perspectives and from across the political spectrum from those raising genuine concerns
about the adverse impacts on ordinary people. Protests have occurred in some regions against
the way that the CPEC is being implemented by both the Pakistan government and China,
with some reportedly opposed to “Chinese imperialism”. Although some have suggested that
CPEC may potentially improve Pakistan’s economic growth and have positive outcomes, for
instance through allowing producers (such as fruit growers) from Pakistan to sell produce
more easily in China, concerns have also been raised that in reality impacts may bring few
benefits to locals and act as a drain on their resources. Fears both of displacement and
destruction of farmlands from which people make their livings represent key concerns.
Around the Gwadar port there are also concerns about the impact on the livelihoods of local
fishermen and their potential displacement to locations with inadequate amenities and
facilities to accommodate all of them so that they can maintain their current incomes.

Regional security could be the biggest issue to the CPEC as it passes through some of the
areas facing the biggest security challenges. The biggest challenged to the CPEC is the
regional security environment; specifically the Afghanistan conundrum. China’s huge
investment in the region is hinged on the peace and stability both in Pakistan, Afghanistan
and Western parts of China. This is why China is actively pursuing to bring the Taliban to
negotiating table within the quadrilateral framework between China, Pakistan, US and
Afghanistan. The security situation in Afghanistan is getting worse day by day and even
could be devastating with the withdrawal of NATO forces from Afghanistan as the Taliban
have refused to come to the negotiating table initiated by the quadrilateral forum comprising.
It cannot guarantee to bring the Taliban to engage in peace talks.

In Baluchistan, CPEC is exacerbating existing grievances among a population whose

perceptions of exploitation and neglect by the center, together with authorities’ suppression
of dissent, have long fueled an insurgency.

In Sindh’s Tharparkar district, coal-based CPEC power projects are not only damaging the
environment, but are also displacing locals from their homes and could destroy livelihoods.

As an economic enterprise, for the CPEC, the greatest challenge comes from competitors.
The most significant is the Iranian port of Chabahar. India intends to invest significantly ($85
million) in the development of Chabahar, which lies a few miles away from Gwadar and is
part of its efforts for access to landlocked Afghanistan and Central Asia while bypassing rival
Pakistan.
New updated plans and projects:

Some of the projects are:

Coal-fired Power Plants at Port Qasim Karachi:

The Project directly creates over 5000 job opportunities to Pakistani engineers and labors
during construction period, and annually creates around 600 job opportunities to Pakistani
manpower during operation period. Produces 660 MW of Electricity

Suki Kinari Hydropower Station, Naran,Khyber Pukhtunkhwa:

It is the largest hydro independent power producer in Pakistan. By 2022, the project is
expected to generate 3,081 GWh million units per year. The project is expected to increase
existing power generation capacity by more than five percent. The KPK government will earn
approximately Rs. 1.5 billion per year for water use in the form of royalty. Through the
project, KPK will receive additional 113 MW electricity in its share.

Karot Hydro Power Station:

3,500 employment opportunities will be offered during the construction period. The project
will have a reservoir storage capacity of 164.5m m3. The project will generate power that
will cater approximately seven million households. It is expected to reduce carbon dioxide
emissions by 3.5 million tons per year.

Sahiwal Coal-fired Power Plant, Punjab:

The project can produce over nine billion KWh per annum. It can satisfy the electricity demand of 10
million people. The project is expected to fill 25 percent of the power deficit in Pakistan

Sachal Wind Farm (Jhimpir, Thatta):

It is providing electricity to 100,000 households. The project is annually generating

136,500MWh of clean energy

Peshawar-Karachi Motorway (Multan-Sukkur Section):

Sukkur-Multan has a design speed of 120 km per hour, and it is a two-way

six-lane road. The project offered job opportunities to over 23000 locals living along
the motorway

Orange Line – Lahore:

It is designed to handle 30,000 passengers per hour per direction. Each train car has a
capacity to carry 200 passengers and each train set will have carrying capacity of 1000
passengers. The train is automated with a driver. The project will not only transform the
public transportation system but will also help in resolving traffic woes that are being faced
by the inhabitants of the city