China Pakistan Economic

Corridor
Lecture Prepared by Scholar Hamza Amir Khalil Sayed
 Origin of CPEC
• The Corridor strategy can be traced back to the 1960s as part
of Pakistan’s efforts to develop Gwadar port as an alternate
port and shipping hub, which could ultimately
1. uplift province of Balochistan,
2. serve as an important conduit for China
3. and assume the role of regional transit and transportation
hub in maritime domain.
 Origin of CPEC
• The geo strategic environment following 1960s did not favour the
initiation of project, therefore remained in the background.
• In November 2006, President Musharraf during his visit to Beijing
initiated the vision of trade corridor between China and Pakistan
linking Kashgar with Gwadar via Korakoram Highway (KKH).
• The cornerstones of the project remained the Gwadar port and the
trans-Pakistan pipeline.
• Pakistan’s political instability following Musharraf’s standoff with
judiciary distracted the government and no worthwhile progress
could be made.
 Origin of CPEC
• Chinese Premier Li Keqiang during his visit to Pakistan on 22-23 May
2013 outlined strategic vision of Pakistan-China Economic Corridor
• The project was hailed by then President Asif Ali Zardai and the
Prime Minister in waiting Mr Nawaz Sharif during their meetings with
Chinese Premier.
• Pakistani media, Think Tanks and Public expressed full support
thanked China for assisting Pakistan
• President Xi Jinping also gave his full support
 Origin of CPEC
• The vision was immediately followed by all relevant ministries of
Pakistan and China and great progress has been made in
actualizing the concept.

• During the visit of Pakistani President Mamnon Hussain to China in

February 2014, both countries reiterated solidifying their plans on
proposed Economic Corridor.
 Origin of CPEC
• President Mamnon Hussain stated in Beijing on last day of his
visit on 19 February 2014 that
• “project is going to be a monument of the century.
• It will benefit not only Pakistan and China, but also the whole
region with billions of people”
 Background
• Peaceful development of China is for the better service to
humanity and inclusive development of the world through a
win-win cooperation.
• China’s practical steps in line with these objectives make it
clear that the good neighbour approach to diplomacy
encompassed in its harmonious world concept has become
the basic blueprint for its international strategy
 Background
• The vision of a harmonious world stalks from the ancient Chinese
culture
• and symbolizes the Chinese cultural desire and practice of
“advocating peace”,
• “acting in good faith and cultivating friendship with neighbours”
• and “living in harmony with all others far and near”
• National rejuvenation and Peaceful development are at the core of
policy planning which is summarized in the comprehensive concept
of Chinese Dream.
 Background
President Xi Jinping States
• To realize Chinese Dream, we must adhere to
peaceful development.
• We will unswervingly follow the road of peaceful
development, unswervingly pursue the mutually
beneficial and win-win strategy of opening up.
 Background
President Xi Jinping States
• We are not just committed to China’s own development;
• we are equally serious about fulfilling our responsibilities and
making contributions to the rest of the world.
• Our development will not only benefit the Chinese people, but
also the rest of the world
 Background
• It can be understood explicitly that China’s peaceful
development is not China specific,
• but caters for Chinese nation’s great aspirations of positive
contributions towards humanity
• and common development of rest of the world
• with inclusive participation and peaceful coexistence
 Understanding CPEC
• China-Pakistan Economic Corridor is a framework of regional
connectivity.
• CPEC will not only benefit China and Pakistan but will have positive
impact on Iran, Afghanistan, India, Central Asian Republic, and the
region.
• The enhancement of geographical linkages having improved road,
rail and air transportation system with frequent and free exchanges
of growth and people to people contact,
 Understanding CPEC
• Enhancing understanding through academic, cultural and
regional knowledge and culture, activity of higher volume of
flow of trade and businesses,
• Producing and moving energy to have more optimal
businesses
• And enhancement of co-operation by win-win model will result
in well connected, integrated region of shared destiny,
harmony and development.
 Understanding CPEC
• China Pakistan Economic Corridor is journey towards economic
regionalization in the globalized world. It founded peace,
development, and win-win model for all of them.
• China Pakistan Economic Corridor is hope of better region of the
future with peace, development and growth of economy.
 Vision
• To improve the lives of people of Pakistan and China by
building an economic corridor
• Promoting bilateral connectivity, construction, explore
potential bilateral investment,
• Economic and trade, logistics and people to people contact
for regional connectivity.
 Vision
Main Contours include
• Integrated Transport & IT systems including Road, Rail, Port,
Air and Data Communication Channels
• Energy Cooperation
• Spatial Layout, Functional Zones, Industries and Industrial
Parks
• Agricultural Development
 Vision
• Socio-Economic Development (Poverty Alleviation, Medical
Treatment, Education, Water Supply, Vocational Training)
• Tourism Cooperation & People to People Communication
• Cooperation in Livelihood Areas
• Financial Cooperation
• Human Resource Development
 Significance
CPEC has Significance for the development of the
region. Potential areas of cooperation/development
include:
• Regional Connectivity
• Transport Infrastructure
• Energy Hub/flows
• Logistic Hub/flows
• Trade & Commerce
• Peace & development of region
• Connectivity/Harmonization/Integration of
civilizations
 Significance
CPEC has Significance for the development of the region.
Potential areas of cooperation/development include:
• Diverse Investment opportunities
• Industrial Cooperation
• Financial Cooperation
• Agricultural Cooperation
• Socio-Economic Development
• Poverty Alleviation
• Education
• Medical Treatment
• Water Supply
• Vocational Training
 Significance
CPEC has Significance for the development of the region.
Potential areas of cooperation/development include:
• Tourism including coastal Tourism
• Educational linkage
• Human resource development
• People to people contact
• Increase in livelihood opportunities
• Enhance Security and stability of the region
 Special Economic Zones
• Special Economic Zones (SEZs) are designated areas within a country that are subject to specific regulations and incentives
aimed at promoting economic activity, attracting investment, and driving industrialization. The primary purposes of SEZs
are as follows:
• 1. Attracting Foreign Direct Investment: SEZs offer a range of incentives, such as tax breaks, duty-free import of raw
materials and capital goods, and streamlined administrative procedures, to attract foreign companies to invest in the
designated area.

2. Promoting Export-Oriented Industries: SEZs often focus on industries that are geared towards export, such as
manufacturing, processing, and assembly operations. This helps to boost a country's exports and contribute to its balance
of trade.

3. Generating Employment: By attracting investment and facilitating the establishment of businesses, SEZs create job
opportunities for local communities, leading to economic growth and poverty reduction.

4. Encouraging Technology Transfer and Innovation: SEZs can be centres for technology transfer and innovation, as they
often attract companies with advanced technologies and know-how, leading to knowledge spillovers and skill development.

5. Infrastructure Development: The development of infrastructure within SEZs, including transportation, utilities, and
telecommunications, supports the efficient operation of businesses and enhances the overall economic development of the
region.

6. Regional Development: SEZs can serve as catalysts for the development of specific regions within a country, helping to
 Special Economic Zones
• There are several special economic zones (SEZs) that have been established under the China-
Pakistan Economic Corridor (CPEC). These zones are aimed at attracting foreign investment,
promoting industrialization, creating job opportunities, and boosting economic growth in
Pakistan. Here are some of the key SEZs under CPEC:
• 1. Gwadar Port Free Zone: Located in the port city of Gwadar, this SEZ aims to promote
international trade and develop Gwadar as a hub for transshipment and re-export activities.
• 2. Rashakai Economic Zone: Situated in Khyber Pakhtunkhwa province, this SEZ focuses on
industries such as textiles, food processing, and construction materials.
• 3. Allama Iqbal Industrial City: Based in Faisalabad, Punjab province, this SEZ is focused on
textiles, apparel manufacturing, and related industries.
• 4. Dhabeji Special Economic Zone: Located near Karachi, this SEZ targets industries such as
steel, engineering, automotive, and chemical processing.
• 5. Bostan Industrial Zone: Situated in Balochistan province, this SEZ aims to promote
agriculture-based industries, including fruit processing, packaging, and other related sectors.
 Phases of CPEC
• The China-Pakistan Economic Corridor (CPEC) has been divided into several phases to ensure the smooth implementation and
completion of various projects. These phases are as follows:

• 1. Early Harvest Projects: This phase focused on quickly completing certain projects that were already under construction or in
the planning stages before the formal announcement of CPEC. These early harvest projects included infrastructure development,
energy generation, and connectivity enhancement.

• 2. Short-Term Plan (2017-2020): This phase aimed at accelerating progress in priority areas. It involved the completion of key
infrastructure projects such as road networks, railways, and the Gwadar Port. Emphasis was also given to energy projects to
address Pakistan's power shortage. Industrial cooperation and agricultural development were also part of this plan.

• 3. Medium-Term Plan (2021-2025): This phase aims to consolidate the gains made in the previous phases and further expand
cooperation in new priority areas. It includes the development of Special Economic Zones (SEZs), with a focus on
industrialization, technology transfer, and job creation. Efforts will also be made to enhance agricultural productivity, promote
tourism, and strengthen cultural exchanges.

• 4. Long-Term Plan (2025-2030): This phase looks towards the future and envisions deepening and diversifying the cooperation
between China and Pakistan. It emphasizes sustainable development, innovation, research and development, and human
resource capacity building. The long-term plan also aims to promote people-to-people exchanges and strengthen cultural ties.

• Each phase of CPEC builds upon the achievements and progress made in the previous phase. The overall objective is to create a
robust economic corridor that benefits both countries and promotes regional connectivity and prosperity.
 Conclusion
• The China-Pakistan Economic Corridor (CPEC) has emerged as a significant and
transformative initiative in the relationship between China and Pakistan. It
represents a landmark cooperation endeavor aimed at promoting connectivity,
economic development, and regional integration. Through CPEC, China aims to
establish a transportation and energy corridor that connects western China to the
Gwadar Port in Pakistan, providing access to the Arabian Sea and beyond. CPEC
remains a complex and evolving phenomenon in Pak-China relations, carrying both
opportunities and challenges. Its success and impact will depend on effective
governance, addressing concerns, and harnessing its potential for sustainable and
inclusive development.