China–Pakistan Economic Corridor

China–Pakistan Economic Corridor also known by the acronym CPEC) is a collection of

infrastructure projects currently under construction throughout Pakistan. Originally valued at $46
billion, the value of CPEC projects is now worth $ 54 billion.] CPEC is intended to rapidly
modernize Pakistani infrastructure and strengthen its economy by the construction of: modern
transportation networks, numerous energy projects, and special economic zones. On 13
November 2016, CPEC became partly operational when Chinese cargo was transported overland
to Gwadar Port for onward maritime shipment to Africa anWest Asia.

A vast network of highways and railways are to be built under the aegis of CPEC that will span
the length and breadth of Pakistan. Inefficiencies stemming from Pakistan's mostly dilapidated
transportation network are estimated by the government to cause a loss of 3.5% of the country's
annual gross domestic product Modern transportation networks built under CPEC will link
seaports in Gwadar and Karachi with northern Pakistan, as well as points further north in western
China and Central Asia]A 1,100 kilometre long motorway will be built between the cities of
Karachi and Lahore as part of CPEC,[10] while the Karakoram Highway between Rawalpindi and
the Chinese border will be completely reconstructed and overhauled.[11] The Karachi–Peshawar
main railway line will also be upgraded to allow for train travel at up to 160 km per hour by
December 2019.[12][13] Pakistan's railway network will also be extended to eventually connect to
China's Southern Xinjiang Railway in Kashgar.[14] The estimated $11 billion required to
modernise transportation networks will be financed by subsidized concessionary loans.[15]

Over $33 billion worth of energy infrastructure are to be constructed by private consortia to help
alleviate Pakistan's chronic energy shortages,[16] which regularly amount to over 4,500MW,[17] and
have shed an estimated 2–2.5% off Pakistan's annual gross domestic product. [18] Over 10,400MW
of energy generating capacity is to be brought online by the end of 2018, with the majority
developed as part of CPEC's fast-tracked "Early Harvest" projects.[19] A network of pipelines to
transport liquefied natural gas and oil will also be laid as part of the project, including a
$2.5 billion pipeline between Gwadar and Nawabshah to eventually transport gas from Iran.[20]
Electricity from these projects will primarily be generated from fossil fuels, though hydroelectric
and wind-power projects are also included, as is the construction of one of the world's largest
solar farms.

CPEC's potential impact on Pakistan has been likened to that of the Marshall Plan undertaken by
the United States in post-war Europe.[22][23][24][25] Pakistani officials predict that CPEC will result in
the creation of upwards of 2.3 million jobs between 2015–2030, and add 2 to 2.5 percentage
points to the country's annual economic growth. [26] Were all the planned projects to be
implemented, the value of those projects would be roughly equivalent to all foreign direct
investment in Pakistan since 1970,[11] and would be equal to 17% of Pakistan's 2015 gross
domestic product.[27]

CPEC Projects for Balochistan (16 Projects)

1.  10 to 11 Projects in Gawadar ( 1 to 4bn $ )
2. Hubco Coal Power Plant ( Energy Project )
3. Khuzdar to Basima Highway
CPEC Projects for KPK  ( 8 Projects)
1. Dry port Havelian
2. Sukhi Kinari Hydro Power Project
3. Karakoram Highway ( From Havelian to Thakot )
4. Upgradation of ML1
5. Raikot-Thakot Highway
6. DI Khan to Quetta Highway
CPEC Projects for Sindh ( 13 Projects)
1. Matiari to Lahore Transmission Line
2. Matiari to Faisalabad
3. Port Qasim Power Plant
4. Engro Thar Power Field
5. Thar Block1, Block2 Power Projects
6. Dawood Wind Farm Banbhore, Sindh
7. Jhimpir Wind Power Plant Thatta District, Sindh
8. Sachal Wind Farm
9. China Sunec Wind Farm
10. Upgradation of Motorway1
11. Karachi Lahore Motorway ( Karachi Sukkar Section )
12. Thar Coal Block 1
13. Gawadar Nawabshah LNG Terminal & Pipeline
CPEC Projects for Punjab ( 12 Projects)
1. Fibre Cable Rawalpindi to Khunjerab
2. 2 Economic Zones
3. Karachi Lahore Motorway ( Sukkar Multan Section )
4. ML1 Upgradation
5. Sahiwal Coal Power Plant
6. Rahinyar Khan Power Plant
7. Hydro Power Plant ( inc Lahore Orange Line which does belong to CPEC )
8. Matiari Lahore Transmission Line
9. Matiari Faisalabad Transmission Line
10. Quaid e Azam Solar Park Bahawalpur
CPEC Projects for Balochistan (16 Projects)
1.  10 to 11 Projects in Gawadar ( 1 to 4bn $ )
2. Hubco Coal Power Plant ( Energy Project )
3. Khuzdar to Basima Highway
CPEC Projects for KPK  ( 8 Projects)
1. Dry port Havelian
2. Sukhi Kinari Hydro Power Project
3. Karakoram Highway ( From Havelian to Thakot )
4. Upgradation of ML1
5. Raikot-Thakot Highway
6. DI Khan to Quetta Highway
CPEC Projects for Sindh ( 13 Projects)
1. Matiari to Lahore Transmission Line
2. Matiari to Faisalabad
3. Port Qasim Power Plant
4. Engro Thar Power Field
5. Thar Block1, Block2 Power Projects
6. Dawood Wind Farm Banbhore, Sindh
7. Jhimpir Wind Power Plant Thatta District, Sindh
8. Sachal Wind Farm
9. China Sunec Wind Farm
10. Upgradation of Motorway1
11. Karachi Lahore Motorway ( Karachi Sukkar Section )
12. Thar Coal Block 1
13. Gawadar Nawabshah LNG Terminal & Pipeline
CPEC Projects for Punjab ( 12 Projects)
1. Fibre Cable Rawalpindi to Khunjerab
2. 2 Economic Zones
3. Karachi Lahore Motorway ( Sukkar Multan Section )
4. ML1 Upgradation
5. Sahiwal Coal Power Plant
6. Rahinyar Khan Power Plant
7. Hydro Power Plant ( inc Lahore Orange Line which does belong to CPEC )
8. Matiari Lahore Transmission Line
9. Matiari Faisalabad Transmission Line
10. Quaid e Azam Solar Park Bahawalpur

OBOR and CPEC

China’s friendship is based on geopolitical compulsions.

Putting it into perspective, CPEC is part of China’s grand vision, known as the One Belt,
One Road (OBOR) initiative. This vision extends from the Baltics in Europe to Southeast
Asia and from China to Africa. Trace it on the map and the road traverses all the countries in
between. It is not a physical road like the Silk Road, that historic trade route from China to
Europe. That old Silk Road was not like Sher Shah Suri’s road from Peshawar to Kolkata,
but caravans meandering on different routes from one caravanserai to another, carrying both
goods and ideas. China has accumulated $3.2 trillion in foreign exchange. It can be used both
for investment and to buy influence around the world

The recipients of OBOR initiatives in Africa are Kenya, Tanzania and Zimbabwe. Eastern
Europe presents the farthest geographic stretch of OBOR, and of China’s reach in
historically more advanced capitalist economies. In Poland, a railway project was
inaugurated in 2013. Hungary has become the first EU member-state to initiate a Chinese
high-speed rail project under OBOR. Russia and China are collaborating on the massive
Power of Siberia gas pipeline project. In Southeast Asia, one of the most recent OBOR rail
projects to be launched is the high-speed railroad (costing $6 billion) connecting the Laotian
capital of Vientiane to China. A rail project has also been completed in Indonesia.

Unsurprisingly, China has won the feasibility study for two other railway projects —
Mumbai to New Delhi and New Delhi to Chennai.

CPEC, a part of OBOR, offers great strategic advantage to China as it gains physical access
to the Indian Ocean and closer proximity to Middle Eastern oil resources. Other OBOR
projects around the world do not offer such advantages to China. This is a shrewd global
strategic move. China’s global rivals will, of course, factor this in their countermoves.

China invites India to join One-Belt-One-Road project

Chinese Ambassador to India Luo Zhaohui recalls that when the Mumbai attack took place in November 2008
he was China’s envoy to Pakistan and that he ‘did a lot of mediation at that time’.

NEW DELHI: Chinese Ambassador Luo Zhaohui has called on India to join its One-Belt-
One-Road project and assured New Delhi that the China-Pakistan Economic Corridor
(CPEC) would not impinge on anyone’s sovereign rights.

The Chinese embassy on Monday released the text of Mr Luo’s remarks made to an Indian
think-tank on Friday.

“Some people in the West misread China and tend to think that the ‘Dragon’ and the
‘Elephant’ are inevitable rivals, and that China would not like to see India developing. This
conception is wrong. We hope to see India develop well and we are more than happy to help
India develop to achieve common development,” he said in an address at the United Services
Institute.

Despite recent tensions between the two countries, President Xi Jinping and Prime Minister
Narendra Modi will have opportunities to meet each other on the sidelines of summits to be
held by the Shanghai Cooperation Organisation, G20 and BRICS.

“We need to properly manage differences. As two large neighbours, it is natural that we have
some differences. Even family members may have problems,” Mr Luo said.

“Second, restart negotiation on China-India free trade agreement. Third, strive for an early
harvest on the border issue. Fourth, actively explore the feasibility of aligning China’s ‘One-
Belt-One-Road Initiative’ (OBOR) and India’s ‘Act East Policy’,” he said.
The OBOR and regional connectivity could provide China and India with fresh opportunities
and highlights for the bilateral cooperation. The OBOR is a major public product China has
offered to the world. As close neighbours, China and India could be natural partners in
connectivity and the OBOR. India still has reservations over the OBOR, saying that the
CPEC passes through Azad Jammu & Kashmir, raising sovereignty concerns.

“China has no intention to get involved in the sovereignty and territorial disputes between
India and Pakistan. China supports the solution of the disputes through bilateral negotiations
between the two countries. The CPEC is for promoting economic cooperation and
connectivity. It has no connections to or impact on sovereignty issues,” the envoy said.

He recalled that China and India have had successful experience of delinking sovereignty
disputes with bilateral relations even earlier.

“In history, we have had close cooperation along the ancient Silk Road. Why shouldn’t we
support this kind of cooperation today? In a word, China is sincere in its intention to
cooperate with India on the OBOR, as it is good for both of us.”

On promoting India-Pakistan reconciliation, China hopes that both sides could live together
in peace.

“The development of China, India, Pakistan and the stability of the whole region call for a
stable and friendly environment. Otherwise, how could we open up and develop? That’s why
we say we are willing to mediate when India and Pakistan have problems. But the
precondition is that both India and Pakistan accept it. We do this only out of goodwill. We do
hope that there is no problem at all. When the Mumbai terrorist attack on Nov 26, 2008, took
place, I was Chinese Ambassador to Pakistan, and I did a lot of mediation at that time.”

China strongly opposes terrorism and is ready to work with India, Pakistan, Afghanistan and
the international community in fighting the menace.

China Indo Conflicts

The cause of the war was a dispute over the sovereignty of the widely separated Aksai Chin
and Arunachal Pradesh border regions. Aksai Chin, claimed by India to belong to Kashmir and
by China to be part of Xinjiang, contains an important road link that connects the Chinese
regions of Tibet and Xinjiang.
What are the main conflicts between India and China?

Following Tibet are two border disputes - one in a region called Aksai Chin and another in a region
called Arunachal Pradesh. Both nations claim both regions although China controls the former and India
the latter. In both these places the geography favors the current arrangement. With both nations nuclear
armed, it is inconceivable for any solution other than formalizing the status quo. However, both nations
have a fairly noisy nationalist brigade that doesn't want to lose face by stating that reality. Thus, the
border remains unresolved leading to frequent flare up of anger. Balaji Viswanathan's answer to Why did
China invade India in 1962?
Indian government is spending a lot of energy from preventing this from
happening. This includes both defensive punches such as pulling Sri Lanka, Maldives, Myanmar and
Bangladesh back to Indian sphere of influence and offensive punches such as a counter-containment
strategy in South China sea. Vietnam And India Sign Oil, Naval Agreement Amid South China Sea
Disputes, Angering Beijing. From India's perspective, China cannot have it both ways - either both nations
stick to their respective oceans or both nations get involved in both places.

The fourth bone of contention that is yet to erupt fully is water. What is the strategic significance of the
Tibetan Plateau to China and India? A lot of subcontinent's water supply comes from the Tibetan Plateau
and this is one historic reason why India was uncomfortably having any hostile power control that plateau.
However, as China continues to dam in the Tibetan Plateau, the water scarce subcontinent will face
greater pressures. China and India are yet to have any kind of water sharing agreement.
Srinagar, India-administered Kashmir - The multibillion dollar China-Pakistan Economic Corridor, which is
being called a "game-changer" in Pakistan, has raised apprehensions in neighbouring India.
In June 2015, barely two months after Chinese President Xi Jinping announced plans to invest
$46bn to develop infrastructure and energy projects in Pakistan as part of the economic corridor,
or CPEC, India's Prime Minister Narendra Modi told China that it was "unacceptable".
The ambitious project - part of China's "One Belt and One Road" or new Silk Road project - is a series of roads,
railways, pipelines, hydropower plants and other development projects, being built from the restive Xinjiang
province in China to Gwadar in southwestern Pakistan.The corridor, which came into operation last November,
passes through Gilgit-Baltistan in Pakistan-administered Kashmir - a territory claimed by India. Both the South
Asian neighbours claim the disputed Kashmir region in full, but control parts of it.On January 17, speaking at a
seminar in New Delhi, Prime Minister Narendra Modi said: "Only by respecting the sovereignty of countries
involved, can regional connectivity corridors fulfill their promise and avoid differences and discord." 

The economic corridor is expected to boost Pakistan's

economy [EPA]
By 2050, according to a report by PricewaterhouseCoopers, China is projected to become the world's largest
economy, with a GDP of $58.5 trillion, up from $5.7 trillion in 2010. The country's GDP growth rate has declined
in recent years, however, from 7.3 percent in 2014 to 6.7 percent in 2016.
The CPEC is anticipated to boost Pakistan's economy, where the GDP is expected to grow by more than five
percent by 2020, according to an IMF growth forecast. PricewaterhouseCoopers predicts that
Pakistan's GDP will reach $4.2 trillion by 2050 from the current $988bn.The 3,200km-long corridor is intended
to connect the world's second largest economy, China, with the Middle East and Central Asia, reducing the
alternative sea route distance - via the Malacca Strait - by 10,000km.For Pakistan, the combined value of the
CPEC's infrastructure projects would be equivalent to 17 percent of Pakistan's GDP in 2015, a report by
Deloitte predicted. The report estimated that the economic corridor would create some 700,000 direct jobs
between 2015 and 2030, and add up to 2.5 percent to the country's growth rate.

India reaction on CPEC

The fact that the route passes through the disputed Kashmir region seems to have worried India, which has
about half a million troops stationed in its part of the territory to quell more than two decades of armed rebellion.

"China is using Indian land area illegally occupied by Pakistan," said Seshadri Chari, a national executive
member of the ruling Hindu nationalist Bharatiya Janata Party.

Beijing has been willing to address India's concerns, though. Hua Chunying, China's foreign ministry
spokeswoman, told the media that Beijing is committed to developing friendly and cooperative relations with
others and that CPEC would not affect China's position on Kashmir. 
Chabahar port
In May last year, India's Prime Minister Modi travelled to Iran and announced a deal to develop Chabahar port,
barely 75km from Gwadar. India announced an investment of $500m but the project has been repeatedly
delayed.Many analysts have pointed out that the Chabahar port deal, which also includes Afghanistan, could
be a parallel project to connect with Central Asia and Europe while bypassing Pakistan.

India has committed close to $2bn in development aid to Afghanistan, and it maintains close military
cooperation with Kabul as it seeks to reinforce its geostrategic interest in the region. Chabahar will provide
India with land access to Afghanistan - something Pakistan has denied India for years.

Iran could use Chabahar - about 843 nautical miles from India's commercial hub,
Mumbai - to export more goods to India and the Asia Pacific region.
This would open more investment opportunities to Indian firms, which could gain a foothold in Iran, which is
emerging from years of sanctions. There would alos be benefits for landlocked Afghanistan, which would get
connected to the Gulf, Arabian Sea and Indian Ocean.The Chabahar port will be linked to Zaranj city, in Nimruz
province, Afghanistan, which is connected to a highway built by India in 2009.Small says that Chabahar is
typically billed as an alternative and a rival port to Gwadar, and a counter-play to CPEC, but he points out: "It's
still entirely possible that Chabahar and Gwadar would end up functioning as [a] network."

o Is America against the CPEC?

The China Pakistan Economic Corridor (CPEC) being part of One-Belt-One- Road (OBOR)
initiative, will help materialising China’s ambitions and make it an economic superpower, it
has been a unipolar world for quite a while so it is important to know whether the U.S. is
against these projects, especially since Pakistan has always been a U.S. ally.

The general perception is that Pakistan’s relations with the U.S. will deteriorate due to the
CPEC, U.S. investors have pulled out $71.9 million in the last 11 months whereas U.S.
investment amounted to $197.1 million in the previous year, this is just one of the
indicators of its displeasure, in the Obama years Pakistan-U.S. relations lacked enthusiasm.
Some U.S. foreign policy experts, like the Wilson Center have been predicting an imminent
‘downgrade’ in U.S, relations with Pakistan, and an ‘upgrade’ in relations with India.

As the CPEC’s Gwadar port is one of China’s String of Pearls, this term denotes the naval
bases that it dominates, so it makes sense if the U.S. has been unobtrusively helping India
stir up proxy terror attacks in Balochistan, the Pakistani province where Gwadar is located
and the CPEC has to pass through. The United States put Jamaat-ul-Ahrar on the terror list
in July 2016, it was a faction of the Pakistani Taliban which claimed responsibility for a failed
car bombing in Manhattan, this move made them scatter out of their hideouts in tribal areas
towards Balochistan, which is intrinsic to CPEC.

The U.S. also used a drone strike to target Mullah Mansour of the Afghan Taliban while
visiting Balochistan, this is believed to have been a strategy to sabotage the CPEC, by
contributing to the degradation of security in the province. Daniel Markey states that the
United States is not “opposed to the increased Chinese presence in Pakistan, especially on
the commercial and economic front.” In fact, “US policymakers would very much like China
to help stabilize and grow Pakistan’s economy because they see that economic stability as a
way to reduce security threats. By extension, the United States does not perceive China’s
role in Pakistani infrastructure development as inherently threatening either.”

The U.S has never openly opposed the CPEC, but traditionally it has always tried to contain
China in the South China Sea, its allies in this endeavor have been India, Japan, Indonesia
and Singapore. In September 2016, when asked whether the US and India were working
together against the CPEC, the US State Department Deputy Spokesperson Mark Toner
replied, “I would dismiss it outright. We have a strong bilateral relationship with Pakistan,
but one that is premised on counter-terrorism cooperation and – as part of that
conversation, or that dialogue and that cooperation that we have on counter-terrorism
issues, we made it very clear that Pakistan can’t pick and choose which terrorist groups it
goes after and it has to go after those groups that seek to do harm to its neighbours and
may seek refuge on Pakistani soil.”

Being part of American China containment policy, India has been keenly watching the
progress of CPEC, it is the third major player in this Geo-strategic region, it views the
Chinese economic venture as a mega-scale naval mobilization program that threatens its
security and puts global sea lanes at risk. The fact that the CPEC gives China access to the
Indian Ocean is India’s biggest fear, it feels Pakistan and China have become a joint threat
and their aim is to encircle and contain India.

China increased its investment even more at this point to cover the loss as other investors
pulled out, it offset the decrease in investments from the rest of the world. The CPEC has
global trade implications, Pakistan must secure its strategic and economic interests and
learn how to balance the two major powers, U.S. and China, without upsetting the apple
cart. In this scenario, Pakistan emerges as a major player that can balance superpower
rivalries and promote trade co-operation. In reality, the United States and China are co-
dependent on each other as far as business is concerned.

Christine Lagarde from the IMF recently said, “ This is an important time—“a moment of
opportunity”—for Pakistan, a country undergoing an economic transformation that can place
it well among the ranks of emerging market economies.” Since a couple of years, there has
been very negative coverage of theCPEC in local media, as well as Indian and Western
media, calling it a non-starter and trying to pick flaws in the project. Disproving all the
propaganda, Gwadar port has now been formally inaugurated by the Pakistani PM Nawaz
Sharif, the first convoy of goods made its way across the 3000 km land route to Gwadar
port from the Chinese border and 300 containers were sent by ship to Africa. The CPEC is
now officially open for business, and by the end of this year and early next year, the first
phase of infrastructure projects will be complete.

As another perspective, in the last 13 years, the U.S. gave Pakistan about $10.5 billion in
economic assistance, $7.6 billion in security-related aid, and $13 billion in counter-terrorism
support, even recently the U.S. Senate passed $1.1 billion under the Security Enhancement
Act on account of mutual strategic partnership, but somehow it never took interest in
building dams, power plants, roads, bridges or ports. The United States could plan on a
similar pattern to that of China and help put Pakistan on the road to financial security and
political stability, it could direct some civilian assistance into CPEC-aligned projects such as
improving Pakistan’s national power grid.

Americans have been very busy with elections recently, the U.S. foreign policy received far
less attention during the electioneering cycle than ever before. Trump’s unexpected win has
brought about a spate of protests by Hillary fans even though two terms of Trump were
predicted a year ago, he happens to represent the American blue collar, working class that
felt ignored and beaten down for decades and had not been voting since several elections
now, Clinton had nothing substantial to offer them. U.S. foreign policy mostly stays the
same but Trump is all for ending the wars and concentrating on America for a change, he
might concentrate more on the economy than global wars that have deprived America, it is
hoped being a businessman he might favour joining CPEC related projects in the future.