China–Pakistan Economic Corridor

China–Pakistan Economic Corridor (CPEC) (Chinese: 中巴经

济走廊 ; pinyin: Zhōng bā jīngjì zǒuláng; Urdu: ‫چین پاکستان‬
China–Pakistan Economic
Corridor
‫ )اقتصادی راہداری‬is a 3000 km Chinese infrastructure network
project undertaken in Pakistan.[8] This sea-and-land-based corridor
is aimed to secure and reduce the passage for China's energy
imports[8] from the Middle East by avoiding the existing route
from the Straits of Malacca between Malaysia and Indonesia,
which in case of war could be blocked and thus hampering the
Chinese energy dependent economic avenues.[1][9][10] Developing
a deep water port at Gwadar in the Arabian Sea and a well built
road and rail line from this port to Xinjiang Province in western
China would be a shortcut for boosting the trade between Europe
and China.[1][9] In Pakistan, it aims to overcome an electricity Mission Securing Energy
shortfall, infrastructural development and modernize transportation statement Import and Trade
networks. Along with shifting it from an agricultural based Boost for China,[1]
economic structure to industrial based.[11] Infrastructure
Development for
CPEC's potential impact on Pakistan has been compared to that of
Pakistan[1]
the Marshall Plan undertaken by the United States in post-war
Europe.[12][13][14][15] Pakistani officials predict that CPEC will Type of Economic corridor
result in the creation of upwards of 2.3 million jobs between 2015 project
and 2030, and add 2 to 2.5 percentage points to the country's Location Pakistan: Khyber
annual economic growth.[16] As of 2022, it has enhanced Pakhtunkhwa, Gilgit-
Pakistan's exports and development capacity and is providing 1/4th
Baltistan, Punjab,
of total electricity.[17]
Balochistan, Sindh &
It is also seen as addressing a national security issue for China by Azad Kashmir
economic development of the Xinjiang region thus reducing China: Xinjiang
militant influence on Muslim separatists of native Country China
Uyghurs.[1][9][10][18] After the proposal from Chinese President Li Pakistan
Keqiang in 2013,[8] the preliminary study on this project was done
Established 20 April 2015[2]
in 2014 which acknowledged the hostile environment and
complicated geographic conditions but prioritized the importance Budget China Development
of having a China-run port near the Gulf of Oman which serves as Bank
an important route for oil tankers.[19] Once this corridor is Asian Infrastructure
functional, the existing 12,000 km journey of oil transportation to Investment Bank
China will be reduced to just 2,395 km.[20] This is estimated to Silk Road Fund
save China $2 billion per year.[21] China had already acquired Exim Bank of China
control of Gwadar Port on 16 May 2013.[19] Originally valued at Industrial and
$46 billion, the value of CPEC projects was worth $62 billion as Commercial Bank of
of 2020.[22] In 2022, the Chinese investment in Pakistan rose to China
$65 billion.[23] China refers to this project as the revival of the Silk
Status A few projects
Road.[24] CPEC envisages rapidly upgrading Pakistan's required
operational
Special Economic
infrastructure and thereby strengthening its economy to an extent Zones Under
by constructing modern transportation networks, numerous energy construction
projects, and special economic zones.[25][26][27][28] (2020).[4][5]
Many projects
The potential industries being set up in the CPEC special
running behind the
economic zones include food processing, cooking oil, ceramics,
gems and jewelry, marble, minerals, agriculture machinery, iron schedule (2022)[6]
and steel, motorbike assembling, electrical appliances and Few projects
automobile[29] cancelled.[7]
Website cpec.gov.pk (http://c
Even though China and Pakistan signed the official MoUs in pec.gov.pk)
2015, the first details of long-term plan under CPEC were publicly
disclosed in 2017 when a Pakistani media outlet revealed its access to the Original Documents.[30]

According to the World Bank researchers,"Chinese lenders require strict confidentiality from their debtors
and do not release a granular breakdown of their lending."[31][32] In 2015, the Governor of Central Bank in
Pakistan, Ashraf Mahmood Wathra said, "I don't know out of $46 billion, how much is debt, how much is
equity and how much is in kind"[33] and did not know what the debt implications of CPEC actually
were.[34]

Since early 1990s, the IMF has provided more than a dozen bailouts on requests by Pakistan to save its
dwindling economy, which has struggled for 22 of the 30 years to meet the austerity measures demanded
by IMF. Nadeem-ul-Haque, a former IMF official and former deputy chairman of the Pakistani
government's Planning Commission wrote, "The pattern is always the same, with the Fund’s blessing, the
government goes on a shopping spree, taking out costly loans for expensive projects, thus building up even
more debt and adding new inefficiencies. After a few years, another crisis ensues, and it is met by another
IMF program."[35] The Pakistani establishment sees Chinese loans as an alternative to IMF loans.[31]
Should the initial $46 billion worth of projects be implemented, the value of those projects would be
roughly equivalent to all foreign direct investment in Pakistan since 1970,[36] and would be equal to 17%
of Pakistan's 2015 gross domestic product.[37] CPEC is seen as the main plank of China's Belt and Road
Initiative.[38]

Chinese monetary offer for Pakistan under CPEC being a combination of Debt & Equity, it is evaluated
that the Debt component will be serviced at 7%-8% interest per annum while Equity component is expected
to deliver an estimated ROE of 17% per annum. The Pakistan government, however, claims that the
Chinese loans will be repaid over 20–25 years at rate of 2% interest.[39] Pakistan has already started
negotiating the debt-relief from China owing to difficulties to repay the loan and is seeking ease in the
payment obligations towards debt and its interest for the projects under CPEC.[40] As of 2022, Pakistan
owes China about $30 billion which accounts for nearly 30% of its foreign debt.[41]

Since 2021, due to the growing pressure on China for being the world's biggest polluter, it has shifted its
focus from coal based energy investments in Pakistan to renewables. This is done to promote a more
"greener" image of CPEC.[42] In June 2022, the Karot Hydropower started commercial operations to
provide cheap and clean electricity, and aims to reduce 3.5 million metric tons of carbon emissions
annually.[43]

History

Background
Plans for a corridor stretching from the Chinese border to Pakistan's deepwater ports on the Arabian Sea
date back to the 1950s, and motivated construction of the Karakoram Highway beginning in 1959.[44]
Chinese interest in Pakistan's deep-water harbor at Gwadar had been rekindled by in 2002 China began
construction at Gwadar port which was completed in 2006. Expansion of Gwadar Port then ceased
thereafter owing to political instability in Pakistan following the fall of General Pervez Musharraf and
subsequent conflict between the Pakistani state and Taliban militants.[45]

In 2013, the then Pakistani President Asif Ali Zardari and Chinese Premier Li Keqiang decided to further
enhance mutual connectivity.[46] A memorandum of understanding on cooperation for long-term plan on
China–Pakistan Economic Corridor between the two governments was inked by Xu Shao Shi and Shahid
Amjad Chaudhry.[47]

In February 2014, Pakistani President Mamnoon Hussain visited China to discuss the plans for an
economic corridor in Pakistan.[48] Two months later, Pakistan Prime Minister Nawaz Sharif met with
Premier Li Kequiang in China to discuss further plans,[49] resulting in the full scope of the project to be
devised under Sharif's tenure.[50] In November 2014, Chinese government announced its intention to
finance Chinese companies as part of its $45.6 billion energy and infrastructure projects in Pakistan as part
of CPEC.

Announcement of CPEC

Chinese President Xi Jinping on his “fate-changing visit” to Pakistan for signing the CPEC agreement
stated “I feel as if I am going to visit the home of my brother,”[51] and claimed that friendship between the
two nations was “higher than mountains, deeper than oceans and sweeter than honey”.[1] China repeatedly
uses terms like "iron brothers" and "all weather friends" while describing its relation with Pakistan.[52] On
20 April 2015, Pakistan and China signed an agreement to commence work on the $46 billion agreement,
which is roughly 20% of Pakistan's annual GDP,[53] with approximately $28 billion worth of fast-tracked
"Early Harvest" projects to be developed by the end of 2018.[54][55]

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 3.55% of the country's annual GDP.[56] 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.[57] A 1,100-kilometre-long
motorway will be built between the cities of Karachi and Lahore as part of CPEC,[58] while the Karakoram
Highway from Hasan Abdal to the Chinese border will be completely reconstructed and overhauled.[36]
The currently stalled Karachi–Peshawar main railway line will also be upgraded to allow for train travel at
up to 160 km per hour by December 2019.[59][60] Pakistan's railway network will also be extended to
eventually connect to China's Southern Xinjiang Railway in Kashgar.[61] The estimated $11 billion
required to modernise transportation networks will be financed by subsidized concessionary loans.[62]

Over $33 billion worth of energy infrastructure are to be constructed by private consortia to help alleviate
Pakistan's chronic energy shortages,[63] which regularly amount to over 4,500MW,[64] and have shed an
estimated 2–2.5% off Pakistan's annual gross domestic product.[65] Over 10,400 MW of 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.[66] 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.[67] 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.[68]
Should the initial $46 billion worth of projects be implemented, the value of those projects would be
roughly equivalent to all foreign direct investment in Pakistan since 1970,[36] and would be equal to 17%
of Pakistan's 2015 gross domestic product.[37] CPEC is seen as the main plank of China's Belt and Road
Initiative.[38] At the beginning of this project, Pakistan has assigned about 10,000 troops to protect the
Chinese investments.[10] However, this number increased to 15,000 actively deployed troops by 2016.

Subsequent developments

On 12 August 2015 in the city of Karamay, China and Pakistan signed 20 more agreements worth
$1.6 billion to further augment the scale and scope of CPEC.[69] Details of the plan are opaque,[70] but are
said to mainly focus on increasing energy generation capacity.[71] As part of the agreement, Pakistan and
China have agreed to co-operate in the field of space research.[72]

In September and October 2015, the government of the United Kingdom announced two separate grants to
the Government of Pakistan for construction of roadways that are complementary to CPEC.[73][74] In
November 2015, China included the CPEC into its 13th five-year development plan,[75] while in
December 2015, China and Pakistan agreed on a further $1.5 billion investment to set up an information
and technology park as part of the CPEC project.[76] On 8 April 2016, during the visit of Xinjiang's
Communist Party chief Zhang Chunxian companies from Xinjiang with their Pakistan counterparts signed
$2 billion of additional agreements covering infrastructure, solar power and logistics.[77]

The first convoy from China arrived in Gwadar on 13 November 2016, thereby formalizing operation of
CPEC.[78] On 2 December 2016, the first cargo train, launching the direct rail route and sea freight service
between China and Pakistan, departed from Yunnan. A cargo train loaded with 500 tonnes of commodities
left Kunming for the port city of Guangzhou from where the cargo will be loaded on ships and transported
to Karachi, marking the opening of the new route.[79] The new rail, sea freight will cut logistics cost,
including that of transport, by 50 per cent.[80]

In November 2016, China announced an additional $8.5 billion investment in Pakistan with $4.5 billion
allocated to upgrade Pakistan's main railway line from Karachi to Peshawar including tracks, speed, and
signaling, and $4 billion toward an LNG terminal and transmission lines to help alleviate energy
shortages.[81] In February 2017, the Egyptian Ambassador to Pakistan expressed interest in CPEC
cooperation.[82] In January 2017, Chief Minister Pervez Khattak of Khyber Pakhtunkhwa stated that he
had received assurances from Chinese investment companies that they would invest up to $20 billion for
projects.[83] In March 2017, an agreement was signed for the projects, which include: a $1.5 billion oil
refinery, irrigation projects worth $2 billion, a $2 billion motorway between Chitral and DI Khan, and $7
billion worth of hydro-electric projects.[84]

As of September 2017, more than $14 billion worth of projects were under construction.[38] In March
2018, Pakistan announced that following the completion of under-construction energy projects, future
CPEC energy projects would be geared towards hydropower projects.[85]

In 2022, Federal Minister for Planning, Development and Special Initiatives Prof. Ahsan Iqbal criticized
CPEC authority for its inability to attract investments and called for its dissolution.[86] On 17 August 2022,
Prime Minister Shehbaz Sharif approved, in principle, to abolish the China–Pakistan Economic Corridor
(CPEC) Authority subject to consent by China.[87]

Projects in Gwadar Port and City

Gwadar came in the focus of attention post the Kargil War when
Pakistan felt the need of having a military naval port and the
Karachi-Gwadar Road (Coastal Highway) was built for defence
purpose.[88] Gwadar forms the crux of the CPEC project, as it is
envisaged to be the link between China's ambitious One Belt, One
Road project, and its 21st Century Maritime Silk Road project.[89]
In total, more than $1 billion worth of projects are to be developed
around the port of Gwadar by December 2017.
A view of the Gwadar Promontory
As of 2022, only three China–Pakistan Economic Corridor projects and isthmus
- $4 million Gwadar Smart Port City Master Plan, $300 million
Physical Infrastructure of Gwadar Port and the Free Zone Phase-1,
and a $10 million Pak-China Technical and Vocational Institute - in Gwadar were declared completed
whereas one-dozen projects worth nearly $2 billion remain undeveloped including water supply, electricity
provision, expressway, international airport, fishing harbour and hospital among others.[90]

China has provided a total of 7,000 sets of solar panels for households in Gwadar over the past two years.
Another 10,000 sets of solar panels are under active preparation and will be allocated to poor people in
Balochistan. The Chinese Embassy in Pakistan is also to donate household solar units and other assistance
to the people of Balochistan.[17]

Gwadar Port Complex

Initial infrastructure works at Gwadar Port commenced in 2002 and were completed in 2007,[45] however
plans to upgrade and expand Gwadar's port stalled. Under CPEC agreement, Gwadar Port will initially be
expanded and upgraded to allow for docking of larger ships with deadweight tonnage of up to 70,000.[91]
Improvement plans also include construction of a $130 million breakwater around the port,[92] as well as
the construction of a floating liquefied natural gas facility that will have a capacity of 500 million cubic feet
of liquefied natural gas per day and will be connected to the Gwadar-Nawabshah segment of the Iran–
Pakistan gas pipeline.[93]

The expanded port is located near a 2,282-acre free trade area in Gwadar which is being modeled on the
lines of the Special Economic Zones of China.[94] The swathe of land was handed to the China Overseas
Port Holding Company in November 2015 as part of a 43-year lease.[95] The site will include
manufacturing zones, logistics hubs, warehouses, and display centres.[96] Businesses located in the zone
would be exempt from customs authorities as well as many provincial and federal taxes.[91] Business
established in the special economic zone will be exempt from Pakistani income, sales, and federal excise
taxes for 23 years.[97] Contractors and subcontractors associated with China Overseas Port Holding
Company will be exempted from such taxes for 20 years,[98] while a 40-year tax holiday will be granted
for imports of equipment, materials, plant/machinery, appliances, and accessories that are to be for
construction of Gwadar Port and special economic zone.[99]

The special economic zone will be completed in three phases. By 2025, it is envisaged that manufacturing
and processing industries will be developed, while further expansion of the zone is intended to be complete
by 2030.[45] On 10 April 2016, Zhang Baozhong, chairman of China Overseas Port Holding Company
said in a conversation with The Washington Post that his company planned to spend $4.5 billion on roads,
power, hotels and other infrastructure for the industrial zone as well as other projects in Gwadar city.[16]

Projects in Gwadar city

China will grant Pakistan $230 million to construct a new international airport in Gwadar.[100] The
provincial government of Balochistan has set aside 4000 acres for the construction of the new $230 million
Gwadar International Airport which will require an estimated 30 months for construction,[101] the costs of
which are to be fully funded by grants from the Chinese government which Pakistan will not be obliged to
repay.[102]

The city of Gwadar is further being developed by the construction of a 300 MW coal power plant, a
desalinization plant, and a new 300-bed hospital to be completed in 2023.[103] Plans for Gwadar city also
include construction of the Gwadar East Bay Expressway – a 19 kilometre controlled-access road that will
connect Gwadar Port to the Makran Coastal Highway.[104] These additional projects are estimated to cost
$800 million, and are to be financed by 0% interest loans extended by the Exim Bank of China to
Pakistan.[103]

In addition to the aforementioned infrastructure works, the Pakistani government announced in September
2015 its intention to establish a training institute named Pak-China Technical and Vocational Institute at
Gwadar,[45] which is to be developed by the Gwadar Port Authority at the cost of 943 million rupees,[45]
and is designed to impart to residents the skills required to operate and work at the expanded Gwadar
Port.[45]

As of 2017, in total there are 9 projects funded by China in and around Gwadar.[105]

Development of Gwadar includes the building of a hospital under a Chinese government grant. Under the
proposed project medical blocks, nursing and paramedical institutes, medical college, central laboratory,
and other allied facilities are to be constructed with the supply of medical equipment and machinery.[106]

In 2020, Government released funds of Rs 320 million for a seawater desalination plant at Gwadar, with a
capacity of five million gallons a day. The funds were also to be used in the expansion of the optical fiber
network in Gwadar.[107] and construction of a fish landing jetty.[108]

Roadway projects
The CPEC project envisages major upgrades and overhauls to
Pakistan's transportation infrastructure. Under the CPEC project,
China has announced financing for $10.63 billion worth of
transportation infrastructure so far; $6.1 billion have been allocated
for constructing "Early Harvest" roadway projects at an interest rate
of 1.6 percent.[109] The remainder of funds will be allocated when
the Pakistani government awards contracts for the construction of
road segments which are still in the planning phase.

Three corridors have been identified for cargo transport: the Eastern The CPEC roadway network
Alignment through the heavily populated provinces of Sindh and
Punjab where most industries are located, the Western Alignment
through the less developed and more sparsely populated provinces
of Khyber Pakhtunkhwa and Balochistan, and the future Central
Alignment which will pass through Khyber Pakhtunkhwa, Punjab,
and Balochistan.[110]

Karakoram Highway
The CPEC projects call for reconstruction and upgrade works on
National Highway 35 (N-35), which forms the Pakistani portion of
the Karakoram Highway (KKH). The KKH spans the 887-
kilometer long distance between the China-Pakistan border and the
town of Burhan, near Hasan Abdal. At Burhan, the existing M1
motorway will intersect the N-35 at the Shah Maqsood Interchange.
From there, access onwards to Islamabad and Lahore continues as
part of the existing M1 and M2 motorways. Burhan will also be at
the intersection of the Eastern Alignment, and Western Alignment.
Highlighted in red is the route of
Upgrades to the 487-kilometer long section between Burhan and National Highway 35, which is to be
Raikot of the Karakoram Highway are officially referred to in completely rebuilt and upgraded
Pakistan as the Karakoram Highway Phase 2 project. At the under the CPEC agreement.
southern end of the N-35, works are already underway to construct Highlighted in blue is the 175-
a 59-kilometer-long, 4-lane controlled-access highway between kilometer road between Gilgit and
Burhan and Havelian which upon completion will be officially Skardu which is to be upgraded to a
referred to as the E-35 expressway.[111] North of Havelian, the next 4-lane highway.
66 kilometres of road will be upgraded to a 4-lane dual carriageway
between Havelian and Shinkiari.[112] Groundbreaking on this
portion commenced in April 2016.[113]

The entire 354 kilometres of roadway north of Shinkiari and ending

in Raikot, near Chilas will be constructed as a 2-lane highway.[113]
Construction on the first section between Shinkiari and Thakot
commenced in April 2016 jointly with construction of the Havelian
to Shinkiari 4-lane dual carriageway further south.[114]
Construction on both these sections is expected to be completed
with 42 months at a cost of approximately $1.26 billion with 90% China and Pakistan already conduct
of funding to come from China's EXIM bank in the form of low trade via the Karakoram Highway.
interest rate concessional loans.[114][115][116]

Between Thakot and Raikot spans an area in which the government of Pakistan is currently either planning
or actively constructing several hydropower projects, most notably the Diamer-Bhasha Dam and Dasu
Dam. Sections of the N-35 around these projects will be completely rebuilt in tandem with dam
construction.[117] In the interim, this section of the N-35 is currently being upgraded from its current state
until dam construction commences in full force at a later date. Improvement projects on this section are
expected to be completed by January 2017 at a cost of approximately $72 million.[118][119] The next 335
kilometres of roadway connect Raikot to the China-Pakistan border. Reconstruction works on this section
of roadway preceded the CPEC, and were initiated after severe damage to roadways in the area following
the 2010 Pakistan floods. Most of this section of roadway was completed in September 2012 at a cost of
$510 million.[120]

A large earthquake rocked the region nearest to the China-Pakistan border in 2010, triggering massive
landslides that dammed the Indus River, resulting in the formation of the Attabad Lake. Portions of the
Karakoram Highway were submerged in the lake, forcing all vehicular traffic onto barges to traverse the
new reservoir. Construction on a 24 kilometer series of bridges and tunnels to Attabad Lake began in 2012
and required 36 months for completion. The bypass consists of 2 large bridges and 5 kilometres worth of
tunnels that were inaugurated for public use on 14 September 2015 at a cost of $275 million.[121][122] The
175 kilometre road between Gilgit and Skardu will be upgraded to a 4-lane road at a cost of $475 million to
provide direct access to Skardu from the N-35.[123][124]

Eastern Alignment

The term Eastern Alignment of CPEC refers to roadway projects located in Sindh and Punjab provinces –
some of which were first envisioned in 1991.[125] As part of the Eastern Alignment, a 1,152 km long
motorway will connect Pakistan's two largest cities, Karachi and Lahore with 6-lane controlled access
highway designed for travel speeds up to 120 kilometres per hour.[126] The entire project will cost
approximately $6.6 billion, with the bulk of financing to be distributed by various Chinese state-owned
banks.[127]

The entire Eastern Alignment motorway project is divided into four sections: a 136-kilometer long section
between Karachi and Hyderabad also known as the M9 motorway, a 345-kilometer long section between
Hyderabad and Sukkur, a 392-kilometer long section between Sukkur, and Multan,[128] and a 333-
kilometer section between Multan and Lahore via the town of Abdul Hakeem.[129]

The first section of the project is providing high-speed road access from the Port of Karachi to the city of
Hyderabad and interior Sindh. Upgrade and construction works on this section currently known as Super
Highway between Karachi and Hyderabad began in March 2015, and will convert the road into the 4-lane
controlled access M9 Motorway which was completed in an estimated 30 months.[130] In February 2017, a
completed 75 kilometer stretch of the motorway was opened for public use by Prime Minister Nawaz
Sharif.[131]

At the terminus of the M9 motorway in Hyderabad, the Karachi-Lahore Motorway will continue onwards
to Sukkur as a six-lane controlled-access motorway known also as M6 motorway that will be 345
kilometers long,[128] The planned cost for this project is $1.7 billion,[132] and will provide high-speed road
access to interior Sindh – especially near the towns of Matiari, Nawabshah, and Khairpur. The project will
require the construction of seven interchanges, and 25 bridges on the Indus river and irrigation canals.[133]
The planned route of the motorway runs roughly parallel to the existing National Highway and Indus
Highway at various portions. In July 2016, the Pakistani government announced that the project would be
open to international bidders on a build-operate-transfer basis, with Chinese and South Korean companies
expressing interest in the project.[132]

The 392 kilometers Sukkur to Multan section of the motorway is estimated to cost $2.89 billion,[126] with
construction works inaugurated on this section of roadway on 6 May 2016 and completed in September
2019. .[134] The road will be a six lane wide controlled access highway,[135] with 11 planned interchanges,
10 rest facilities, 492 underpasses, and 54 bridges along its route.[134] The Pakistani government in January
2016 awarded the contract to build this section to China State Construction Engineering,[126] but final
approvals required for disbursement of funds were not granted by the Government of the People's Republic
of China until May 2016.[116][126] 90% of the project's cost is to be financed by concessionary loans from
China, with the remaining 10% to be financed by the government of Pakistan.[136] Construction on this
segment is expected to last 36 months.[126]

Construction of the portion between Multan and Lahore costing approximately $1.5 billion[137] was
launched in November 2015[138] as a joint venture between the China Railway Construction Corporation
Limited and Pakistan's Zahir Khan and Brothers Engineers[139] The total length of this motorway section is
333 kilometres; however, the first 102 kilometres of the road between Khanewal and Abdul Hakeem is
designed as part of the M4 Motorway, and is being funded by the Asian Development Bank.[140][141] The
portion of motorway between Abdul Hakeem and Lahore that is under construction as part of CPEC will
consist of the remaining 231 kilometers.[142]

Western Alignment

The CPEC project envisages an expanded and upgraded road

network in the Pakistani provinces of Balochistan, Khyber
Pakhtunkhwa, and western Punjab Province as part of the Western
Alignment. The Western Alignment project will result in the
upgrading of several hundred kilometers worth of road into 2 and 4-
lane divided highways by mid-2018, with land acquisition sufficient
for upgrading parts of the road to a 6-lane motorway in the
future.[143] In total, the CPEC project envisages reconstruction of
870 kilometers of road in Balochistan province alone as part of the
Western Alignment. Of those 870 kilometers of road, 620
kilometers have already been rebuilt as of January 2016.[144]
The Western Alignment of CPEC is
The Western Alignment roadway network will begin at the depicted by the red line. The 1,153-
Barahma Bahtar Interchange on the M1 Motorway near the towns kilometer route will link the Brahma
of Burhan and Hasan Abdal in northern Punjab province.[145] The Bahtar Interchange of the M1
newly reconstructed Karakoram Highway will connect to the Motorway with the city of Gwadar in
Balochistan province. The portion
Western Alignment at Burhan, near where the new 285-kilometre-
depicted by the orange line between
long controlled-access Brahma Bahtar-Yarik Motorway will
Basima and Shahdadkot is
commence.[146] The motorway will terminate near the town of
sometimes regarded as part of the
Yarik, just north of Dera Ismail Khan.[147] Groundbreaking for the Western Alignment.
project took place on 17 May 2016.[148] The motorway will
traverse the Sindh Sagar Doab region, and cross the Indus River at
Mianwali before entering into Khyber Pakhtunkhwa province. It
will consist of 11 interchanges, 74 culverts, and 3 major bridges
spanning the Indus, Soan, and Kurram Rivers.[149] Total costs for
the project are expected to be $1.05 billion.[150]

At the southern terminus of the new Brahma Bahtar-Yarik

motorway, the N50 National Highway will also be upgraded
between Dera Ismail Khan in Khyber Pakhtunkhwa and Zhob in
neighbouring Balochistan province, with eventual reconstruction
between Zhob and Quetta.[151] The upgraded roadway will consist
of a 4 lane dual-carriageway spanning the 205 kilometre distance
between the two cities.[152] The first portion of the N50 to be upgraded will be the 81 kilometre portion of
the N50 between Zhob and Mughal Kot, with construction works having begun in January 2016.[153]
Construction on this portion is expected to be completed by 2018 at a cost of $86 million.[151] While the
project is considered a vital link in the CPEC's Western Alignment,[153] the project's cost will not be
financed by Chinese state-owned banks, but instead by Asian Development Bank under a 2014 agreement
which preceded CPEC,[154][155] as well as by a grant provided by the United Kingdom's Department for
International Development.[156]

Heading south from Quetta, the Western Alignment of the CPEC will continue to the town of Surab in
central Balochistan as the N25 National Highway. From Surab, a 470 kilometre long route known as the
N85 National Highway will connect central Balochistan with the town of Hoshab in southwestern
Balochistan province near the city of Turbat. The stretch of road between these cities was completed in
December 2016,[157] as per schedule.[158]

Along the Western Alignment route, the towns of Hoshab and Gwadar are connected by a newly built 193-
kilometer-long portion of the M8 Motorway – the Hoshab to Gwadar portion of the motorway was
completed and inaugurated in February 2016 by Prime Minister Nawaz Sharif.[159] The Western
Alignment will be flanked by special economic zones along its route,[160] with at least seven special
economic zones planned to be established in Khyber Pakhtunkhwa.[143]

Central Alignment

Long-term plans for a "Central Alignment" of the CPEC consist of a network of roads which is shortest
route of CPEC and will commence in Gwadar and travel upcountry via the cities of Basima, Khuzdar,
Sukkur, Rajanpur, Layyah, Muzaffargarh, and terminating in Dera Ismail Khan, with onward connections
to Karakoram Highway via the Brahma Bahtar–Yarik Motorway.[161]

Associated roadway projects

ADB funded projects

The 184 kilometers long M-4 Motorway between Faisalabad and Multan does not fall under the scope of
CPEC projects but is nevertheless considered vital to the CPEC transportation project. It will instead be
financed by the Asian Development Bank and the Asian Infrastructure Investment Bank,[140] and will be
the first project jointly financed by those banks.[162] Further funding comes from an additional $90.7
million grant announced in October 2015 by the government of the United Kingdom towards the
construction of a portion of the M4 Motorway project.[163]

The Karakoram Highway south of the city of Mansehra will also be upgraded into a controlled-access
highway to officially be known as the E-35 expressway. While it is considered to be a crucial part of the
route between Gwadar and China, the E35 will not be financed by CPEC funds. The project will instead
be financed by the Asian Development Bank[164] with a $121.6 million grant from the United Kingdom
towards the project.[165] Once completed, the E35 Expressway, the M4 Motorway, and Karachi-Lahore
Motorway will provide continuous high-speed road travel on controlled-access motorways from Mansehra
to Karachi – 1,550 kilometers away.

Approximately halfway between Zhob and Quetta, the town of Qilla Saifullah in Balochistan lies at the
intersection of the N50 National Highway and the N70 National Highway. The two roads form the 447-
kilometer route between Quetta and Multan in southern Punjab. While the N70 project is not officially a
part of CPEC, it will connect the CPEC's Western Alignment to the Karachi-Lahore Motorway at Multan.
Reconstruction works on the 126 kilometre portion of the N70 between Qilla Saifullah and Wagum are
slated for completion by 2018,[166] and are financed as part of a $195 million package by the Asian
Development Bank,[155] and by a $72.4 million grant from the United Kingdom's Department for
International Development.[156]

Railway projects
The CPEC project emphasises major upgrades to Pakistan's aging railway system, including rebuilding of
the entire Main Line 1 railway between Karachi and Peshawar by 2020;[167] this single railway currently
handles 70% of Pakistan Railways traffic.[168] As of 25.05.2022 this project is in doldrums due to
reluctance of China to provide funds.[169] In addition to the stalled
Main Line 1 railway, upgrades and expansions are slated for the
Main Line 2 railway, Main Line 3 railway. The CPEC plan also
calls for completion of a rail link over the 4,693-meter high
Khunjerab Pass. The railway will provide direct access for Chinese
and East Asian goods to Pakistani seaports at Karachi and Gwadar
by 2030.[168]

Procurement of an initial 250 new passenger coaches, and

reconstruction of 21 train stations are also planned as part of the first
phase of the project – bringing the total investment in Pakistan's Phase 1 of the ML-1 overhaul and
reconstruction is highlighted black
railway system to approximately $5 billion by the end of 2019.[170]
between Peshawar and Lahore.
180 of the coaches are to be built at the Pakistan Railways Carriage
Overhauling and reconstruction of
Factory near Islamabad,[171] while the Government of Pakistan
the line will allow trains to travel at
intends to procure an additional 800 coaches at a later date, with the up to 160 kilometres per hour.
intention of building 595 of those coaches in Pakistan.[171]

In September 2018, the new government led by Prime Minister

Imran Khan reduced the Chinese investment in railways by $2
billion to $6.2 billion because of financing burdens.[172]

Main Line 1

The CPEC "Early Harvest" plan includes a complete overhaul of

the 1,687 kilometre long Main Line 1 railway (ML-1) between
Karachi and Peshawar. The plan was initial floated in 2015,[173] Phase 2 of the ML-1 overhaul
however as of January 2023 construction has not started on the between Multan and Hyderabad is
project, with funding only secured in November 2022.[174] The marked in orange. Phase 3 of the
total costs of the project are estimated to be US$8.2 billion.[175] project is indicated by the green line
between Hyderabad and Karachi.
The upgrade plan involves doubling the track from Karachi to
Peshawar, providing grade separation, as well as communications-
based train control;[176] this will allow increased capacity and faster trains on the line.[177]

Main Line 2

In addition to upgrading the ML-1, the CPEC project also calls for
similar major upgrade on the 1,254 kilometre long Main Line 2
(ML-2) railway between Kotri in Sindh province, and Attock in
northern Punjab province via the cities of Larkana and Dera Ghazi
Khan.[178] The route towards northern Pakistan roughly parallels
the Indus River, as opposed to the ML-1 which takes a more
eastward course towards Lahore. The project also includes a plan to
connect Gwadar, to the town of Jacobabad, Sindh[179] which lies at
the intersection of the ML-2 and ML-3 railways.
ML-2 of Pakistan Railways is
marked in purple, while ML-3 is
Main Line 3
marked in orange. Other lines are in
blue.
Medium term plans for the Main Line 3 (ML-3) railway line will also include construction of a 560
kilometer long railway line between Bostan near Quetta, to Kotla Jam in Bhakkar District near the city of
Dera Ismail Khan,[180] which will provide access to southern Afghanistan. The railway route will pass
through the city of Quetta and Zhob before terminating in Kotla Jam, and is expected to be constructed by
2025.[168]

Khunjerab Railway

Longer-term projects under CPEC also call for construction of the

682 kilometre long Khunjerab Railway line between the city of
Havelian, to the Khunjerab Pass on the Chinese border,[180] with
extension to China's Lanxin Railway in Kashgar, Xinjiang. The
railway will roughly parallel the Karakoram Highway, and is
expected to be complete in 2030.[168]
The proposed route of the Khunjerab
The cost of the entire project is estimated to be approximately
Railway is indicated by the brown
$12 billion, and will require 5 years for completion. A 300 million
line.
rupee study to establish final feasibility of constructing the rail line
between Havelian and the Chinese border is already underway.[181]
A preliminary feasibility study was completed in 2008 by the Austrian engineering firm TBAC.[182]

Lahore Metro

The $1.6 billion Orange Line of the Lahore Metro is regarded as a commercial project under CPEC.[183]
Construction on the line has already begun, with initial planned completion by Winter 2017 however this
has been delayed several times, first to end of 2018,[184][185] later to 2019 and 2020. It finally launched on
25 October 2020.[186] The line will be 27.1-kilometre (16.8 mi) long, of which 25.4 kilometres (15.8 mi)
will be elevated, with the remaining portion to be underground between Jain Mandir and Lakshmi
Chowk.[187] When complete, the project will have the capacity to transport 250,000 commuters per day,
with plans to increase capacity to 500,000 commuters per day by 2025.[188]

Energy sector projects

Pakistan's current energy generating capacity is 24,830 MW,.[189] Energy generation will be a major focus
of the CPEC project, with approximately $33 billion expected to be invested in this sector.[63] An estimated
10,400 MW of electricity are slated for generation by March 2018 as part of CPEC's "Early Harvest"
projects.[66]

The energy projects under CPEC will be constructed by private Independent Power Producers, rather than
by the governments of either China or Pakistan.[190] The Exim Bank of China will finance these private
investments at 5–6% interest rates, while the government of Pakistan will be contractually obliged to
purchase electricity from those firms at pre-negotiated rates.[191] In April 2020, hit by the COVID-19
pandemic, Pakistan asked China to ease repayment terms on $30bn worth of power projects.[192][193]

Renewable-energy
In March 2018, Pakistan announced that hydropower projects would be prioritized following the
completion of under-construction power plants.[85] Pakistan aims to produce 25% of its electricity
requirements by renewable energy resources by 2030.[194] China's Zonergy company will complete
construction on the world's largest solar power plant – the 6,500 acre Quaid-e-Azam Solar Park near the
city of Bahawalpur with an estimated capacity of 1000 MW is expected to be completed in December
2016.[195][196] The first phase of the project has been completed by Xinjiang SunOasis, and has a
generating capacity of 100 MW.[197] The remaining 900 MW capacity will be installed by Zonergy under
CPEC.[197]

The Jhimpir Wind Power Plant, built by the Turkish company Zorlu Enerji has already begun to sell 56.4
MW of electricity to the government of Pakistan,[198] though under CPEC, another 250 MW of electricity
are to be produced by the Chinese-Pakistan consortium United Energy Pakistan and others at a cost of
$659 million.[199][200] Another wind farm, the Dawood wind power project is under development by
HydroChina (https://web.archive.org/web/20120827025602/http://www.hydrochina.com.cn/) at a cost of
$115 million, and will generate 50 MW of electricity by August 2016.[201]

SK Hydro Consortium is constructing the 870 MW Suki Kinari Hydropower Project in the Kaghan Valley
of Pakistan's Khyber Pakhtunkhwa province at a cost of $1.8 billion,[202] SK Hydro will construct the
project with financing by China's EXIM bank.[203] The $1.5 billion Azad Pattan Hydropower project,
being developed on River Jhelum, is sponsored by CGGC. With a generation capacity of 700.7 MW, the
project will have the lowest generation tariff out of five proposed projects on the River Jhelum
Cascade.[204]

The $1.6 billion 720 MW Karot Dam which is under construction is part of the CPEC plan, but is to be
financed separately by China's Silk Road Fund.[205]

Pakistan and China have also discussed the inclusion of the 4,500 MW $14 billion Diamer-Bhasha Dam as
part of the CPEC project,[206] though as of December 2015, no firm decision has been made – though
Pakistani officials remain optimistic at its eventual inclusion.[207] On 14 November 2017, Pakistan dropped
its bid to have Diamer-Bhasha Dam financed under the CPEC framework.[208]

The $2.4 billion, 1,100 MW Kohala Hydropower Project being constructed by China's Three Gorges
Corporation predates the announcement of CPEC, though funding for the project will now come from
CPEC fund.[209] The project was approved by the government of Pakistani-administered Kashmir, the
Chinese government and the Three Gorges corporation in 2020,[210] the move was protested by India,
which claims Kashmir as its territory.[211] Renewable energy projects also include a 640 MW Mahl hydro
power project.[212]

Coal

Despite several renewable energy projects, the bulk of new energy generation capacity under CPEC will be
coal-based plants, with $5.8 billion worth of coal power projects expected to be completed by early 2019 as
part of the CPEC's "Early Harvest" projects.

On 26 May, it was unveiled that transmission line of 660 KV would be laid between matiari and Lahore.
The electricity would be produced from coal-based power plants at Thar, Port Qasim and Hub. It would
have the capacity to supply 2000MW with 10 percent overloaded capability for 2 hours.[213]

Balochistan
In Balochistan province, a $970 million coal power plant at Hub, near Karachi, with a capacity of 660 MW
to be built by a joint consortium of China's China Power Investment Corporation and the Pakistani firm
Hub Power Company as part of a larger $2 billion project to produce 1,320 MW from coal.[214]

A 300 MW coal power plant is also being developed in the city of Gwadar, and is being financed by a 0%
interest loan.[103] Development of Gwadar also include a 132 KV(AIS) Grid Station along with associated
D/C Transmission line at Down Town, Gwadar along with other 132 KV Sub Stations at Deep Sea Port
Gwadar.[215]

Punjab

The $1.8 billion Sahiwal Coal Power Project, in full operation since 3 July 2017,[216] is a project in central
Punjab that has a capacity of 1,320 MW. It was built by a joint venture of two Chinese firms: the Huaneng
Shandong company and Shandong Ruyi, who will jointly own and operate the plant.[217] Pakistan will
purchase electricity from the consortium at a tariff of 8.36 US cents/kWh.[218]

The $589 million project to establish a coal mine and a relatively small 300 MW coal power plant to be
built in the town of Pind Dadan Khan by China Machinery Engineering Corporation in Punjab's Salt
Range.[219] Pakistan's NEPRA has been criticized for considering a relatively high tariff of 11.57 US
cents/kWH proposed by the Chinese firm,[220] which had been initially agreed at 8.25 US cents/kWH in
2014.[221] The Chinese firm argued that coal transportation costs had greatly increased due to the
nonavailability of coal from nearby mines which had initially been regarded as the primary coal source for
the project. The company argued that coal would instead have to be transported from distant Sindh
province, which along with inefficiencies in mining procedures, increased the cost of fuel by 30.5%.[222]

Sindh

The Shanghai Electric company of China will construct two 660 MW power plants as part of the "Thar-I"
project in the Thar coalfield of Sindh province, while "Thar-ll" will be developed by a separate
consortium.[223][224] The facility will be powered by locally sourced coal,[225] and is expected to be put
into commercial use in 2018.[226] Pakistan's National Electric Power Regulatory Authority (NEPRA) has
agreed to purchase electricity from both Thar-l and Thar-ll at a tariff of 8.50 US cents/kWh for the first 330
MW of electricity, 8.33 US cents/kWh for the next 660 MW, and 7.99 US cents/kWh for the next 1,099
MW as further phases are developed.[227][228]

Near the Thar-I Project, the China Machinery Engineering Corporation in conjunction with Pakistan's
Engro Corporation will construct two 330 MW power plants as part of the "Thar-ll Project" (having
initially proposed the simultaneous construction of two 660 MW power plants) as well as developing a coal
mine capable of producing up to 3.8 million tons of coal per year as part of the first phase of the
project."[229] The first phase is expected to be complete by early 2019,[230] at a cost of $1.95 billion.[231]
Subsequent phases will eventually generate an additional 3,960 MW of electricity over the course of ten
years.[224] As part of infrastructure required for electricity distribution from the Thar l and ll Projects, the
$2.1 billion Matiari to Lahore Transmission Line, and $1.5 billion in Matiari to Faisalabad transmission line
are also to be built as part of the CPEC project.[66]
The 1,320 MW $2.08 billion Pakistan Port Qasim Power Project near Port Qasim will be a joint venture of
Al-Mirqab Capital from Qatar, and China's Power Construction Corporation – a subsidiary of Sinohydro
Resources Limited.[232][233] Pakistan's NEPRA and SinoHydro agreed to set the levelized tariff for
electricity purchased from the consortium at 8.12 US cents/kWh.[234] The first 660 MW reactor was
commissioned in November 2017.[235]

Liquified natural gas

Liquefied natural gas power LNG projects are also considered vital to CPEC. The Chinese government has
announced its intention to build a $2.5 billion 711 kilometre gas pipeline from Gwadar to Nawabshah in
province as part of CPEC.[236] The pipeline is designed to be a part of the 2,775 kilometre long Iran–
Pakistan gas pipeline, with the 80 kilometre portion between Gwadar and the Iranian border to be
connected when sanctions against Tehran are eased; Iran has already completed a 900 kilometre long
portion of the pipeline on its side of the border.[67]

The Pakistani portion of the pipeline is to be constructed by the state-owned China Petroleum Pipeline
Bureau.[237] It will be 42 inches (1.1 metres) in diameter, and have the capacity to transport 1 × 109 cubic
feet (2.8 × 107 m3 ) of liquified natural gas every day, with an additional 500 × 106 cubic feet (1.4 × 107 m3 )
of additional capacity when the planned off-shore LNG terminal is also completed[238] The project will not
only provide gas exporters with access to the Pakistani market, but will also allow China to secure a route
for its own imports.[239]

The project should not be confused with the $2 billion 1,100 kilometre North-South Pipeline liquified
natural gas pipeline which is to be constructed with Russian assistance between Karachi and Lahore with
anticipated completion by 2018.[240] Nor should it be confused with the planned $7.5 billion TAPI Pipeline
which is a planned project involving Turkmenistan, Afghanistan, Pakistan, and India.

Other LNG projects are currently under construction with Chinese assistance and financing that will
augment the scope of CPEC, but are neither funded by nor officially considered a part of CPEC. The 1,223
MW Balloki Power Plant is currently under construction near Kasur, and is being constructed by China's
Harbin Electric Company with financing from the China's EXIM bank, is one such example. In October
2015, Prime Minister Nawaz Sharif also inaugurated construction of the 1,180 MW Bhikhi Power Plant
near Sheikhupura,[241] which is to be jointly constructed by China's Harbin Electric Company and General
Electric from the United States.[242] It is expected to be Pakistan's most efficient power plant, and will
provide enough power for an estimated 6 million homes.[242] The facility became operational in May
2018.[243]

"Early Harvest" projects

As part of the "Early Harvest" scheme of the CPEC, over 10,000 megawatts of electricity-generating
capacity is to be developed between 2018 and 2020.[66] While some "Early Harvest" projects will not be
completed until 2020, the government of Pakistan plans to add approximately 10,000 MW of energy-
generating capacity to Pakistan's electric grid by 2018 through the completion of projects which
complement CPEC.

Although not officially under the scope of CPEC, the 1,223 MW Balloki Power Plant, and the 1,180 MW
Bhakki powerplants have both been completed in mid-2018,[243][244][241][245] which along with the 969
MW Neelum–Jhelum Hydropower Plant completed in summer 2018 and 1,410 MW Tarbela IV Extension
Project, competed in February 2018,[246] will result in an additional 10,000 MW being added to Pakistan's
electricity grid by the end of 2018 with a combination of CPEC and non-CPEC projects.[247] A further
1,000 MW of electricity will be imported to Pakistan from Tajikistan and Kyrgyzstan as part of the CASA-
1000 project, which is expected to be launched in 2018.[248]

Table of projects

"Early Harvest" Energy Project[249] Capacity Location

Pakistan Port Qasim Power Project. 1,320 MW (2 x 660 MW plants) Sindh

Thar-l Project 1,320 MW (4 x 330 MW plants) Sindh

Thar-ll Project and coal mine 1,320 MW (2 x 660 MW plants) Sindh

Sahiwal Coal Power Project 1,320 MW (2 x 660 MW plants) Punjab

Rahimyar Khan coal power project 1,320 MW (2 x 660 MW plants) Punjab

Quaid-e-Azam Solar Park 1,000 MW Punjab

Suki Kinari Hydropower Project 870 MW (expected completion in 2020)[250] Khyber Pakhtunkhwa

Karot Hydropower Project 720 MW (expected completion in 2021[251])[252] Punjab

China Power Hub Generation Company 2X660 MW Balochistan

Thar Engro Coal Power Project 660 MW (2 x 330 MW plants) Sindh

Gwadar coal power project 300 MW Balochistan

UEP Windfarm 100 MW Sindh

Dawood wind power project 50 MW Sindh

Sachal Windfarm 50 MW Sindh

Sunnec Windfarm 50 MW Sindh

Matiari to Lahore Transmission Line 660 kilovolt Sindh and Punjab

Other areas of cooperation

The CPEC announcement encompassed not only infrastructure works, but also addressed areas of co-
operation between China and Pakistan.

Agriculture and aquaculture

CPEC includes provisions for cooperation in management of water resources, livestock, and other fields of
agriculture. Under the plan, agricultural information project, storage and distribution of agricultural
equipment and construction project, agricultural mechanisation, demonstration and machinery leasing
project and fertiliser production project for producing 800,000 tons of fertiliser and 100,000 tons of bio-
organic fertiliser will be implemented.[253][254] The framework includes cooperation in Remote Sensing
(RS) and Geographical Information System (GIS), food processing, pre-and-post-harvest handling and
storage of agricultural produce, selection and breeding of new breeds of animals and new varieties of
plants, specifically fisheries and aquaculture.[255]

Science and technology

As part of CPEC, the two countries signed an Economic and Technical Cooperation Agreement,[256] as
well as pledged to "China-Pakistan Joint Cotton Bio-Tech Laboratory"[256] The two countries also pledged
to establish the "China-Pakistan Joint Marine Research Center" with State Oceanic Administration and
Pakistan's Ministry of Science and Technology[256] Also as part of the CPEC agreement, Pakistan and
China have agreed to co-operate in the field of space research.[72]

In February 2016, the two countries agreed to establish the "Pak-China Science, Technology, Commerce
and Logistic Park" near Islamabad at an estimated cost of $1.5 billion.[257] The park will be situated on 500
hectares, which will be provided by Pakistan to China's Xinjiang Production and Construction Corps, with
all investments expected to come from the Chinese side over the course of ten years.[257]

In May 2016, construction began on the $44 million 820 kilometer long Pakistan-China Fiber Optic
Project, a Cross Border Optical Fiber Cable that will enhance telecommunication and ICT Industry in the
Gilgit Baltistan, Khyber Pakhtunkhwa and Punjab region, while offering Pakistan a fifth route by which to
transmit telecommunication traffic.[258][259] which will be extended to Gwadar.[260][261][107]

in May 2019, Vice President of China and Pakistan has decided to launch Huawei Technical Support
Center in Pakistan.[213]

CPEC include establishment of pilot project of Digital Terrestrial Multimedia Broadcast for Pakistan
Television Corporation through Chinese grant at Rebroadcast Station (RBS) at Murree.[262] ZTE
Corporation will provide Pakistan Television Corporation collaboration across R&D of digital terrestrial
television technologies, staff training and content creation including partnerships with Chinese multinational
companies in multiple areas including television sets and set top boxes as international Cooperation.[263]

Other fields

The two nations also pledged co-operation in field ranging from anti-narcotic efforts,[256] to co-operation in
an effort to reduce climate change.[256] The two nations also agreed to increase co-operating between the
banking sectors of the two countries, as well as to establish closer ties between China Central Television
and the Pakistan Television Corporation.[256]

Confucius Institute at University of Punjab is planned to be soon launched in 2019.[213] Moreover,

Rashakai Special Economic Zone on M1 Highway a motorway junction near Nowshehra is planned as
well.[213]

Finance

Concessionary loans

Approximately $11 billion worth of infrastructure projects being developed by the Pakistani government
will be financed at an interest rate of 1.6%,[92] after Pakistan successfully lobbied the Chinese government
to reduce interest rates from an initial 3%.[264] Loans will be dispersed by the Exim Bank of China, China
Development Bank, and the ICBC.[265] For comparison, loans for previous Pakistani infrastructure projects
financed by the World Bank carried an interest rate between 5% and 8.5%,[266] while interest rates on
market loans approach 12%.[267]
The loan money would be used to finance projects which are planned and executed by the Pakistani
government. Portions of the approximately $6.6 billion[127] Karachi–Lahore Motorway are already under
construction.[268] The $2.9 billion phase which will connect the city of Multan to the city of Sukkur over a
distance of 392 kilometres has also been approved,[269] with 90% of costs to be financed by the Chinese
government at concessionary interest rates, while the remaining 10% is to be financed by the Public Sector
Development Programme of the Pakistani government.[270] In May 2016, the $2.9 billion loan were given
final approvals required prior to disbursement of the funds were given by the Government of the People's
Republic of China on 4 May 2016, and will be concessionary loans with an interest rate of 2.0%.[116] The
National Highway Authority of Pakistan reported that contractors arrived on site soon after the loan
received final approval.[116]

The China Development Bank will finance the $920 million towards the cost of reconstruction of the 487
kilometer portion of the Karakoram Highway between Burhan and Raikot.[271][272] An addition $1.26
billion will be lent by the China Exim Bank for the construction of the Havelian to Thakot portion of this
487 kilometer stretch of roadway,[114][115] to be dispersed as low-interest rate concessionary loans.[116]

$7 billion of the planned $8.2 billion overhaul of the Main Line 1 railway is to be financed by
concessionary loans, which extended by China's state owned banks.[273]

The long-planned 27.1 km long $1.6 billion Orange Line of the Lahore Metro is regarded as a commercial
project,[256] and does not qualify for the Exim Bank's 1.6% interest rate. It will instead by financed at a
2.4% interest rate[184] after China agreed to reduce interest rates from an originally planned rate of
3.4%.[274]

The $44 million Pakistan-China Fiber Optic Project, an 820 km long fibre optic wire connecting Pakistan
and China, will be constructed using concessionary loans at an interest rate of 2%, rather than the 1.6% rate
applied to other projects.[275]

Interest-free loans

The government of China in August 2015 announced that concessionary loans for several projects in
Gwadar totaling $757 million would be converted 0% interest loans.[92] The projects which are now to
financed by the 0% interest loans include: the construction of the $140 million East Bay Expressway
project, installation of breakwaters in Gwadar which will cost $130 million, a $360 million coal power
plant in Gwadar, a $27 million project to dredge berths in Gwadar harbor, and a $100 million 300-bed
hospital in Gwadar.[92] Thus, Pakistan only has to repay the principal on these loans.

In September 2015, the government of China also announced that the $230 million Gwadar International
Airport project would no longer be financed by loans, but would instead be constructed by grants which
the government of Pakistan will not be required to repay.[264]

Private consortia

$15.5 billion worth of energy projects are to be constructed by joint Chinese-Pakistani firms, rather than by
the governments of either China or Pakistan. The Exim Bank of China will finance those investments at 5–
6% interest rates, while the government of Pakistan will be contractually obliged to purchase electricity
from those firms at pre-negotiated rates.[191]
As an example, the 1,223 MW Balloki Power Plant does not fall under the concessionary loan rate of
1.6%, as the project is not being developed by the Pakistani government. Instead, it is considered to be a
private sector investment as its construction will be undertaken by a consortium of Harbin Electric and
Habib Rafiq Limited after they successfully bid against international competitors.[276] Chinese state-owned
banks will provide loans to the consortium that are subsidised by the Chinese government. In the case of
the Balloki Power Plant, state-owned banks will finance the project at an interest rate of 5%,[277] while the
Pakistani government will purchase electricity at the lowest bid rate of 7.973 cents per unit.[276]

ADB assistance

While the Hazara Motorway is considered to be a crucial part of the route between Gwadar and China. M-
15 will not be financed by CPEC funds. The project will instead be financed by the Asian Development
Bank.[164]

The N70 project is not officially a part of CPEC but will connect the CPEC's Western Alignment to the
Karachi-Lahore Motorway at Multan. The project will be financed as part of a $195 million package by the
Asian Development Bank announced in May 2015 to upgrade the N70 National Highway and N50
National Highway.[155] In January 2016, the United Kingdom's Department for International Development
announced a $72.4 million grant to Pakistan for roadway improvements in the province of Balochistan,
thereby reducing the total Asian Development Bank loan from $195 million to $122.6 million.[156]

The M-4 Motorway between Faisalabad and Multan is not to be financed by the Chinese government as
part of CPEC, but will instead be the first infrastructure project partially financed by the Asian
Infrastructure Investment Bank, and will be co-financed along with the Asian Development Bank for a total
of approximately $275 million.[140] Portions of the project will also be funded by a $90.7 million grant
announced in October 2015 by the government of the United Kingdom towards the construction of the
Gojra-Shorkot section of the M4 Motorway project.[163]

Impact
The importance of CPEC to China is reflected by its inclusion as part of China's 13th five-year
development plan.[278][279] CPEC projects will provide China with an alternate route for energy supplies,
as well as a new route by which Western China can conduct trade. Pakistan stands to gain due to upgrade
of infrastructure and introduction of a reliable energy supply.[280][281]

On 8 January 2017, Forbes claimed that CPEC is part of China's vision to write the rules of the next era of
globalization and help its export and investment engines run for years to come.[282] Writing in January
2017, Arun Mohan Sukumar of India's Observer Research Foundation claimed that "CPEC is an important
enough project whose economic and strategic consequences require methodical assessment", adding that
"CPEC may be a bilateral endeavour, but New Delhi cannot ignore its spillover effects on regional
governance" and concluding that "India would be ill-advised to rely on the false comfort that profits alone
will drive China's business with Pakistan".[283]

According to China's prime minister, Li Keqiang, Pakistan's development through the project might "wean
the populace from fundamentalism".[38]

Environment
Pakistan is already distressed by climate change and global warming issues as about 5,000 its glaciers are
melting at an alarming rate. It is affected by extreme weather patterns and seasonal shifts occurring in recent
past.[284] The CPEC coal based power plants are not in line with Pakistan's own green policy. It is
estimated that by the year 2030, around 371 metric tonne of Carbon dioxide will be the Greenhouse gas
emission from CPEC projects. 56% of this will be contributed by energy sector. CPEC expects a daily
commute of 7000 trucks which can potentially emit 36.5 million tons of CO2 .[285]

Since 2021, due to growing pressure on China for being the world's biggest polluter, it has since shifted its
focus from coal based energy investments in Pakistan to renewables. This is being done in a bid to promote
a more "greener" image of CPEC.[286]

Pakistani economy

The CPEC is a landmark project[287] in the annals of history of Pakistan. It is the largest investment
Pakistan has attracted since independence and largest by China in any foreign country.[288] CPEC is
considered economically vital to Pakistan in helping it drive economic growth.[289] The Pakistani media
and government have called CPEC investments a "game and fate changer" for the region,[290][291] while
both China and Pakistan intend that the massive investment plan will transform Pakistan into a regional
economic hub and further boost the deepening ties between the two countries.[292] Approximately 1 year
after the announcement of CPEC, Zhang Baozhong, chairman of China Overseas Port Holding Company
told The Washington Post that his company planned to spend an additional $4.5 billion on roads, power,
hotels and other infrastructure for Gwadar's industrial zone,[16] which would be one of the largest ever
sums of foreign direct investment into Pakistan.

Pakistan as late as early 2017 faced energy shortfalls of over 4,500 MW on a regular basis[64] with routine
power cuts of up to 12 hours per day,[65] which has shed an estimated 2–2.5% off its annual GDP.[65] The
Financial Times noted that Pakistan's electricity shortages are a major hindrance to foreign investment, and
that Chinese investments in Pakistani infrastructure and power projects will lead to a "virtuous cycle" that
will make the country more attractive for foreign investment in a variety of sectors.[293] Poor availability of
electricity is considered by the World Bank to be a main constraint to both economic growth and
investment in Pakistan.

The impact of Chinese investments in Energy sector was soon visible as in December 2017, Pakistan
succeeded in producing surplus electricity. Pakistani Federal Minister for Power Division, Awais Leghari
announced a complete end to power cuts in 5,297 feeders out of total 8,600 and claimed that the country's
current electricity production had gone up to 16,477 Megawatts which was 2700 megawatts more than the
demand.[294]

Pakistan's large textile industry has also been negatively affected by several-hour long power cuts, with
almost 20% of textile factories in the city of Faisalabad shutting down on account of power shortages.[295]
The CPEC's "Early Harvest" projects are expected to resolve shortages in power generation by 2018 by
increasing Pakistan's power generation capacity by over 10,000 megawatts.[66] As a result of improved
infrastructure and energy supplies, the Pakistani government expects that economic growth rates will reach
7% by 2018.[296]

Former Pakistan Prime Minister Shaukat Aziz also stated in May 2016 that predicted economic growth
from CPEC projects would result in stabilization of Pakistan's security situation,[297] which has also been
cited by the World Bank as hindrance to sustained economic growth in Pakistan.[298]
According to Chinese Foreign Ministry Spokesperson Hua Chunying, the corridor will "serve as a driver
for connectivity between South Asia and East Asia." Mushahid Hussain, chairman of the Pakistan-China
Institute, told China Daily that the economic corridor "will play a crucial role in regional integration of the
'Greater South Asia', which includes China, Iran, Afghanistan, and stretches all the way to Myanmar."[48]
When fully built, the corridor is expected to generate significant revenue from transit fees levied on Chinese
goods – to the tune of several billion dollars per annum.[299] According to The Guardian, "The Chinese are
not just offering to build much-needed infrastructure but also make Pakistan a key partner in its grand
economic and strategic ambitions."[300]

Moody's Investors Service has described the project as a "credit positive" for Pakistan. In 2015, the agency
acknowledged that much of the project's key benefits would not materialize until 2017, but stated that it
believes at least some of the benefits from the economic corridor would likely begin accruing even before
then.[301] The Asian Development Bank stated "CPEC will connect economic agents along a defined
geography. It will provide connection between economic nodes or hubs, centered on urban landscapes, in
which large amount of economic resources and actors are concentrated. They link the supply and demand
sides of markets."[302] On 14 November 2016, Hyatt Hotels Corporation announced plan's to open four
properties in Pakistan, in partnership with Bahria Town Group, citing the investment of CPEC as the
reason behind the $600 million investment.[303]

On 12 March 2017, a consortium of Pakistani broker houses reported that Pakistan will end up paying $90
billion to China over a span of 30 years with annual average repayments of $3–4 billion per year post fiscal
year 2020. The report further said that CPEC-related transportation would earn $400–500 million per
annum to Pakistan, and would grow Pakistani exports by 4.5% a year till fiscal year 2025.[304]

CPEC and the "Malacca Dilemma"

The Straits of Malacca provide China with its shortest maritime

access to Europe, Africa, and the Middle East.[305] Approximately
80% of its Middle Eastern energy imports also pass through the
Straits of Malacca.[306] As the world's biggest oil importer,[53]
energy security is a key concern for China while current sea routes
used to import Middle Eastern oil are frequently patrolled by the
United States' Navy.[307]

In the event that China were to face hostile actions from a United
States, energy imports through the Straits of Malacca could be
impeded, which in turn may jeopardise the Chinese economy in a
scenario that is frequently referred to as the "Malacca
Dilemma".[306] In addition to vulnerabilities faced in the Straits of
Malacca region, China is heavily dependent upon sea-routes that
pass through the South China Sea, near the disputed Spratly Islands Map showing territorial claims in
and Paracel Islands, which are currently a source of tension South China Sea. A high percentage
between China, Taiwan, Vietnam, the Philippines, and the United of Chinese energy imports pass
States.[308] The CPEC project will allow Chinese energy imports to through this disputed region,
rendering much of China's energy
circumvent these contentious areas and find a new artery in the
imports vulnerable to conflict.
west, and thereby decrease the possibility of confrontation between
the United States and China.[309] However, there is evidence to
suggest that any pipelines from Gwadar up to China would be very
expensive, would encounter numerous logistical difficulties including difficult terrain and potential
terrorism, and would barely make any impact on China's overall energy security.[310]
 China's stake in Gwadar will also allow it to expand its influence in the
Indian Ocean, a vital route for oil transportation between the Atlantic
and the Pacific. Another advantage to China is that it will be able to
bypass the Strait of Malacca. As of now, 60 percent of China's
imported oil comes from the Middle East, and 80 percent of that is
transported to China through this strait, the dangerous, piracy-rife
maritime route through the South China, East China, and Yellow Seas.

Council on Foreign Relations[311]

Access to western China

The CPEC Alignments will improve connectivity to restive Xinjiang, thereby increasing the region's
potential to attract public and private investment.[305] CPEC is considered central to China–Pakistan
relations; its central importance is reflected by China's inclusion of the project as part of its 13th five-year
development plan.[278][279] The CPEC projects will also complement China's Western Development plan,
which includes not only Xinjiang, but also the neighbouring regions of Tibet and Qinghai.[312]

In addition to its significance to reduce Chinese dependence on the Sea of Malacca and South China Sea
routes, CPEC will provide China an alternative and shorter route for energy imports from the Middle East,
thereby reducing shipping costs and transit times. The currently available sea-route to China is roughly
12,000 kilometre long, while the distance from Gwadar Port to Xinjiang province is approximately 3,000
kilometre, with another 3,500 kilometre from Xinjiang to China's eastern coast.[306] As a result of CPEC,
Chinese imports and exports to the Middle East, Africa, and Europe would require much shorter shipment
times and distances.

Route to circumvent Afghanistan

Negotiations to provide an alternate route to the Central Asian republics by way of China predate the
announcement of CPEC. The Afghanistan–Pakistan Transit Trade Agreement of 2010 provided Pakistan
access to Central Asia via Afghanistan; however, the full agreement has yet to be fully implemented. The
"Quadrilateral Agreement on Traffic in Transit" (QATT) was first devised in 1995, and signed in 2004 by
the governments of China, Pakistan, Kazakhstan, and Kyrgyzstan to facilitate transit trade between the
various countries, with no inclusion of Afghanistan.[313] Despite signing of the QATT, the agreement's full
potential was never realized, largely on account of poor infrastructure links between the four countries prior
to the announcement of CPEC.

During the visit of Afghan President Ashraf Ghani to India in April 2015, he stated "We will not provide
equal transit access to Central Asia for Pakistani trucks" unless the Pakistani government included India as
part of the 2010 Afghanistan–Pakistan Transit Trade Agreement.[314] The current Transit Trade Agreement
provides Afghanistan access to the Port of Karachi to conduct export trade with India, and allows Afghan
goods to be transited up to any border of Pakistan, but does not guarantee Afghan trucks the right to
traverse the Wagah Border, nor does the agreement permit Indian goods to be exported to Afghanistan via
Pakistan.[315] Owing to continued tensions between India and Pakistan, the Pakistani government
expressed reluctance to include India in any trade negotiations with Afghanistan, and as a result, little
progress was made between the Afghan and Pakistani sides.
In February 2016, the Pakistani government signalled its intention to completely bypass Afghanistan in its
quest to access Central Asia by announcing its intent to revive the QATT so that Central Asian states could
access Pakistani ports via Kashgar instead of Afghanistan,[316] thereby allowing the Central Asian
republics to access Pakistan's deep water ports without having to rely on a politically unstable Afghanistan
as a transit corridor. In early March 2016, the Afghan government reportedly acquiesced to Pakistani
requests to use Afghanistan as a corridor to Tajikistan, after having dropped demands from reciprocal
access to India via Pakistan.[317]

Alternate route to Central Asia

The heads of various Central Asian republics have expressed their desire to connect their infrastructure
networks to the CPEC project via China. During the August 2015 visit of Pakistani Prime Minister Nawaz
Sharif to Kazakhstan, the Kazakh Prime Minister Karim Massimov, conveyed Kazakhstan's desire to link
its road network to the CPEC project.[318] During the November 2015 visit of Tajikistan President
Emomali Rahmon to Pakistan, the Tajik premier also expressed his government's desire to join the
Quadrilateral Agreement on Traffic in Transit to use CPEC as a conduit for imports and exports to
Tajikistan by circumventing Afghanistan;[319] the request received political backing by the Pakistani Prime
Minister.[319]

The Chinese government has already upgraded the road linking Kashgar to Osh in Kyrgyzstan via the
Kyrgyz town of Erkeshtam while a railway between Urumqi, China and Almaty, Kazakhstan has also been
completed as part of China's One Belt One Road initiative.[320] Numerous land crossings already exist
between Kazakhstan and China as well. Additionally, the Chinese government has announced plans to lay
railway track from Tashkent, Uzbekistan, towards Kyrgyzstan with onwards connections to China and
Pakistan.[321] Further, the Pamir Highway already provides Tajikistan access to Kashgar via the Kulma
Pass. These crossings complement the CPEC project to provide Central Asian states access to Pakistan's
deepwater ports by completely bypassing Afghanistan – a country which has been ravaged by civil war and
political instability since the late 1970s.

Comparison to Chabahar Port

In May 2016, Indian Prime Minister Narendra Modi and his counterpart, Iranian President Hassan
Rouhani, signed a series of twelve agreements in Tehran, in which India offered to refurbish one of
Chabahar's ten existing berths, and reconstruct another berth at the Port of Chabahar,[322] in order to allow
Indian goods to be exported to Iran, with the possibility of onward connections to Afghanistan and Central
Asia.[323] As of February 2017, the project remains delayed while the governments of Iran and India blame
one another for delays.[324]

A section of the Indian media described it as "a counter to the China-Pakistan Economic Corridor",[325]
although the total monetary value of projects has been noted to be significantly less than that of CPEC.[326]

As part of the twelve memorandums of understanding signed by Indian and Iranian delegations as per text
released by India's Ministry of External Affairs, India will offer a $150 million line of credit extended by
the Exim Bank of India,[327] while India Ports Global also signed a contract with Iran's Aria Banader (http
s://web.archive.org/web/20160924211345/http://www.abiports.com/index.php?lang=en) to develop berths
at the port,[328] at a cost of $85 million[329] over the course of 18 months.[330]

Under the agreement, India Ports Global will refurbish a 640 meter long container handling facility, and
reconstruct a 600 meter long berth at the port.[322] India further agreed to extend a $400 million line of
credit to be used for the import of steel for the construction of a rail link between Chabahar and
Zahedan,[331] while India's IRCON (http://www.ircon.org/) and Iran's Construction, Development of
Transport and Infrastructure Company (http://www.cdtic.ir/) signed a memorandum of understanding
regarding the construction and finance of the Chabahar to Zahedan rail line at a cost of $1.6 billion.[332]

India's Highways and Shipping Minister, Nitin Gadkari suggested that the free trade zone in Chabahar had
the potential to attract upwards of $15 billion worth of investment in the future,[333] although he stated that
such investments are predicated upon Iran offering India natural gas at a rate of $1.50 per million British
Thermal Units,[334] which is substantially lower than the rate of $2.95 per million British Thermal Units
offered by Iran.[335] The two countries also signed a memorandum of understanding to explore the
possibility of setting up an aluminum smelter at a cost of $2 billion, as well as establishing a urea processing
facility in Chahbahar,[336] although these investments are also contingent upon Iran supplying low-cost
natural gas for operation of those facilities.[337]

India, Iran, and Afghanistan also signed an agreement with the intention of simplifying transit procedures
between the three countries.[329] Despite the expressed desire to circumvent Pakistan in order to augment
Iranian and Indian economic ties, Indian goods destined for Iran currently do not require transit through
Pakistan, as those goods can be exported to Iran via Bandar Abbas, where India also currently maintains a
diplomatic mission.[338] Bandar Abbas is also consider a key node on the North–South Transport Corridor,
backed by India and Russia since 2002.[339][340] Indian goods also can be imported and transited across
Iran upon arrival at Bandar-e Emam Khomeyni near the Iraqi border.

As per the Afghanistan–Pakistan Transit Trade Agreement, Afghan goods can be transited across Pakistan
for export to India as well, though Indian goods cannot be exported to Afghanistan via Pakistan.[341] Upon
completion of Chabahar, Indian exporters will benefit from the potential ability to export goods to
Afghanistan, a country with an annual gross domestic product estimated at $60.6 billion.[342]

After signing the agreement, Iran's ambassador to Pakistan, Mehdi Honerdoost, stated that the agreement
was "not finished", and that Iran would welcome the inclusion of both Pakistan and China in the
project.[343] While clarifying that Chabahar Port would not be a rival or enemy to Pakistan's Gwadar
Port,[344] he further stated that Pakistan and China had both been invited to contribute to the project before
India, but according to Pakistani media neither China nor Pakistan had expressed interest in
joining.[345][346]

However, eventually, Iranian ambassador made it clear that Iran doesn't consider Chahbahar to be a project
which could feasibly rival CPEC as he said "Iran is eager to join CPEC with its full capabilities,
possibilities and abilities".[347]

In July 2020, Pakistani media The News International reported that the Iranian government has dropped
India from a long stalled rail project and has instead signed a comprehensive deal with China.[348] This
report was later refuted by the government of Iran, who stated that the investments from India didn't have
anything to do with the railway project in the first place.[349][350]

Security Issues

While agreements have specifically cited improvements for Afghan connectivity to the world as a benefit of
Indian investment in the region,[351] Afghanistan's politically instability could limit the potential usefulness
of transit corridors to population centers near Kabul or Kandahar,[352] as those routes traverse southern and
eastern Afghanistan, where the Taliban is most active.[353] The Chabahar plan relies upon connections to
the Afghan Ring Road.[354] By August 2016, the Taliban was noted to have captured large swathes of land
in Helmand Province, and threatened to capture the provincial capital of Lashkar Gah,[355] which lies on
the portion of the Afghan Ring Road connecting Chabahar to Kandahar and Kabul. As a result, portions of
the Afghan Ring Road were closed due to Taliban insurgent activity.[356] Also in August 2016, the Taliban
claimed responsibility for an attack which left twelve foreign tourists dead as they were traveling on an
alternative route to the Afghan Ring Road, between Kabul and Herat.[357] In September 2016, Iran's
president Hassan Rouhani expressed his country's interest in joining CPEC during a meeting with Nawaz
Sharif.[358] The Pakistan Army has taken the security responsibility of CPEC employees and investors
which become more effective and healthy relationship between China and Pakistan.

Security

Security Forces

Pakistan Navy and Chinese Navy ships are to jointly guard the safety and security of the trade corridor, as
Pakistan seeks to expand the role of its maritime forces.[359] From December 2016, Pakistan's Navy
established a special taskforce "TF-88" to ensure there is maritime security for trade.[360][361] Chairman
Parliamentary Committee on CPEC confirmed that Sindh province will dispatch 2000 police officers, while
Punjab will dispatch 5000 police officers for the project, while the Pakistani Army will deploy 12,000
troops to safeguard the route.[362] China plans to transfer 4 ships to the Pakistan Maritime Security Agency
with two ships called PMSS Hingol and PMSS Basol.[363] For territorial security, Pakistan has formed the
Special Security Division.[364] Pakistan plans to train 12,000 security personnel to protect Chinese workers
on the corridor.[365][366][367] As of August 2015, 8,000 Pakistani security officials were deployed for the
protection of over 8,100 Chinese workers in Pakistan.[368] Maqbool Ahmed, an investigative journalist
from the now closed Herald reported large scale land acquisition involving tens of thousands of acres near a
lagoon in Gwadar by the Pakistani Navy for building a massive garrison in order to secure maritime
security.[369]

As part of CPEC, Pakistan has boosted its international engagement in terms of foreign policy with China,
Iran, USA, Turkey and Malaysia are to be engaged for the maritime economy related to CPEC.[370] Iranian
President Rouhani revealed his intentions to Pakistan to join CPEC in a meeting at the UN[371] Russia has
also expressed support for CPEC.[372][373]

The Special Security Division, headed by a Major General, would consist of nine army battalions and six
wings of civil armed forces. Similarly, Gwadar Security Task Force is another formation to be raised,
commanded by a Brigadier. These security measures for Chinese projects would cost an estimated total of
Rupees 10 Billion as of 2015. The Chief of Army Staff visited CPEC Security headquarters in February
2016 and vowed that “the security forces are ready to pay any price” for successful completion of CPEC
projects. The NEPRA in Pakistan has raised concerns on the alarming rate of growth in security
expenditure of Power Projects under CPEC, which it considers to be "dark".[374]

Baloch militants

The Balochistan National Party (Mengal) (BNP-M), the Baloch National Front (BNF), the Baloch
Republican Party, and militant organizations like the Balochistan Liberation Front, the Balochistan
Liberation Army, and the Baloch Republican Army are among those that have raised objections with
regards to CPEC.[375] There have been instances of attacking and killing Chinese nationals associated with
CPEC.[376] Many Baloch prefer autonomy and control over their own local resources for their
development instead of foreign mega projects.[375]
The Baluchistan province saw multiple attempted nationalist and separatist insurgencies before CPEC, but
investments in Balochistan have led to a significant drop in separatist groups, and this effect has even seen
the integration of the locals in Balochistan in the workforce at Gwadar. Despite this, Pakistan still alleges
that India is supporting anti-CPEC agenda, and the Pakistani government often points to such evidence as
the alleged Indian spy Kulbhushan Jadhav, who was caught in the Baluchistan province on 3 March 2016.
Information regarding Jadhav was then presented to the United Nations.[377] Exiled Baloch nationalist
Hyrbyair Marri in 2016 warned the safety of Chinese nationals working on the project could not be
guaranteed,[378] though violence in the region peaked in 2013 before sharply declining.[379][note 1]

The Pakistani government reported that over 800 Baloch militants surrendered to security forces in 2016
after the launch of a reconciliation programme,[381] including over 200 at a single ceremony in November
2016.[382] Balakh Sher Badini, a senior militant commander of the Balochistan Liberation Army,
surrendered to Pakistani forces in January 2017.[383] Another 21 militants from another militant group, the
Balochistan Republican Army, surrendered shortly thereafter along with 3 militant commanders.[384] A few
days later, high-ranking militant commander Lal Din Bugti surrendered to Pakistani security forces, along
with 6 other commanders.[385] Separatist violence had decreased in the province so much by 2017, that
such groups had become much less of a threat compared to Islamist militants.[386]

Pakistan faced Taliban insurgent violence that largely began in 2008 during the rule of General Pervez
Musharraf. China reportedly also expressed concern that militant groups in Xinjiang could collaborate with
Tehrik-i-Taliban militants in Pakistan.[53][387] In 2014, Pakistan launched Operation Zarb-e-Azb to
eradicate Tehrik-i-Taliban militants from Pakistani territory, following an attack on Karachi's airport, and
the 2014 Peshawar school massacre in which terrorists from Tehrik-i-Taliban killed 148 school children.

Following the launch of Operation Zarb-e-Azb, violence in Pakistan has drastically declined.[388] 2016
saw the lowest number of deaths from acts of violence since the current wave of violence began in
2007,[389] with total fatalities dropping nearly 66% compared to 2014.[389] Acts of terrorist violence fell
75% between 2014 and 2016.[390] According to the South Asia Terrorism Portal (http://www.satp.org/),
civilian fatalities from terrorist attacks in 2013 stood at 3,001, while the number had declined to 612 by
2016[391] – the lowest number since 2005.

Uyghur militants

In the 1980s, Uyghurs from China crossed into Pakistan to get enrolled in Madrassas and with the training
and arms provided by Chinese government, they have fought the Soviets in Afghanistan. Upon returning to
China, many joined the violent Uyghur nationalist groups.[392] Pakistani intelligence agencies had
undertaken crackdown on Uyghurs militants of Islamic State returning from Syria and East Turkistan
Islamic Movement (ETIM) along with Baloch rebel groups involved in targeting CPEC projects. They
claim hostile Indian intelligence agencies are involved in training thousands of militants formerly belonging
to Taliban factions. Nearly 30,000 Chinese workers are employed in about 280 Chinese funded projects
where almost 35,000 security personnel have been deployed.[393]

Alleged Indian subversion

CPEC passes through the disputed region of Kashmir where Indian and Pakistani border guards have
occasionally exchanged fire across the Line of Control,[394][395] though no CPEC project is located near
the line. Chinese intelligence agencies have also reportedly shared information with Pakistani authorities
regarding alleged efforts by the India's Research and Analysis Wing to subvert CPEC.[396] In March 2016,
Pakistan reported that it had arrested Kulbhushan Yadav, whom Pakistan claims to be a spy from India's
Research and Analysis Wing, and who entered Pakistan from Iran specifically to destabilize regions in
Pakistan's Baluchistan province along with terrorist organization Tehrik-i-Taliban and Baloch liberation
army (B.L.A) in order to hinder implementation of CPEC projects.[397] India though has denied the claim
saying that Yadav had been "kidnapped last year from Iran and his subsequent presence in Pakistan has
never been explained credibly".[398] Former Chief of Army Staff General Raheel Sharif in April 2016
accused India's Research and Analysis Wing of destabilizing Pakistan in an attempt to disrupt and stymie
implementation of various CPEC projects.[399] Pakistan's Secretary of Defense Lieutenant General Alam
Khattak stated in April 2016 that the arrest of Kulbhushan Yadav indicated Indian interference in CPEC,
and further alleged that India's Research and Analysis Wing, in collusion with Afghanistan's National
Directorate of Security, had set up a dedicated espionage unit with express intent to sabotage CPEC.[400]
India moved to the International Court of Justice (ICJ), which after deliberation stayed execution of
sentence passed by Pakistani military court, the ICJ also found violation of Vienna Convention on
Diplomatic Relations by Pakistan and directed Pakistan to provide consular access to Kulbhushan Yadav in
its July 2019 verdict.[401][402]

List of major projects

Estimated
Gwadar Projects Status Notes
Cost
Phase 1 complete. Phase 2 under
construction.[403] Tax exemptions for port and
300 US $ Partially Free Zone notified in Finance Act 2020. 46
Gwadar Port enterprises have been registered for investment in
million Completed
Free Zone. 03 companies started production. First
imports cum exports cargo by M/s HKSUN
received in Gwadar free zone on 7 April 2021.

179 US $ Project completed and inaugurated on 3 June

East Bay Expressway Completed
million 2022.[256]

Pak China Friendship 100 US $ Under Groundbreaking held on 16 December 2019.

Hospital million Construction Expected completion in December 2022.[256]
This project will aim at creating state-of-the-art
Pak China Technical And 10 US $
Completed vocational and technical training institute in
Vocational Institute million
Gwadar. Completed in October 2021.[404]

New Gwadar International 230 US $ Under Construction work started on 31 October 2019. It
Airport million Construction will be operational in March 2023[256][405]
Road/Railway Length Estimated
Status Notes
Projects (Km) Cost

Completed in 2016, it will connect the western,

Gwadar-Turbat- Rs. 13
193 Completed central and eastern routes of CPEC with the
Hoshab (M-8) billion
Gwadar Port.[406][407]

Surab-Hoshab Rs. 17.97 N85 highway connects Hoshab to Sorab and is an

449 Completed
(N-85) Billion essential link in the western route of CPEC.[406]
Tendering for construction work of two sections is
Zhob - Quetta Rs. 66.8 Under completed and contractor mobilized whereas the
305 remaining three sections tendering will process
(Kuchlak) (N-50) Billion Construction
soon.[408]
Reconstruction
of the Karakoram 1,315 US It's Thakot -Havelian Section of 118 km has been
118 Completed
Highway Phase $ million completed by March 2020.[409]
II
 Inaugurated on 5 November 2019, this 392 km
Multan-Sukkur 2,889 US Sukkur to Multan Motorway is a critical element of
392 Completed
Motorway (M-5) $ million
the Peshawar to Karachi Motorway Route.[410]
Abdul Hakeem-
Project has been completed and inaugurated on
Lahore Motorway 230 Completed
30 March 2019
(M-3)

It is part of the western alignment of CPEC.

Hakla D.I Khan Rs. 122.2
285 Completed Project completed and inaugurated on 5 January
Motorway billion
2022.[411]
19.19 67% Completed. It is expected to be completed
Khuzdar-Basima Under
110 Billion
Road N-30
Rupee
Construction by December2021[412][413]

Orange Line 1,626 US Project is completed and inaugurated on 25 Oct

27 Completed
(Lahore Metro) $ million 2020.[414]

Upgradation of The entire track from Karachi to Peshawar to be

Karachi– 6,808 US doubled. Speed of passenger trains to be raise
1,872 In Planning from 65/110 km/h to 160 km/h. ECNEC approved
Peshawar Line $ million
ML-1 the project on 5 August 2020.[415]

Capacity Estimated
Energy Projects Status Notes
(MW) Cost
Kohala
2,400 US
Hydropower 1,100
$ million
In Planning expected completion in 2026[416]
Project

Azad Pattan Expected commercial operation date (COD)

1,600 US
Hydropower 701 In Planning
Project
$ million 2026.[417]

Dawood wind 112.65 US Commercial operation date (COD) 5 April 2017.

50 Completed
power project $ million Fully operational.[418]

Karot Completed and put into full commercial operations

1,720 US
Hydropower 720 Completed
Project
$ million on 29 June 2022.[419]

Port Qasim 1,912 US

Power Project
1,320
$ million
Completed Project has been completed on 25 April 2018[420]

Quaid-e-Azam 1,301 US Partially First phase complete, generating 400 MW of

1,000
Solar Park $ million Completed electricity.[197] 600 MW Under implementation[195]
Sahiwal Coal 1,912 US
Power Project
1,320
$ million
Completed Completed in July 2017. In operation.[216]

250 US $ Commercial operation date (COD) 16 June 2017,

UEP Wind Farm 99 Completed
million Operational[421]

Sachal Wind 134 US $ Commercial operation date (COD) attained 11 April

50 Completed
Farm million 2017, Operational[422]
Three Gorges
Second and 150 US $ Commercial operation date (COD) attained 9 Jul
100 Completed
Third Wind million 2018, Operational[423]
Power Projects
Western Energy
63.12 US
(Pvt.) Ltd. Wind 50
$ million
In Planning Generation Licence Acquired. Tariff in Review[424]
Power Project

Hubco Coal 1,912 US

Power Project
1,320
$ million
Completed COD is 14 Aug 2019, fully operational.[425]
Suki Kinari 70% Completed. Commercial operation date
2,000 US Under
Hydropower 870
Project
$ million Construction (COD) December 2022.[426]

Coal Power
Project of Engro
995 US $
Powergen 660
million
Completed COD is 10 July 2019. in operation.[427]
Limited at Thar
Block-II

Coal Power
Project of
1,440 US
Shanghai 1,320
$ million
completed Project Completed on 5 February 2023.[428]
Electric at Thar
Block-I

Coal Power The Project has successfully achieved its

Project of Thar 498 US $ commercial operations date on 1 October
330 Completed
Energy Limited million
at Thar Block-II 2022.[429]

Coal Power
Project of Thal
498 US $ Operational. Synchronized with national grid on
Nova Power 330 completed
Limited at Thar
million December 30, 2022.[429]
Block-II

Other Energy
Capacity Cost Status Notes
Projects

Project has been completed in September

Matiari to Lahore 2021.[430] This state-of-the-art transmission line is
HVDC 4,000 1,658 US built to evacuate 4,000 MW of power from the coal
Completed
Transmission MW $ million power plants being developed in thar coal field to
Line (878 km) national grid stations located in central part of the
country.

Open Pit Mine of 7.6 On 31 January 2022, the first shovel of lignite coal
SSRL in Block-I Million 1,080 US
Completed was extracted at the mine.[431] It will enable mine-
of Thar Coal tons / $ million mouth coal power project of Shanghai Electric to
Field year generate 1,320 MW electricity.

Thar block-II unearthed coal on 10 June 2018.[432]

Coal is being provided to 660 MW coal power
project of Engro Powergen Limited, 330 MW TEL
coal power plant and 330 MW Thal Nova coal
power plant located at the site. It has achieved a
Open Pit Mine of 7.6
major milestone of completing phase II of mine
SECMC in Million 630 US $
Completed expansion on October 10, 2022, announcing the
Block-II of Thar tons / million
Commercial Operations Date (COD) for the 7.6
Coal Field year
million tons per annum (MTPA) mine expansion
from the previously 3.8 million tons per annum
under phase I of its plan. Mine capacity is being
increased to 12.2 million tons /year by June
2023.[433][434]
Special Economic Zones Area Status Notes

Rashakai Special Economic Zone (SEZ) in Khyber

Rashakai Economic Zone, M-
702 Acres Launched Pakhtunkhwa was rolled out in Jun 2021, kicking
1, Nowshera
off phase II of CPEC.

Under
Dhabeji Special Economic 1530
Bidding The land has been allocated.
Zone Acres
Process
Allama Iqbal Industrial City, 3217 Launched Numerous national and international enterprises
Faisalabad Acres have been allotted plots in the SEZ. Few
 companies have already started construction
work.

1000 Phase-1 has been launched for allotment of

Bostan Industrial Zone Launched
Acres industrial plots.

Cancelled projects
Projects Capacity Location Notes
Gadani Power Project 6,600 MW (10 x 660 MW plants) Balochistan

Rahimyar Khan coal power project 1,320 MW (2 x 660 MW plants) Punjab [435]

Muzaffargarh coal power project 1,320 MW (2 x 660 MW plants) Punjab [435]

Matiari to Faisalabad transmission line 660 kilovolt Sindh and Punjab

Imported Coal Based Power Project at Gwadar 330 MW Gwadar [436]

Challenges

Political, Legal and Social Risks

Political regimes in Pakistan are not stable and the civil government establishments have often seen military
interference. Such scenarios result in frequent change in leadership thereby jeopardizing the agreements
signed by previous leaders. This increases the uncertainty in the commercial environment, unreliable
outcomes of investments and endangers the ease of doing business. This risk gets magnified when foreign
investments and workers are involved. A flawed legal system in the country encourages sub-standard
construction procedures, illegitimate bid activities, corrupt and unprofessional interference, breached
contracts, unethical discrimination and irregularity in laws. Instances of crime, extortion, kidnapping, arms
conflict, terrorist attacks, extremism & civil wars, nationwide strikes, protests, riots, and mass expropriations
are hindrances to timely and successful completion of projects.[437]

In 2021, local residents of Gwadar protested against the perceived threat to their livelihoods due to illegal
fishing in local waters allegedly by Chinese trawlers.[438] In 2023, the provincial government undertook a
crackdown on the illegal trawlers after months of protests, resulting in reappearance of marine life.[439]

Known for its dominance over civil institutions and democratic rule,[440] China had sought to enlist
Pakistan's military for the lead role as it guarantees the successful completion of projects at a time when the
politicians were infighting for the ownership of the corridor projects.[441] During the tenure of Nawaz
Sharif, many projects were launched in Punjab Province which has a significant vote bank for the PML-N
leader. Upon assuming power, Imran Khan pressurised the Chinese for development of Rashakai SEZ in
Khyber Pakhtunkhwa Province which is stronghold for the PTI leader.[442] 2017 official statistics shared
with the parliament of Pakistan, showed out of 330 CPEC related projects in Pakistan, 176 are in Punjab
province while Balochistan had an allocation of 8 CPEC projects.[443] During 2018 national election
campaign, Imran Khan rallied against the alleged corruption of previous government and highlighted unfair
contracts in CPEC.[444] Sceptics also question on the efficient usage of foreign money to develop the
infrastructure given the level of corruption.[445] China even temporarily halted the release of funds for 3
projects in 2017 due to reports of corruption.[446]
In February 2023, the Gwadar Port was predicted to cost five times more which the officials blamed on the
Gwadar Port Authority (GPA) and the Ministry of Maritime Affairs for having developed the dredging
project in last year at Rs 1bn on guesstimates in emergency circumstances for the delivery and diverting of
a couple 50,000DWT cargo ships due to navigational challenges. However, the costs were then increased
based on a proper study conducted by Pakistan Navy followed by competitive bidding.[447]

The delay of the maintenance dredging for a few years were already to possibly have serious repercussions
in terms of penalties and damages that might have been imposed on GPA by the Concession Holder due to
loss in business.[447]

Pakistani economic crisis

The worst economic crisis in Pakistan's history since 2022 calls into question whether CPEC can achieve
its development goals.[448]

Criticism
Kaiser Bengali, a senior economist who was associated with Benazir Income Support Programme (BISP),
Government of Pakistan and has headed research institutions including Social Policy and Development
Centre (SPDC), Karachi, and Sustainable Development Policy Institute (SDPI), Islamabad, has highlighted
that no feasibility study was conducted for the CPEC and the negative economic implications from the
drawbacks of tax exemption given to Chinese products. Environmental Impact Assessment was also not
done to offset the environmental cost of CPEC.[88]

Chinese intent

Although announced as developed for commercial purposes, chances of port infrastructure projects
transforming into a well-equipped military naval base in the future cannot be ruled out.[449][450] The
earliest hints of military (PLA) involvement in this ambitious global project started appearing in 2015.[451]
In 2018, The New York Times speculated military interests of China in Pakistan "instead of an economic
project with peaceful intent". Beijing-based military analysts and high-ranking officials have highlighted
geostrategic importance of Gwadar Port and indicated the need to develop a naval base in near vicinity
similar to the one China built in Djibouti.[452][450][453] However, when asked about Pakistan's offer to turn
Gwadar into a PLA naval base,[454] the spokeswoman for the Chinese Ministry of Foreign Affairs denied
its existence, stating: “I have not heard of it. It’s my understanding that this issue was not touched upon.”

Observers have also pointed out that by involving nations in its megaprojects, China has silenced it's allies,
including Pakistan, on the Uyghur situation. This is notable as all those who are vocal on the religious
aspects of conflicts in Palestine, Kashmir or that of Rohingya people does not highlight or raise the issue of
human right violations against the Uyghurs.[455] In 2022, many countries including Pakistan voted against
and rejected another motion by Western countries seeking debate on China's treatment of Uyghur Muslims
and Human Rights violations.[456]

The fibreoptic project would aid in terrestrial distribution of broadcast Television in Pakistan which will
cooperate with Chinese media in the “dissemination of Chinese culture”. The CPEC plan anticipates an
intense and wide-ranging penetration in most sectors of Pakistan's economy as well as its society by
Chinese enterprises and culture. Access to the full supply chain of the agrarian economy is a top priority for
the Chinese.[30]
In 2022, Twitter suspended fake accounts being operated from Pakistan, identified in a report by the Indian
non-profit organization Digital Forensics, Research and Analytics Centre (D-FRAC) that were involved in
disinformation campaigns regarding CPEC. The report claimed they was spreading "false Chinese
narratives regarding CPEC".[457]

Debt Trap

CPEC is seen as the main plank of China's Belt and Road Initiative.[458] Should the initial $46 billion
worth of projects be implemented, the value of those projects would be roughly equivalent to all foreign
direct investment in Pakistan since 1970,[459] and would be equal to 17% of Pakistan's 2015 gross
domestic product.[460] The external debt of Pakistan has surged significantly after accepting this Chinese
offer.[35]

Chinese monetary offer for Pakistan under CPEC being a combination of Debt & Equity, it is evaluated
that the Debt component will be serviced at 7%-8% interest per annum while Equity component is expected
to deliver an estimated ROE of 17% per annum. The Pakistan government, however, claims that the
Chinese loans will be repaid over a period of 20–25 years at rate of 2% interest.[461] Christine Fair, a South
Asia expert at Georgetown University has termed CPEC as "Colonizing Pakistan to Enrich China".

From early 1990s, IMF has provided more than a dozen bailouts on requests by Pakistan to save its
dwindling economy, which has struggled 22 of the 30 years in meeting the austerity measures demanded by
IMF. Nadeem-ul-Haque, a former IMF official and former deputy chairman of the Pakistani government's
Planning Commission wrote, "The pattern is always the same, with the Fund’s blessing, the government
goes on a shopping spree, taking out costly loans for expensive projects, thus building up even more debt
and adding new inefficiencies. After a few years, another crisis ensues, and it is met by another IMF
program."[462] The Pakistani establishment sees Chinese loans as an alternative to IMF loans.[463]

Many of the nations with which China has partnered have a history of political instability, military
intervention in governance, problems of law and order, rampant corruption, lack of transparency and no
entrepreneurial culture. Hence the critics call these projects “a neo-colonial scheme” and “a debt trap” for
many nations.[455][38]

Parallels with Sri Lanka

Observers have drawn comparisons with 2022 economic turmoil of Sri Lanka as a consequence of inability
to repay[464] $6 billion in loans used to construct an expensive Chinese-led port and airport project in
Hambantota. Sri Lankan authorities settled the debt by giving up control of the port and some 15,000 acres
of land around it to China on a 99-year lease. Citing examples of several countries from Malaysia to
Colombia involved in Belt and Road Initiative, the opacity[463] involved in the Chinese ventures have
evoked accusations that such projects lead to corruption and mismanagement that ultimately risk losing the
natural resources and sovereignty of the participating nations.[465][462] It is in resemblance with Gwadar
Port given to Chinese control for a lease period of 40 years.[438] Pakistan has already started negotiating the
debt-relief from China owing to difficulties to repay the loan and is seeking ease in the payment obligations
towards debt and its interest for the projects under CPEC.[40] As of 2022, Pakistan owes China about $30
billion which accounts for nearly 30% of its foreign debt.[466]

Financial Implications
According to official statistics, 20% of CPEC is debt-based finance,[467] while 80% of CPEC are
investments in Joint Ventures (JV) enterprise between Pakistan and China,[468] with the initial estimate of
project contributing to 40,000 jobs for local Pakistanis and 80,000 jobs for Chinese. However, at a later
stage of project execution, it was reported that in some cases, China has apparently brought in its prisoners
as workforce thereby depriving the opportunities for local Pakistani population.[469] Official statistics
suggested a return of US$6 billion to 8 billion from taxes per annum such as road and bridge tolls. The total
CPEC loan is 6% of Pakistan's GDP, however many commentators and a few Governments claimed the
project a debt-trap.[470] Nevertheless, officials countered that 3.5% of Pakistani GDP per annum is lost due
to poor transportation networks, which the CPEC investment aims to remedy leading to added benefits for
any lag in Pakistan's growth statistic. Economic analysts have stated tangible benefits of this initiative
including an end to the major energy shortages in Pakistan which had previously crippled economic
growth.[471] On 14 January 2020, Pakistan operationalized Gwadar Port for Afghan transit trade.[472] On
31 May 2021, Gwadar Port become fully operational, along with the availability of online booking for the
delivery of goods.[473]

In addition to the aforementioned issues, some sources have suggested that the interest rate for CPEC
related loans would be high, with India's Daily News and Analysis paper suggesting that Pakistan had
unwittingly accepted loans that would "be offered at very high rates of interest",[474] although the actual
interest rates were negotiated prior to acceptance, and for most projects will be 1.6%;[92] conversely
previous Pakistani infrastructure projects financed by the World Bank carried an interest rate between 5%
and 8.5% in comparison, and have strings attached.[475][266]

Several articles in Pakistan have criticised the project's finances as being shrouded in mystery, while one
article suggested that "there is far too much secrecy and far too little transparency".[476] The Private Power
and Infrastructure Board has also been accused of irregularities in the approval process for coal power
plants and the tariffs at which Pakistan is contractually obliged to purchase electricity from those
plants,[477] with special concern regarding potential irregularities in the tariff approved for the 300 MW
coal power plant to be built in Pind Dadan Khan by China Machinery Engineering Corporation.[478]

In December 2017, it was reported that as per the Gwadar Port agreement, the Chinese companies would
get 91 per cent but the Gwadar Port Authority would get only 9 per cent of revenue. In the same month a
seven-member delegation of Senators visited China. On returning from China, all the Senators issued press
statements and unequivocally claimed that Balochistan would not get anything from the CPEC. One of the
senators, Senator Kabir Muhammad Shahi also claimed that while 60% of the funds are being used for
power generation, other than 300 MW for Gwadar Port, not even 1 MW of that would be given to
Balochistan.[479][480]

Trade Imbalance

Local traders in Pakistan have expressed their reservations over CPEC.[481] Chinese exports through the
Karakoram Highway have entered the domestic Pakistani market, and are cheaper due to the relatively
higher cost of production in Pakistan.[482] It has also been speculated that the CPEC will replace Pakistani
exports by Chinese ones in external markets.[482] Increasing import of automobiles, weapons, home
appliances and agricultural products from China to Pakistan is major concern for the disproportion trade
deficit.[24]

Baloch Nationalists
Resistance of impoverished locals in the Balochistan region's Gwadar is a major hurdle in this project.[375]
The region is a wealth of minerals but this does not reflect in the impoverished lives of residents[483] who
struggle for basic minimum necessities, such as clean drinking water, reliable power supply, education and
health facilities. Government neglect on poverty and unemployment has given rise to religious extremism.
Non-consultation before taking up the plan and the denial of employment to local population by bringing
people from other provinces to work for the project has increased the hostility.[483]

Some Baloch nationalists have opposed the large-scale development projects envisioned by CPEC, fearing
that such developments in the province would eventually result in local residents "losing control" over
natural resources.[484] Others have alleged that CPEC is a "conspiracy" meant to stimulate the settlement of
migrants from other regions of Pakistan in order to render ethnic Baloch a minority in the province.[485]

In accordance to the Pakistani Government's announcement of its intent to issue resident cards to the city's
inhabitants as a security measure to prevent the movement of firearms into the city,[486] former Chief
Minister of Balochistan province, Akhtar Mengal, suggested at a political rally in November 2015, that
execution of CPEC projects and the resident card policy would eventually result in ethnic Baloch being
denied entry into the city.[487] The resident cards measure would require any non-resident visitor to the city
to register at designated security checkpoints prior to entering the city by road,[486] without any reference to
ethnicity. The former Chief Minister did, however, clarify that he would not oppose development projects
in the province that he believed would uplift the plight of local residents.[487] Shortly thereafter, the
Pakistani government announced its intention to establish a training institute named Pak-China Technical
and Vocational Institute at Gwadar which is to be completed at the cost of 943 million rupees to impart
skills to local residents to train them to operate machinery at the port.[45]

Indian analyst Athar Hussain, the director of the Asia Research Centre at London School of Economics,
has expressed concerns that the CPEC is "likely to bring more development to regions that are already
developed, instead of poor areas such as Balochistan."[488] Burzine Waghmar, a member of the Centre for
the Study of Pakistan, SOAS, University of London, suggested that CPEC projects are not targeted
towards benefiting the indigenous Baloch population, and will accelerate human rights violations in the
province.[488]

In December 2016, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) released a
report that given the rate at which Chinese nationals were migrating to Balochistan for the CPEC project,
the Chinese would outnumber the Baloch people by 2048, raising concerns of marginalisation of the
Baloch citizens.[489][490]

Gwadar residents' concerns

Access to traditional fishing zones and subsistence fishing practices, involvement and hiring of local people
in the developmental projects, curbing interference of security forces in daily city affairs and easing the
navigation from checkpoints and surveillance installations, right healthcare and quality education are among
the demands of Gwadar residents.[491]

While nationalists openly oppose CPEC, some local leaders and residents of Gwadar city have also
expressed concern in regards to the project – the head of Gwadar's local fisherman association stated in an
interview with NBC News that "Development is good, China is our great friend, this CPEC thing sounds
amazing, but don't forget that this is our land, first."[492] Other residents doubt they will see any of the
benefits promised by CPEC, while others fear they will be evicted from their homes in order to make way
for infrastructure works.[493]
In response to concerns of local residents, Lt. General Amer Riaz who currently heads security operations
in the province, stated that locals would not be deprived of benefits, and that local Gwadar residents would
have "the first right to everything."[494] Pakistan's Minister of Planning, National Reforms, and
Development, Ahsan Iqbal, further stated in May 2016 that Gwadar residents would be regarded as "main
stakeholders" in the city's master plan, and that fishermen specifically would also be accommodated by the
plan.[495] The developer of Gwadar Port, COPHC, has also announced that it will assist Gwadar's
fishermen to help boost the region's seafood industry by developing programmes to improve the quality of
local seafoods.[496]

KP Provincial Assembly

Some planning aspects and technicalities associated with the route have been criticised in political forums
and by the media.[497] The Provincial Assembly of Khyber Pakhtunkhwa province adopted a resolution
against the alleged decision of the central government to change the multibillion route of the proposed
project by diverting it away from Khyber Pakhtunkhwa province.[498]

The federal Minister of Planning Development and Reform Ahsan Iqbal formally denied any change in the
alignment.[50][499][500] According to Dr Ahmad Rashid Malik, senior research fellow at the Institute of
Strategic Studies Islamabad (ISSI), the route controversy is "baseless and an unfounded reality...".[501] As a
result of objections to CPEC, the Chinese government in 2015 issued a statement urging Pakistani political
parties to resolve their differences over the project.[502]

Indian objections

India's objections to Chinese activity in Pakistan-administered Kashmir dates back to the 1970s, when the
People's Liberation Army built the Karakoram Highway that linked China's far-western province of
Xinjiang with northern Pakistan.[503]

The Government of India, which shares tense relations with Pakistan, objects to the CPEC project as
upgrade works to the Karakoram Highway are taking place in Gilgit-Baltistan; territory that India claims as
its own. During the visit of Indian Prime Minister Narendra Modi to China in 2015, the Indian Foreign
Minister, Sushma Swaraj reportedly told Chinese Communist Party general secretary Xi Jinping that
projects passing through Gilgit-Baltistan are "unacceptable" as they require construction in the claimed
territory.[504][505] India's Foreign Secretary Subrahmanyam Jaishankar also confirmed that the issue had
been raised with the Chinese government on the trip.[506] Swaraj reiterated this stance during a meeting in
August 2016 with Chinese foreign minister Wang Yi, stating India would "resolutely oppose" the corridor
in Kashmir.[507]

India further did not initially object to major Chinese-sponsored upgrade works to the Karakoram Highway
after a 2010 earthquake, though it did object the presence of Chinese troops in the region that were sent to
guard Chinese workers.[508]

India further did not object to construction of the Mangla Dam, undertaken with World Bank funding and
British technical assistance in southern Kashmir − a region which India claims as its own territory. India
even maintained that the Wullar Barrage project in Indian-administered Kashmir, which Pakistan regards as
a violation of the Indus Water Treaty, would ultimately be beneficial for the Mangla Dam.[509] India further
did not object to construction works at the Kashmir's Neelum–Jhelum Hydropower Plant, under
construction with Chinese assistance since 2008. India in 1991 did not raise objections to its
construction.[510]
Following the 2005 Kashmir earthquake, large-scale reconstruction work of infrastructure took place across
northern Kashmir with the assistance of South Korean, Turkish, and Saudi firms.[511] Chinese companies
took part in 14 post-earthquake reconstruction projects in the disputed region, worth $6 billion.[512] India
did not object to these works, despite the fact that infrastructure near the militarily sensitive Line of Control
were upgraded.

Indian objection to Chinese construction works in the Gilgit-Baltistan arose in 2011 in response to a
Chinese complaint regarding a joint Indian-Vietnamese oil exploration project in the disputed South China
Sea.[513] The influential Institute for Defence Studies and Analyses, a think tank funded by the Indian
Ministry of Defence,[514] in 2011 called for India to begin raising objection to Chinese projects in the
region at the "international level."[515]

See also
China portal

Pakistan portal
Engineering
portal

Bangladesh-China-India-Myanmar Economic Corridor

Central Asia Regional Economic Cooperation Program
China–Pakistan relations
Khyber Pass Economic Corridor
Maritime Silk Road
One Belt, One Road initiative
Quadrilateral Traffic in Transit Agreement
String of Pearls (Indian Ocean)
The China-Pakistan Economic Corridor of the Belt and Road Initiative (book)

Notes
1. Which Pakistan alleges are supported by Indian intelligence services.[377] Between 2014
and 2015, acts of terrorism decreased by 50% in the province, while sharp decreases were
also noted in deaths, kidnappings, and sectarian killings.[380]

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External links
Official CPEC website (Government of Pakistan) (http://cpec.gov.pk/)
Samrez Salik, Muhammad (2018). "China-Pakistan Economic Corridor: A Perspective from
Pakistan". Asian Journal of Middle Eastern and Islamic Studies. 12 (2): 142–154.
doi:10.1080/25765949.2018.1481619 (https://doi.org/10.1080%2F25765949.2018.148161
9). S2CID 158441766 (https://api.semanticscholar.org/CorpusID:158441766).
Husain, Khurram (15 May 2017). "Exclusive: CPEC master plan revealed" (https://www.daw
n.com/news/1333101/exclusive-cpec-master-plan-revealed). Dawn.com. Retrieved 15 May
2017.
Rafiq, Arif, "The China-Pakistan Economic Corridor: Barriers and Impact," (https://www.usip.
org/sites/default/files/2017-10/pw135-the-china-pakistan-economic-corridor.pdf) United
States Institute of Peace, October 2017.
"China-Pakistan Economic Corridor: Opportunities and Risks" (https://www.crisisgroup.org/a
sia/south-asia/pakistan/297-china-pakistan-economic-corridor-opportunities-and-risks),
International Crisis Group, 29 June 2018.

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