Since the establishment of diplomatic relations between China and Pakistan in 1951, the two countries have witnessed numerous significant milestones in their partnership. Over the decades, high-level exchanges between leaders have strengthened political trust, while cultural and educational exchanges have fostered closer ties between the people of both nations. In 2015, both countries decided to upgrade China-Pakistan relations to an all-weather strategic partnership of cooperation. Since then, this all-weather friendship has expanded across various sectors. One of the most notable developments is the China-Pakistan Economic Corridor (CPEC). As the flagship project of the Belt and Road Initiative (BRI), it has benefited the region’s infrastructure, industrial and technological developments, environmental sustainability, regional connectivity and so on.
This report highlights the efforts between China and Pakistan to strengthen cooperation under the influence of CPEC, combining research studies of several scholars on key areas such as industrial growth, environmental sustainability, human development, and regional connectivity. The report provides a comprehensive overview of how this cooperation advances Pakistan’s socioeconomic progress and strengthening bilateral ties.
Ⅰ. China Pakistan Economic Corridor Facilitates Infrastructure Development
Infrastructure plays a vital role in the economic development of any nations. In Pakistan, a country with approximately 240 million people, around 60% of which live in rural areas, infrastructure has been a great concern. With a road density of 33 km/100 square km and a meager growth rate of 0.47 percent from 2002 to 2011, its transport infrastructure has been subpar and lacked investment, be it land transport or air transport. However, with the completion of various transportation infrastructure projects under CPEC since 2013, the infrastructure landscape has seen huge progress.
According to Dr. Liaqat Ali Shah’s study “Building Foundations—Infrastructure and Energy Synergies under CPEC”, CPEC strategically links Kashgar in China with Gwadar in Pakistan, passing through major cities such as Quetta, Peshawar, Islamabad, Lahore, and Karachi and connecting Central and South Asia. Investment in transport infrastructure, estimated at approximately USD 8.9 billion for 2,500–3,000 km of roads connecting Gwadar port to Kashgar, is expected to stimulate economic growth through enhanced connectivity, reduced transportation costs, and increased efficiency for businesses and workers. Meanwhile, other benefits, including travel time reductions, job creation and tourism development also follow.
Energy projects, often intertwined with transport projects, play complementary roles in enhancing economic development. Efficient transport infrastructure, such as roads, railways, and ports, facilitates the movement of goods and services, reducing costs and improving market access. Simultaneously, reliable energy infrastructure supports industries, businesses, and households with the power to operate efficiently. When these two sectors are developed in tandem, they create synergies, significantly enhancing economic productivity.
However, challenges still persist, such as requirements for long-term investments and ongoing security risks. But as China-Pakistan relations deepen, the combination of Chinese experience, commitment, Pakistan’s resolve and its domestic market alongside its connectivity with the regional economies, as well as its desire to bring about the essential changes in its economy, does inspire hope for the synergy of energy and transport infrastructure in the near future.
Ⅱ. China Pakistan Economic Corridor Promotes Industrial Growth
Multibillion-dollar projects under CPEC, which include strengthening road and power infrastructure, developing Free Trade Zones (FTZs), and upgrading Gwadar Port, are considered a destiny-changer in the region and world, contributing to the economic prosperity of the country through modernization of the industrial sector.
Dr. Attaullah Shah’s research “Catalysing Growth—Industrial and Technological Advancements under CPEC” focuses on the second phase of CPEC (2021-2025), which shifts towards industrial development and establishing Special Economic Zones (SEZs). This phase aims to attract both local and foreign investments, foster industrial growth, and create jobs. Innovation and sustainability are key pillars of this phase, with plans to develop an innovation corridor to position Pakistan as a leader in technological advancements within the region.
The establishment of SEZs is ongoing across Pakistan, expected to generate employment, promote technology transfer, and boost Pakistan’s manufacturing sector. The success of SEZs in Pakistan is based on robust governance, consistent policies, and enhanced security measures. The primary Key Performance Indicator (KPI) for mutual development and growth is the execution pace of CPEC’s second phase. It focuses not only on tangible industrialization and socio-economic development in Pakistan but also on sharing Chinese development knowledge and experience with Pakistan.
Ⅲ. China Pakistan Economic Corridor Enhances Environmental sustainability
The research by Prof Dr. Zahid Anwar and Tanzeel Ur Rehman, “Promoting Environmental Sustainability through Agricultural Development and Tourism Integration under CPEC” highlights the environmental and agricultural aspects of CPEC. While CPEC’s energy projects have significantly alleviated the power crisis, the reliance on coal-fired power plants has raised environmental concerns. Pakistan and China are collaboratively addressing these issues, considering Pakistan’s rich coal reserves and international standards.
In agricultural sector, CPEC aims to improve productivity through technology transfer and modern practices. Through enhanced infrastructure and adopting innovative technologies, Pakistan significantly bolster agricultural productivity, improve rural livelihoods, and ensure sustainable food production amidst prevailing environmental challenges. In addition, the integration of tourism with agriculture is seen as a way to promote environmental sustainability and economic diversification. Agritourism not only supplements farmers’ incomes but also contributes to job creation, preserves cultural heritage, and promotes environmental stewardship through sustainable farming practices.
Environmental sustainability is crucial to ensure the long-term success and positive impacts of CPEC projects. Initially, it underscored the essential consideration of environmental protection in large-scale projects like the CPEC, emphasizing the need for stringent regulations and comprehensive environmental management plans to mitigate potential adverse impacts. Agriculture is a cornerstone of Pakistan’s economy, especially within the CPEC framework. Therefore, by adopting modern, sustainable farming practices and promoting rural development, Pakistan can achieve food security and economic growth without compromising environmental sustainability. Furthermore, integrating agriculture with tourism, particularly through agritourism, offers prospects for job creation and cultural preservation. This form of tourism can enhance local economic development, foster cross-cultural exchanges and promote environmental stewardship.
Ⅳ. China Pakistan Economic Corridor Boosts Regional Connectivity
The study by Dr. Muhammad Munir and Muhammad Abdul Rafay Shaffi “Gateway to Growth- Gwadar Port as the Nexus of Regional Trade and Blue Economy Development,” emphasizes the strategic importance of Gwadar Port in CPEC. Gwadar Port, located in Balochistan, is one of the world’s most strategic deep-sea ports, holding vital importance for both Pakistan and China. Positioned near the Strait of Hormuz, a critical route for global oil trade, the port offers significant potential for regional and international trade, linking Pakistan with key regions like the Middle East, Central Asia, and Africa. Its strategic location could transform Pakistan’s blue economy by enhancing connectivity and boosting trade.
Gwadar port, different from ports, is poised to impact the regional trade dynamics once fully developed. This deep warm water seaport in Pakistan can effectively serve for transshipment, warehousing, sea trade, to the management of commercial and industrial level accommodate for alien import and export trade, particularly with Afghanistan, Oman, United Arab Emirates, Saudi Arabia, Qatar, China, and Central Asian Republics. Additionally, the port of Gwadar will provide China with the opportunity to flourish in the regional and global markets.
However, Gwadar Port remains underutilized due to challenges such as security issues, inadequate infrastructure, and its distance from major markets. To unlock its full potential, Pakistan must address these obstacles and invest in the sustainable development of its deep-sea resources. This would enable Pakistan to capitalize on the port’s economic and trade opportunities fully.
Ⅴ. China Pakistan Economic Corridor Accelerates Human Development
Dr. Abdul Sattar’s research “CPEC and Human Development in Pakistan: A Descriptive Analysis” explores the impact of CPEC on Pakistan’s socio-economic development.
CPEC’s focus extends beyond hardware infrastructure to include soft power projects in education, healthcare, and skill development. Through knowledge sharing and capacity building, CPEC aims to enhance Pakistan’s human capital. Specific measures include establishing vocational training centers, providing scholarship opportunities, and improving medical facilities. These initiatives contribute to improving Pakistan’s Human Development Index.
The human development aspect of CPEC includes projects aimed at poverty alleviation, job creation, and improving living standards. Educational exchanges between Chinese and Pakistani institutions are fostering a new generation of skilled professionals capable of driving Pakistan’s economic growth.
Conclusion
Over the past decade, CPEC has significantly contributed to Pakistan’s progress in human development, energy production, IT exports, and agricultural efficiency. The next phase holds further potential in sectors such as coastal tourism, the blue economy, and the creation of modern Special Economic Zones (SEZs), which will attract both local and foreign investment, especially from China.
Specific recommendations include:
- Enhancing transparency and policy consistency to maintain public trust and foster long-term growth by ensuring stability and openness in CPEC’s governance.
- Improving security measures to protect projects and personnel from potential threats through better coordination and deployment of skilled security forces.
- Focusing on environmental sustainability, especially given Pakistan’s vulnerability to climate change. Collaborative efforts should aim to incorporate clean and green technologies, ensuring that industrial growth aligns with environmental preservation.
- Promoting industrial cooperation and inclusive development by focusing on the establishment of SEZs and strengthening indigenous manufacturing capacities through technology transfer, which will create opportunities for local industries and communities.
- Diversifying investment into underdeveloped sectors like agriculture, tourism, and mining, and encouraging the growth of small and medium enterprises (SMEs) to stimulate local entrepreneurship and innovation.
- Strengthening regional connectivity with Central Asian countries and ensuring peace in Afghanistan to boost trade and broaden market access.
Looking ahead, the success of CPEC’s second decade will depend on achieving these objectives through strong bilateral collaboration, robust governance, and a commitment to inclusive, sustainable development. By fostering innovation, ensuring environmental responsibility, and expanding regional ties, CPEC can continue to serve as a powerful engine for Pakistan’s economic and social transformation. Both nations can look forward to a future marked by prosperity and shared growth.
(The research is under the Project ACCWS of Knowledge Sharing and conducted by Institute of Peace and Diplomatic Studies, Islamabad, Pakistan)
