China–Pakistan Economic Corridor ( CPEC )

China–Pakistan Economic Corridor - Introduction

China–Pakistan Economic Corridor ( CPEC )
‘China Pakistan Economic Corridor’ has been celebrated as the game-changer project, spear- headed by China which was hailed as the harbinger of economic prosperity to the impoverished Pakistan. The Chinese investment plan for an economic Corridor from Kashgar through Gilgit- Baltistan to Gwadar, promised twice as much FDI that Pakistan had received since 2008. There was a military- political consensus on the CPEC.
However, in their exuberance to launch the ambitious project, the Pakistani government failed to read the fine print nor do their math. They did not factor in that the billions the Chinese were going to pump into Pakistan was about 20% of Pakistan’s $270 billion dollar economy which may hold the Pakistan in captivity in the coming days. Besides, by 2030 Pakistan would have to pay back $90 billion and this would be an additional burden on the state.

The stalled Bhash a – Diamer Dam Project

Both the World Bank and the ADB had refused to fund this project without a ’No Objection Certificate’ from India. As expected Pakistan refused to approach India. Naturally Pakistan turned to their big brother China in May 2015, for financial assistance and Beijing agreed to back up the Dam project, after it had languished for 15 years. However China wanted its pound of flesh from this deal. There were preconditions about ownership, maintenance costs and collateral security. Apparently these conditions were unacceptable to Pakistan. This turn of events marks the first chink in the CPEC, a far cry from the euphoria seen two years ago.
In November 2017,pakistan announced the withdrawal of Bhasha Diamer Dam project from the ambit of CPEC, causing quite a stir in the Pakistan political scenario.
Major Benefits of China from CPEC
In April 2015,’ Chinese President Xi Jinping’ announced the mega project CPEC – a $ 46 Billion proposal fully sponsored by China during his visit to Pakistan, a total which was increased later. The mega- project covered energy and infrastructure development which has the potential to lift up the sagging economy of Pakistan. The project is an important link to their grandiose ‘Belt Road Initiative.’ The most important achievement of China, is access to Gwadar for obvious geo -strategic and economic reasons. The development of Gwadar and the infrastructure projects of road and rail linkages across the country, are the glamorous aspects of the projects.
Another important aim of China is to establish a security and communication grid all over Pakistan. A fibre optic link between Pakistan and China that covers the entire country and reaches Gwadar is now part of CPEC. In fact China sees it as a transmission-carrier, which would enable the Chinese to popularise their culture and exercise command and control over the region. The corridor passes through the restive Balochistan and the Khyber-Pakhtunkhwa provinces. There are security issues and the Pakistan Army has deployed two special security divisions to protect the Chinese labour employed there and the construction equipments all the way from Gwadar to Rawalpindi and Khunjerab. When the plan speaks of joint efforts against terrorists, the Chinese have the Uyghurs in mind, not just protection of their own enterprises and labour in Pakistan.
The third aim is establishing control over Pakistan’s agri cultural land for feeding its impoverished Kashgar district of Xinjiang. Thousands of acres of agricultural land will be leased out to Chinese companies for cultivation and agronomy.Work on these lines are progressing in a war footing.


Pakistan government has given Chinese firms a number of tax concessions across the entire CPEC projects as compensation for working in troubled zones. The Chinese will have industrial parks or special exclusive economic zones that should meet specific conditions with a perfect infrastructure for their investment and projects with Chinese employees.
The Chinese endeavour could b e to manage a very dependent Pakistan that provides access to a deep-water port in the Arabian Sea which opens a gateway to international trade. Also an opportunity to outflank a rival in South Asia. However some Pakistani parliamentarians fear that CPEC could mark the arrival of another ‘East India Company’, which ultimately engulfed the Indian Sub-Continent.

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