New framework for China-Pakistan cooperation

By Masood Khalid | China Daily | Updated: 2019-03-04 08:26

The first phase of the China-Pakistan Economic Corridor has progressed well, now both countries are working to chart a course so it can realize its full potential

The China-Pakistan Economic Corridor (CPEC), which is a flagship project of the Belt and Road Initiative, is an economic partnership project with the potential to transform Pakistan into a geoeconomic hub. Upon completion, the CPEC will optimize Pakistan's geographical position at the crossroad of Central Asia, the Middle East and South Asia. The CPEC aims to connect Kashgar in the Xinjiang Uygur autonomous region to Pakistan's seaports of Gwadar and Karachi via a road and rail network stretching over 2,700 kilometers. Along the route, industrial parks, logistics centers and special economic zones are to be built.

Since its inception, the CPEC has made great progress. Tangible progress has been made in priority areas such as Gwadar Port, infrastructure, energy projects, industrial parks and special economic zones. Over the past five years, 11 projects have been completed under the CPEC, and 11 are in the construction stage. The total investment of these 22 projects is about $18.9 billion, and 20 more projects are in the pipeline.

In the energy sector, there are around 21 projects. A total of 15 prioritized energy projects will add around 11,110 MW of energy into the national grid. Seven energy projects have been completed and six are under construction. CPEC energy projects include hydro, solar and coal-fired power plants. The major coal-based projects are based on supercritical technology.

Among infrastructure projects, there are two big road projects: the KKH Phase-II (118 km), and Peshawar-Karachi Motorway (Multan-Sukhur Section, 392 km), which are in the completion phase. Both sides are also working on details of a dry port at Havelian, the upgrading of 1,872 km of existing railways, also called the Main Line-I or ML-I, and the Karachi Circular Railway. A 27-km urban mass transit system in Lahore will also be completed this year. These projects account for $5.87 billion of the preferential loans from China.

In addition to building the Gwadar Port, there are different auxiliary projects. The Gwadar East Bay Expressway and the Gwadar Port Free Zone are in implementation phase and Phase-I of Gwadar Port Free Zone has been completed. Around 30 companies have committed investment of $400 million in the Free Zone.

Further, the New Gwadar International Airport, Gwadar Friendship Hospital and Gwadar Technical and Vocational Institute are expected to be launched this year. In Sept 2016, a China-Pakistan Friendship School was established in Gwadar, which accommodates around 500 students. China is also providing a large number of scholarships to Pakistani students, and around 25,000 are currently studying in China. Both countries have also established links in the fields of science, technology and education.

In economic ties, both sides have identified nine special economic zones under the CPEC. Three of them, the Rashakai Economic Zone, Dhabeji Economic Zone and Faisalabad M-3 Economic Zone, are at advanced stage and expected to be launched this year. These economic zones are an important part of the second phase of the CPEC that will lead to industrial relocation and development, job creation and skills development in Pakistan, and they lay a good business foundation for small and medium-sized Chinese enterprises.

Additionally, a cross-border fiber optics project with a total length of 820 km has already been completed. China will also set up six poverty alleviation demonstration zones in Pakistan as part of their socioeconomic development and poverty alleviation cooperation. Both sides have also established frameworks for cooperation in fields such as agriculture, industry, oil and gas as well as education.

The CPEC projects have already realized Chinese investments and are creating local jobs in Pakistan. China has become the largest trading partner of Pakistan and the biggest source of foreign direct investment, and the bilateral trade crossed $20 billion last year.

It is important to note that the development trajectory of the CPEC fully dovetails with local conditions and requirements. Five years ago, Pakistan was an energy and investment deficient country. With the CPEC, and in a short span of time, we have been able to meet the investment gap to generate energy, build infrastructure and create jobs. Energy generation and infrastructure building have played an important role in starting economic activity in Pakistan, paving the way for the industrialization that it needed.

Now both countries are working closely for the timely completion of the agreed projects and working to chart a course to realize the full potential of the CPEC. This phase will have greater focus on socioeconomic development, job creation and people's livelihoods. For that purpose, both countries have outlined socioeconomic development and poverty alleviation, industrial development and agriculture cooperation as the priority areas.

How did the CPEC make such progress and achieve such tangible outcomes in a short period of time? One, because the CPEC is based on the spirit of win-win cooperation and shared benefits. It is in the interests of both countries to develop the CPEC, enhance connectivity and promote trade. Two, the CPEC is an open, inclusive and transparent economic partnership project. It is not directed at any third party or third country. Three, our approach is based on mutual respect, consultations and cooperation. Pakistan and China are good neighbors, good friends and good partners. Both sides are guided by the spirit of mutual understanding and cooperation. Last, it is a futuristic and forward-looking initiative.

As mentioned earlier, in its first phase, the CPEC focused on the priority areas of infrastructure, energy and port building. As the Belt and Road Initiative moves ahead, the need for a comprehensive framework for third-party cooperation will further increase. More emphasis will be laid on environmentally friendly, sustainable development.

The Belt and Road Initiative is creating its own norms of global cooperation in addition to the existing global norms and laws of participating countries. There is a need to further strengthen policy coordination, improve financial integration, streamline the legal apparatus, enhance people-to-people bonds and boost regional connectivity.

The author is the ambassador of the Islamic Republic of Pakistan in Beijing. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.