CPEC

China Pakistan
Economic Corridor
PRESENTED BY:
 SOHA ALI
 MAHAM SAJID
 SHANDANA MUNIR
 MARYAM RASHEED

ECONOMICS
DEPARTMENT
Pakistan
 Pakistan is a country gifted with unlimited natural
resources and has been independent from
around seven decades.
 One of the main problems that the country faced
was poor economy of which the country always
tried to get over.
 After suffering from deadly terrorism the FDI inflow
also went down but the country is working harder
to raise the investment level.
 China as one of the good friend of Pakistan has
launched one of the largest investment program
for Pakistan under which it is going to fund the
infrastructure and power projects in the country
History of Pak-China relations

 Pakistan–China relations
began in 1950
 Pakistan and China enjoy
brotherly relations and
keep supporting each
other.
 Strategic alliance was
formed in 1972.
 China has invested $20
billion in various projects.
 Mega infrastructural
projects in Pakistan.
Friendly relations
 Relations between China and
Pakistan
 These relations began in 1950 when Pakistan
was among the first countries to recognize the
Peoples Republic Of China.
 Military assistance with China begin in 1966.
 Economic cooperation with China begin 1979.
 China helped Pakistan in developing its nuclear
power plants.
 Maintaining close relations with China is a
central part of Pakistan's Foreign Policy.
 Pakistan has served as Chinas main bridge
between Muslim countries.
CPEC
 China Pakistan Economic
Corridor is a mutual China
and Pakistan trade
agreement.
 It was signed in April 2015
 It is mutually beneficial for
both countries.
 Initially 46 Billion dollars
were invested by China for
this project.
 Now it is worth about 62$
billion.
 CPEC is a game changer
for both Pak-China.
Map showing CPEC route
History of Silk Route
 Silk route was an ancient network of trade
routes from China to the Mediterranean
sea connecting the east and west.
 The Silk Route from Asia to Europe was the
most important of routes for international
trade until the 13th century.
 It was named as Silk Road in 1877, as the
major trade product which traveled on
this road was Silk.
Continue..
 This ancient route circulated goods as well as
the culture of China, India, Persia, Arabia and
Rome.
 But today it has been renamed as ―The Trans
Asian Railway, The Northern East-West
corridor, The Eurasian Land Bridge or the New
Silk Road
 The Ancient Silk Route from Asia to Europe was
never a single route but a collection of paths
(i) both land and maritime (ii) all over Asia;
trade along these routes were free as the
division of Asia only came by later with
colonialism
The ancient Silk Route
Continue….
 The Silk Road Economic Belt is only the first
half of China’s One Belt One Road project.
Either by land or by sea.
 The aim is to connect China’s ports to those
of South Asia’s i.e., from South China Sea
through the India Ocean to the Persian Gulf,
Red Sea and the Gulf of Aden.
 At present, the Silk Road project is mainly
concentrating on the railway line from
Europe to China via Central Asia,
Kazakhstan-China International Logistics
Company of port Lianyungang and the
China-Pakistan Economic Corridor.
One Belt One Road
• One belt one road, also
known as the Belt and Road
Initiative (BRI) is a project
initiated by the Chinese
President Xi Jinping.
• Its objective is to build trade
routes between China and
the countries in Central Asia,
Europe and Indo-Pacific
littoral countries.
• The 'belt' refers to the
overland interconnecting
infrastructure corridors; the
Silk Road Economic Belt
(SREB) component.
• The 'road' refers to the sea
route corridors; the 21st
Century Maritime Silk Road
(MSR) component.
ONE BELT ONE ROAD
 CPEC GENESIS
 The CPEC is a comprehensive 15-year
development project between Pakistan
and China spanning 2015-2030 that
entails the linking of Gawadar Port to
China’s north-western region of Xinjiang.

The 15-year project is being executed in four
phases:
The first phase of the economic corridor is
1ST focused on the “Early Harvest” scheme of the
PHASE- CPEC. That is solving the problems of energy and
infrastructure sector
2018

Second phase of the CPEC envisages the

2ND construction of cross-border optical fiber cable
PHASE- system between China and Pakistan
2020

3RD The third phase of CPEC mostly comprises of major

PHASE- upgrades to Pakistan's ageing railway system
2025

4TH Longer term projects under CPEC also call for

construction of the 682- kilometer-long Khunjerab
PHASE- Railway line from the city of Hegelian to the
2030 Khunjerab Pass on the Chinese bored.
ECONOMIC ZONES OF CPEC
 Beyond the initial phase, there are plans to
establish Special Economic Zones (SEZs) in the
Corridor where Chinese companies will locate
factories.
 Planning Commission of Pakistan is expecting
27 SEZs to setup across country.
 The distribution of SEZs will be as follows: eight
SEZs in Khyber Pakhtunkhwa, seven in Punjab
and
 Baluchistan each, three in Sindh while Gilgit-
Baltistan and Islamabad will have one, one
each (DAWN, Jan 2016).
Mega infrastructural project
under CPEC
 Power projects of electricity and LNG
plants.
 Special economic zones.
 New international airport.
 Construction of berths.
 Schools and colleges.
 Hospitals
 Desalination plants etc..
Gwadar port and free
economic zone
Gwadar Economic Zone
 Gwadar is a warm water, deep sea port situated
on the Arabian sea at Gwadar in Baluchistan.
 This port is a prominent feature of CPEC plan, as
it is a crucial link between One Belt One Road
and Maritime Silk Road projects.
 A 653 km long Makran highway was built to link
Karachi and Gwadar.
 A cost of $1.62 Billion was used for the
construction of Gwadar city and Gwadar port.
 It became fully functional on 14 November 2016.
 The port is officially leased to china for 43 years.
 Importance of Gwadar port
 Gwadar is the most important destination in
CPEC. It is the economic hub to great future.
 It is because it is a warm water port with the
depth of 18m which is the greatest in the world.
 The number of berths equals 120 ships.
 51% of Chinas imports takes place through sea
on which they spend $400 million a day which
is huge.
 It takes about 3 months to do trade from sea
but after the functioning of Gwadar port it only
takes 28 days to trade by which they can save
200 millions dollars.
Showing the new and old
trade routes
The Objectives Of CPEC
 OBJECTIVE OF PAK-CHINA
ECONOMIC CORRIDOR
 Increase the volume of trade between Pakistan and
china.
 Take full advantage of preferential trade
agreement(PTA) and free trade agreement (FTA).
 Increase export to china, recently export to China is
$3.14 billion.
 Pakistan and china are second largest partners in
south Asia, this will help to retain partnership.
 Widen Karakorum high way and open new
economic corridor from china to Gwadar.
 Approximately reduce 10000 km distance and it is the
shortest route.
 Objectives Continued…

 Expand trade with Russia by providing trade

route till Gwadar port.
 Development of infrastructure along Pakistan.
 China access to the Indian Ocean with the aim
of widening its geopolitical influence and military
presence in the region.
 Job opportunities and economic development
in Baluchistan.
 Increase Chinese investment, Pakistani
investment in china will also be encouraged.
Objectives continued…
 Regional peace, prosperity and elevate the life
of poor people of south Asia.
 Enhance trade among Pakistan, China, Gulf
States, Central Asia and Africa.
 China is interested to extend the Iran-Pakistan
pipeline to its western territory.
ADVANTAGES OF PAK-CHINA
ECONOMIC CORRIDOR
 Increasethe economic
collaboration between
both countries by
connecting western
china to Gawadar.

 Regional stability in Asia

as well as whole world.

 Pakistan economy will

Boost.
Advantages continued….
 Pakistan can avail great
opportunities from chine’s
expert in various sectors
like energy ,Technology
and Education sector.
 Create new employment
opportunities.
 Pakistan and china both
collectively target the half
of the population of the
world ,it will provide great
opportunity for both
countries to expend their
market.
Benefit To China
• Access to the Indian
Ocean via Gawadar will
enable China’s naval
warships and merchant
ships to bypass.

• Gawadar port is 18km

deep port with a warm
water deep sea will
enable the china to
adjust 120 ships at a time.

• China may may take

advantage from a route
that is just 2000km in rival
with 12900km on silk
road.
Benefit To Pakistan
• CPEC brings much needed
investment in the Pakistani
economy.
• Will help in creating jobs and
reducing poverty.
• A consistent inflow of large-
scale Foreign Direct
Investment (FDI) will greatly
help Pakistan to improve its
perception cum image with
other investors.
• Pakistan’s geostrategic
security interests will
become directly aligned
with those of China.
• Pakistan as one of the key
pivots in OBOR vision,
effectively means that with
the right management and
leadership skills Pakistan can
emerge as the main
corridor.
IMPACT OF CPEC ON
PAKISTAN
 ECONOMIC IMPACT

 CPEC has a positive impact on various sectors

 There are 3 major sectors of GDP i.e.
1. AGRICULTURE sector
2. INDUSTRY sector
3. SERVICES sector
 These sectors are further divided into subsectors
 Agriculture sector
 Share of agriculture sector in GDP is 21%
 Labor engaged in this sector is 44%
 Shares in export is 65%
 CPEC develops agriculture sector for
mutual benefit of both countries by
1. improving labor productivity
2. Resource utilization and land
productivity
3. Improving farmer income and
increasing employability
4. Agriculture industrialization chain
 CPEC brought forward 17 agriculture
development projects
 It has four sub sectors i.e. crops,
livestock, fishing, forestry
 Industrial sector
 Share of industrial sector in GDP is 20%
 Its 4 subsectors are mining, manufacturing, construction
and gas/electricity generation
 Textile industry: the production industry for textile under
CPEC will be built in Kashgar economic development
zone and selling Economic Processing Zone will be in
Lahore and Karachi
 cement and building material: about 4% of project cost
of CPEC is spent on cement that is about 190 billion PKR
 Automobile industry: about 800,000 required
 Petroleum industry: is flourishing with production of
180,000 tons
 Steel industry is very important due to manufacturing
 Mineral exploitation: 2 projects under CPEC
1. Saindak copper gold mine project
2. Dudder zinc lead mine
 Services sector
 Share in GDP is about 59%
 banking sector: finances coming from Chinese
banks for CPEC projects is USD 51 billion. Banks are
being benefitted as they receiving money for
projects worth 30 billion USD
 Communication: CPEC has huge plans for
developing infrastructure including highways,
railways, seaports, airports and fiber optic cable
 Ownership of housing: constructing housing units
along economic corridor
 Coastal tourism: great potential under CPEC for
this purpose constructing hotels, golf clubs, coastal
tour lines, nursing homes and hot air balloon
services.
SOCIO-ECONOMIC IMPACT
 CPEC will promote
globalization which will
lead to diffusion of
both culture.
 Chinese population is
spreading in the
country as a
beginning of cultural
change.
 Along with English now
Chinese language is
becoming of great
value in the country
that is lessening value
of Urdu.
Continue..
 Impact of CPEC is free
trade and cultural influx
 Free trade is threat to
local market because
of inexpensive Chinese
products; transmission
of materialistic culture.
 China will gain new
market which is the
reason behind OBOR
initiative.
 Major transmitter of
culture is media. CPEC
master plan is
broadcasting Chinese
content on Pakistani
channels.
Continue…
 We see more Chinese
roaming on the
neighborhood. An example
of Shan Masala add shows
Pakistani culture being
adopted by Chinese
women to become part of
local family; this may be
altered in reality.
 Chinese have big irreligious
population where as
Pakistani culture is strictly
religious.
Continue..
 Some unethical values may influence the
youth as done by Indian and Turkish
content.
 Chinese Pakistani competing against
each other will bring positive competition.
 Along with bad there can be valuable
ethics adopted from Chinese such as their
hardwork and technologies.
CHALLENGES OF CPEC TO PAKISTAN
 The challenges of CPEC to Pakistan may
be external and internal.
 From CPEC project Pakistan may be
challenged through an external sources.
 The Pakistan may also face some internal
challenges.
 EXTERNAL Challenges

 SUPER-POWER RIVALRY
 As the global competition is increasing
the desire of becoming sole super power
is also increasing .it will leads to great
tension as every country wants to
become it . This rivalry mainly exists
between USA and China.
 Another major external effect of CPEC is
the increase in rivalry with India
 INDIAN CONFLICT
 India has been creating irritants and
disinformation about the project .
 INTERNAL CHALLENGES

 Security Vulnerabilities
 Capacity of the State
 Tax and Power Tariff Issues
 Lack of quality of labor force
 Provincial concerns
• Baluchistan issues.
• Khyber pakhtunkhwa issues.
Conclusion
 Natural Gateway for
China.
 Positive response by
both countries through
mutual cooperation.
 Both countries are keen
to enhance trade
activities.
 Infrastructural
improvement and
Development of Dams.
 Stability of economy by
investment in different
sectors.