ChinaPakistan Economic Corridor

ChinaPakistan Economic Corridor (Chinese: -; Urdu: -

China Pakistan Economic
; also known by the acronym CPEC) is a collection of infrastructure
Corridor
projects that are currently under construction throughout Pakistan.[2] Originally
valued at $46 billion, the value of CPEC projects is now worth $62 billion.[3][4][5]
CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its
economy by the construction of modern transportation networks, numerous energy
projects, and special economic zones.[6][7][4][5] On 13 November 2016, CPEC
became partly operational when Chinese cargo was transported overland to Gwadar
Port for onward maritime shipment toAfrica and West Asia.[8]

A vast network of highways and railways are to be built under the aegis of CPEC
that will span the length and breadth of Pakistan. Inefficiencies stemming from
Pakistan's mostly dilapidated transportation network are estimated by the
government to cause a loss of 3.5% of the country's annual gross domestic
product.[9] Modern transportation networks built under CPEC will link seaports in
Road network CPEC
Gwadar and Karachi with northern Pakistan, as well as points further north in
Type of Economic corridor
western China and Central Asia.[10] A 1,100 kilometre long motorway will be built
project
between the cities of Karachi and Lahore as part of CPEC,[11] while the Karakoram
Highway between Rawalpindi and the Chinese border will be completely Products Roadways, railways,
reconstructed and overhauled.[12] The KarachiPeshawar main railway line will also Special Economic
be upgraded to allow for train travel at up to 160 km per hour by December Zones, energy
2019.[13][14] Pakistan's railway network will also be extended to eventually connect production, mass
to China's Southern Xinjiang Railway in Kashgar.[15] The estimated $11 billion transit
required to modernise transportation networks will be financed by subsidized Location Pakistan: Baluchistan,
concessionary loans.[16] Gilgit-Baltistan,
Khyber Pakhtunkhwa,
Over $33 billion worth of energy infrastructure are to be constructed by private
Punjab, Sindh
consortia to help alleviate Pakistan's chronic energy shortages,[17] which regularly
China: Xinjiang
amount to over 4,500MW,[18] and have shed an estimated 22.5% off Pakistan's
annual gross domestic product.[19] Over 10,400MW of energy generating capacity is
Owner Public and private
to be brought online by the end of 2018, with the majority developed as part of
sector
CPEC's fast-tracked "Early Harvest" projects.[20] A network of pipelines to transport Country People's Republic of
liquefied natural gas and oil will also be laid as part of the project, including a China
$2.5 billion pipeline between Gwadar and Nawabshah to eventually transport gas Pakistan
from Iran.[21] Electricity from these projects will primarily be generated from fossil Key people Nawaz Sharif Li
fuels, though hydroelectric and wind-power projects are also included, as is the Keqiang
construction of one of the world's largest solar farms.[22] Hu Jintao
Xi Jinping
CPEC's potential impact on Pakistan has been likened to that of the Marshall Plan
undertaken by the United States in post-war Europe.[23][24][25][26] Pakistani officials Established 22 May 2013
predict that CPEC will result in the creation of upwards of 2.3 million jobs between Budget $62 billion USD[1]
20152030, and add 2 to 2.5 percentage points to the country's annual economic Status Partly operational
growth.[27] Were all the planned projects to be implemented, the value of those
Website cpec.gov.pk
projects would be roughly equivalent to all foreign direct investment in Pakistan
since 1970,[12] and would be equal to 17% of Pakistan's 2015 gross domestic External video
product.[28] CPEC is seen as the main plank of Chinese President Xi Jinping's Belt
and Road Initiative.[29] As the CPEC project rapidly takes shape, China Pak China Reaches Out to Pakistan
Investment Corporation (CPIC) will be investing upwards of $500 Million for a first With Massive Economic Plan.
of its kind, mixed-used, sustainable development. Spread over 3.6 million square
foot of space, it would be a state-of-the-art, prime gated community, located minutes away from the Gwadar port. China Pak Hills
will be providing the local and expatriate working professionals with an unique lifestyle to work and play [30]
in.

Contents
1 History
1.1 Background
1.2 Announcement of CPEC
1.3 Subsequent developments
2 Projects in Gwadar Port and City
2.1 Gwadar Port Complex
2.2 Projects in Gwadar city
3 Roadway projects
3.1 Karakoram Highway
3.2 Eastern Alignment
3.3 Western Alignment
3.4 Associated roadway projects
3.4.1 ADB funded projects
3.4.2 Future Central Alignment

4 Railway projects
4.1 Main Line 1
4.2 Main Line 2
4.3 Main Line 3
4.4 Lahore Metro
4.5 Khunjerab Railway
5 Energy sector projects
5.1 Renewable-energy
5.2 Coal
5.2.1 Balochistan
5.2.2 Punjab
5.2.3 Sindh
5.3 Liquified natural gas
5.4 "Early Harvest" projects
5.4.1 Table of projects

6 Other areas of cooperation

6.1 Agriculture
6.2 Science and technology
6.3 Other fields
7 Finance
7.1 Concessionary loans
7.2 Interest-free loans
7.3 Private consortia
7.4 ADB assistance
8 Impact
8.1 Pakistani economy
8.2 CPEC and the "Malacca Dilemma"
8.3 Access to western China
8.4 Route to circumvent Afghanistan
 8.5 Alternate route to Central Asia
8.6 Comparison to Chabahar Port
8.6.1 Security Issues

9 Security
9.1 Security Forces
9.2 Baloch militants
9.3 Islamist militants
9.4 Indian Subversion Attempts
10 Criticism and miscellaneous issues
10.1 KPK Provincial Assembly
10.2 Finances
10.3 Trade imbalance
10.4 Baloch Nationalists
10.5 Gwadar residents' concerns
10.6 Indian objections
10.6.1 Sovereignty claims
10.6.2 Encirclement fears

11 List of major projects

12 See also
13 References
13.1 Notes
13.2 Citations
14 External links

History

Background
Plans for a corridor stretching from the Chinese border to Pakistan's deep water ports
on the Arabian Sea date back to the 1950s, and motivated construction of the
Karakoram Highway beginning in 1959.[31] Chinese interest in Pakistan's deep-
water harbour at Gwadar had been rekindled by 1998 and in 2002 China began
construction at Gwadar port which was completed in 2006. Expansion of Gwadar
Port then ceased thereafter owing to political instability in Pakistan following the fall
of General Pervez Musharraf and subsequent conflict between the Pakistani state
and Taliban militants.[32]
Zardari, Li and Khoso on 22 May
A blockade of the Strait of Malacca by the United States and its allies would cut
2013 in Islamabad
China off from Middle East oil supplies and from its "Second Continent" Africa.
That's why China is shoring up Sri Lanka's major ports and working feverishly with
.[33]
Pakistan to build an alternative route to Middle East and Africa: the ChinaPakistan Economic Corridor

The current form of the project was first proposed by Pakistan Peoples Party. Asif Ali Zardari invited heads of all the political parties
to a Luncheon in honour of the Chinese Premier Li Keqiang at the Aiwan-e-Sadr on 22 May 2013.[34] Chinese Premier Li Keqiang
and the Pakistani President Asif Ali Zardari have agreed to build an economic corridor between the two countries.

Both sides have decided to further enhance mutual connectivity and both sides are connected to develop the long term plan for a
China-Pakistan economic corridor.[34]
President Asif Ali Zardari and Chinese Premier Li Keqiang witnessed the signing
ceremony as the representatives of the two countries inked the documents at a
ceremony held at the Aiwan-e-Sadr. The visit of Chinese Premier Li Keqiang
marked the signing of important documents aimed at long-term cooperation between
the two countries in multiple areas.

The MoU on Maritime Cooperation between the two governments, an Agreement on

Boundary Management System between China's Xinjiang and Gilgit-Baltistan area, President Asif Ali Zardari and
and another Agreement on Border Ports and their Management System was signed Chinese Premier Li Keqiang
witnessed the signing ceremon of
by Chinese Foreign Minister Wang Yi and Pakistan's Foreign Secretary Jalil Abbas
CPEC
Jilani.

The MoU on cooperation for long-term plan on ChinaPakistan Economic Corridor

between the two governments was inked by Xu Shao Shi, Chairman National Development and Reform Commission, China and
Shahid Amjad Chaudhry, Advisor to the Prime Minister.[35]

In February 2014, Pakistani President Mamnoon Hussain visited China to discuss the plans for an economic corridor in Pakistan.[36]
Two months later, Pakistan Prime Minister Nawaz Sharif met with Premier Li Kequiang in China to discuss further plans,[37]
resulting in the full scope of the project to be devised under Sharif's tenure.[38] In November 2014, Chinese government announced
its intention to finance Chinese companies as part of its $45.6 billion ener
gy and infrastructure projects in Pakistan as part of CPEC.

Announcement of CPEC
During the state visit of Xi Jinping to Pakistan in April 2015, he wrote in an open CPEC will be a
editorial stating: "This will be my first trip to Pakistan, but I feel as if I am going to
visit the home of my own brother." On 20 April 2015, Pakistan and China signed an strategic
gamechanger in the
region, which would
agreement to commence work on the $46 billion agreement, which is roughly 20%
go a long way in
of Pakistan's annual GDP,[40] with approximately $28 billion worth of fast-tracked
making Pakistan a
"Early Harvest" projects to be developed by the end of 2018.[41] As a gesture of

richer and stronger
friendship, the Pakistani capital at that time was dotted with slogans and signboards entity than ever
such as "Pakistan-China friendship is higher than the mountains, deeper than the before.
oceans, sweeter than honey, and stronger than steel"[42] an oft repeated phrase
Firstpost (India) April 22, 2015[39]
coined by the Chinese to describe their deep ties to Pakistan.

Subsequent developments
On 12 August 2015 in the city of Karamay, China and Pakistan signed 20 more agreements worth $1.6 billion to further augment the
scale and scope of CPEC.[43] Details of the plan are opaque,[44] but are said to mainly focus on increasing energy generation
capacity.[45] As part of the agreement, Pakistan and China have agreed to co-operate in the field of
space research.[46]

In September and October 2015, the government of the United Kingdom announced two separate grants to the Government of
Pakistan for construction of roadways that are complementary to CPEC.[47][48] In November 2015, China included the CPEC into its
13th five-year development plan,[49] while in December 2015, China and Pakistan agreed on a further $1.5 billion investment to set
up an information and technology park as part of the CPEC project.[50] On 8 April 2016, during the visit of Xinjiang's Communist
Party chief Zhang Chunxian companies from Xinjiang with their Pakistan counterparts signed $2 billion of additional agreements
covering infrastructure, solar power and logistics.[51]

The first convoy from China, carrying almost 250 containers meant for export to ports in Bangladesh, Sri Lanka, the UAE and the
EU arrived in Gwadar on November 13, 2016, thereby formalizing operation of CPEC.[52] On December 2, 2016, the first cargo
train, launching the direct rail route and sea freight service between China and Pakistan, departed from Yunnan. A cargo train loaded
with 500 tonnes of commodities left Kunming for the port city of Guangzhou from where the cargo will be loaded on ships and
transported to Karachi, marking the opening of the new route.[53] The new rail, sea freight will cut logistics cost, including that of
transport, by 50 per cent.[54]

In November 2016, China announced an additional $8.5 billion investment in Pakistan with $4.5 billion allocated to upgrade
Pakistan's main railway line from Karachi to Peshawar including tracks, speed and signalling, and $4 billion toward an LNG terminal
and transmission lines to help alleviate energy shortages.[55] In February 2017, the Egyptian Ambassador to Pakistan expressed
interested in CPEC cooperation.[56] In January 2017, the Chief Minister Pervez Khattak of Khyber Pakthunkhwha stated that he had
received assurances from Chinese investment companies that they would invest up to $20 billion for projects.[57] In March 2017, an
agreement was signed for the projects which include: a $1.5 bn oil refinery
, irrigation projects worth $2 billion, a $2 billion motorway
between Chitral and DI Khan, and $7 billion worth of hydro-electric projects. From the initial value of $46-billion, China is going to
invest $33.79 billion in energy sector of Pakistan to curb the energy short-fall in the country which has now become one of the main
reasons of economic descent. $11.19 billion would be spent in transport sector including 1,240 km Karachi-Lahore motorway which
is a six lane high speed corridor and orchestrating upgrades to public transportation, including metro and bus service, in six cities,
including Lahore Karachi and Rawalpindi. Modernizing the Karakoram Highway, which runs 1,300 km from Kashgar, the ancient
Silk Road crossing in Sinkiang, all the way into the heart of Punjab, Pakistan's biggest province, will also prove critical. $44 million
fiber optics will be installed linking Sinkiang and Rawalpindi. $0.66 billion will be spent on the up-gradation of Gawadar port to be
fully operational for CPEC. In 2016, China's aid exceeded the American spending, which has total $31 billion since 2002. CPEC is
crucial for both, Pakistan and China, countries. According to Pakistan Economic Survey 201415, the trade between Pakistan and
China has increased to $16-billion which has increased 10% from fiscal year 200910 to 201415. CPEC is 3,218 km lengthy route
that will be completed in the first phase of this mega project, embodied by highways, railways and pipelines. The much advertised
$46-billion economic route goes through the stunning Gilgit-Baltistan Province in north of the country which connects Kashgar in
China's Western Province Sinkiang to the rest of the world through the Chinese operated Gwadar Port in South. The mega project has
kept the hopes alive of elevating the economy and eliminating Pakistan's energy crisis. It can be said that if CPEC is materialized
according to the plan, it would exceed all the foreign direct investment in Pakistan since 1970 and would be equivalent to the 17-
percent of 2015's gross direct product. It is further estimated that CPEC would produce 700,000 direct jobs to the youth of Pakistan in
different projects during the period of 2015 30 and add up to 2.5 percent points to the country's growth rate. CPEC will provide the
opportunity of immense economic ascend not only for Pakistan but will link China to the markets of Asia, Europe and Africa. Eighty
percent of China's oil comes from Persian Gulf, through Strait of Malacca, to Shanghai. It takes 23 months to cover the distance of
more than 16,000 km. If Gwadar becomes operational, it would reduce the distance to 5,000 km. All is going well on its track since
its inception in 2013, Chashma-I, Chashma-ll nuclear power plants in Karachi, Karot hydropower project of 720 megawatt will be
generated on Jhehlum River in Rawalpindi. Out of 21 agreements of energy including coal, gas and solar power plants 14 will be
able to produce 10,400 megawatts of energy by March 2018. It is worth mentioning that Pakistan's chronic energy short-fall is of
4,500 mega-watts which is shedding 22.5% of GDP annually. So it would bolster the energy sector by more than double of short-
fall.[58]

.[29]
As of September 2017, more than $14 billion has been spent on the project so far

Projects in Gwadar Port and City

Gwadar forms the crux of the CPEC project, as it is envisaged to be the link between China's ambitious One Belt, One Road project,
and its Maritime Silk Road project.[59] In total, more than $1 billion worth of projects are to be developed around the port of Gwadar
by December 2017.

Gwadar Port Complex

Initial infrastructure works at Gwadar Port commenced in 2002 and were completed in 2007,[32] however plans to upgrade and
expand Gwadar's port stalled. Under CPEC agreement, Gwadar Port will initially be expanded and upgraded to allow for docking of
larger ships with deadweight tonnage of up to 70,000.[60] Improvement plans also include construction of a $130 million breakwater

[61]
around the port,[61] as well as the construction of a floating liquefied natural gas
facility that will have a capacity of 500 million cubic feet of liquefied natural gas per
day and will be connected to the Gwadar-Nawabshah segment of the IranPakistan
gas pipeline.[62]

The expanded port is located near a 2,282-acre free trade area in Gwadar which is
being modelled on the lines of theSpecial Economic Zones of China.[63] The swathe
of land was handed to the China Overseas Port Holding Company in November
2015 as part of a 43-year lease.[64] The site will include manufacturing zones,
logistics hubs, warehouses, and display centres.[65] Businesses located in the zone Gwadar Port has been operational
would be exempt from customs authorities as well as many provincial and federal since 2007.
taxes.[60] Business established in the special economic zone will be exempt from
Pakistani income, sales, and federal excise taxes for 23 years.[66] Contractors and
subcontractors associated with China Overseas Port Holding Company will be
exempted from such taxes for 20 years,[67] while a 40-year tax holiday will be
granted for imports of equipment, materials, plant/machinery, appliances and
accessories that are to be for construction of Gwadar Port and special economic
zone.[68]

The special economic zone will be completed in three phases. By 2025, it is

envisaged that manufacturing and processing industries will be developed, while A view of the Gwadar Promontory
further expansion of the zone is intended to be complete by 2030.[32] On 10 April and isthmus.
2016, Zhang Baozhong, chairman of China Overseas Port Holding Company said in
a conversation with The Washington Post that his company planned to spend
$4.5 billion on roads, power, hotels and other infrastructure for the industrial zone as well as otherprojects in Gwadar city.[27]

Projects in Gwadar city

China will grant Pakistan $230 million to construct a new international airport in Gwadar which is to be operational by December
2017.[69] The provincial government of Balochistan has set aside 4000 acres for the construction of the new $230 million Gwadar
International Airport which will require an estimated 30 months for construction,[70] the costs of which are to be fully funded by
.[71]
grants from the Chinese government which Pakistan will not be obliged to repay

The city of Gwadar is further being developed by the construction of a 300MW coal power plant, a desalinisation plant, and a new
300 bed hospital.[72] Plans for Gwadar city also include construction of the East Bay Expressway a 19 kilometre controlled-access
road that will connect Gwadar Port to the Makran Coastal Highway.[73] These additional projects are estimated to cost $800 million,
and are to be financed by 0% interest loans extended by theExim Bank of China to Pakistan.[72]

In addition to the aforementioned infrastructure works, the Pakistani government announced in September 2015 its intention to
establish a training institute named Pak-China Technical and Vocational Institute at Gwadar,[32] which is to be developed by the
Gwadar Port Authority.[74] The institute is to be completed by March 2016 at the cost of 943 million rupees,[32] and is designed to
[32]
impart to local residents the skills required to operate and work at the expanded Gwadar Port.

Roadway projects
The CPEC project envisages major upgrades and overhauls to Pakistan's transportation infrastructure. Under the CPEC project, China
has announced financing for $10.63 billion worth of transportation infrastructure so far; $6.1 billion have been allocated for
[75] The remainder of funds will be allocated when the
constructing "Early Harvest" roadway projects at an interest rate of 1.6 percent.
Pakistani government awards contracts for construction of road segments which are still in the planning phase.
Three corridors have been identified for cargo transport: the Eastern
Alignment though the heavily populated provinces of Sindh and Punjab where
most industries are located, the Western Alignment through the less developed
and more sparsely populated provinces of Khyber Pakhtunkhwa and
Balochistan, and the future Central Alignment which will pass through Khyber
Pakhtunkhwa, Punjab, and Balochistan.[76]

Karakoram Highway
The CPEC projects call for reconstruction and upgrade works on National
Highway 35 (N-35), which forms the Pakistani portion of the Karakoram A map of the CPEC roadway network.

Highway (KKH). The KKH spans the 887 kilometre long distance between the
China-Pakistan border and the town of Burhan, near Hasan Abdal. At Burhan,
the existing M1 motorway will intersect the N-35 at the Shah Maqsood
Interchange. From there, access onwards to Islamabad and Lahore continues as
part of the existing M1 and M2 motorways. Burhan will also be at intersection
of the Eastern Alignment, and Western Alignment.

Upgrades to the 487 kilometer long section between Burhan and Raikot of the
Karakoram Highway are officially referred to in Pakistan as the Karakoram
Highway Phase 2 project. At the southern end of the N-35, works are already
underway to construct a 59-kilometer-long, 4-lane controlled-access highway
between Burhan and Havelian which upon completion will be officially Highlighted in red is the route ofNational
referred to as the E-35 expressway.[77] North of Havelian, the next 66 Highway 35, which is to be completely
kilometres of road will be upgraded to a 4-lane dual carriageway between rebuilt and upgraded under the CPEC
agreement. Highlighted in blue is the 175
Havelian and Shinkiari,[78] Groundbreaking on this portion commenced in
kilometre road betweenGilgit and Skardu
April 2016.[79]
which is to be upgraded to a 4-lane
highway.
The entire 354 kilometres of roadway north of Shinkiari and ending in Raikot,
near Chilas will be constructed as a 2-lane highway.[79] Construction on the
first section between Shinkiari and Thakot commenced in April 2016 jointly
with construction of the Havelian to Shinkiari 4-lane dual carriageway further
south.[80] Construction on both these sections is expected to be completed with
42 months at a cost of approximately $1.26 billion with 90% of funding to
come from China's EXIM bank in the form of low interest rate concessional
loans.[80][81][82]

Between Thakot and Raikot spans an area in which the government of Pakistan
is currently either planning or actively constructing several hydropower
projects, most notably theDiamer-Bhasha Dam and Dasu Dam. Sections of the China and Pakistan already conduct trade
N-35 around these projects will be completely rebuilt in tandem with dam via the Karakoram Highway.

construction.[83] In the interim, this section of the N-35 is currently being

upgraded from its current state until dam construction commences in full force
at a later date. Improvement projects on this section are expected to be completed by January 2017 at a cost of approximately
$72 million.[84][85] The next 335 kilometres of roadway connect Raikot to the China-Pakistan border. Reconstruction works on this
section of roadway preceded the CPEC, and were initiated after severe damage to roadways in the area following the 2010 Pakistan
[86]
floods. Most of this section of roadway was completed in September 2012 at a cost of $510 million.

A large earthquake rocked the region nearest to the China-Pakistan border in 2010, triggering massive landslides which dammed the
Indus River, resulting in the formation of the Attabad Lake. Portions of the Karakoram Highway were submerged in the lake, forcing
all vehicular traffic onto barges to traverse the new reservoir. Construction on a 24 kilometre series of bridges and tunnels to Attabad
Lake began in 2012 and required 36 months for completion. The bypass consists of 2 large bridges and 5 kilometres worth of tunnels
that were inaugurated for public use on 14 September 2015 at a cost of $275 million.[87][88] The 175 kilometre road between Gilgit
[89][90]
and Skardu will be upgraded to a 4-lane road at a cost of $475 million to provide direct access to Skardu from the N-35.

Eastern Alignment
The term Eastern Alignment of CPEC refers to roadway projects located in Sindh and Punjab provinces - some of which were first
envisioned in 1991.[91] As part of the Eastern Alignment, a 1,152 km long motorway will connect Pakistan's two largest cities,
Karachi and Lahore with 4 to 6-lane controlled access highway designed for travel speeds up to 120 kilometres per hour.[92] The
entire project will cost approximately $6.6 billion, with the bulk of financing to be distributed by various Chinese state-owned
banks.[93]

The entire Eastern Alignment motorway project is divided into four sections: a 136 kilometre long section between Karachi and
Hyderabad also known as the M9 motorway, a 296 kilometre long section between Hyderabad and Sukkur, a 387 kilometre long
section between Sukkur and Multan, and a 333 kilometre section between Multan and Lahore via the town ofAbdul Hakeem.[94]

The first section of the project will provide high speed road access from the Port of Karachi to the city of Hyderabad and interior
Sindh. Upgrade and construction works on this section currently known as Super Highway between Karachi and Hyderabad began in
March 2015, and will convert the road into the 4-lane controlled access M9 Motorway which will be completed in an estimated 30
months.[95] In February 2017, a completed 75 kilometre stretch of the motorway was opened for public use by Prime Minister Nawaz
Sharif.[96]

At the terminus of the M9 motorway in Hyderabad, the Karachi-Lahore Motorway will continue onwards to Sukkur as a six lane
controlled-access motorway known also as M6 motorway that will be 296 kilometers long,[97] The planned cost for this project is
$1.7 billion,[98] and will provide high speed road access to interior Sindh especially near the towns of Matiari, Nawabshah, and
Khairpur. The project will require the construction of seven interchanges, and 25 bridges on the Indus river and irrigation canals.[97]
The planned route of the motorway runs roughly parallel to the existing National Highway and Indus Highway at various portions. In
July 2016, the Pakistani government announced that the project would be open to international bidders on a build-operate-transfer
[98]
basis, with Chinese and South Korean companies expressing interest in the project.

The 392 kilometre Sukkur to Multan section of the motorway is estimated to cost $2.89 billion,[92] with construction works
inaugurated on this section of roadway on May 6, 2016.[99] The road will be a six lane wide controlled access highway,[100] with 11
planned interchanges, 10 rest facilities, 492 underpasses, and 54 bridges along its route.[99] The Pakistani government in January
2016 awarded the contact to build this section to China State Construction Engineering,[92] but final approvals required for
disbursement of funds were not granted by the Government of the People's Republic of China until May 2016.[82][92] 90% of the
project's cost is to be financed by concessionary loans from China, with the remaining 10% to be financed by the government of
Pakistan.[101] Construction on this segment is expected to last 36 months.
[92]

Construction of the portion between Multan and Lahorecosting approximately $1.5 billion[102] was launched in November 2015[103]
as a joint venture between the China Railway Construction Corporation Limited and Pakistan's Zahir Khan and Brothers
Engineers[104] The total length of this motorway section is 333 kilometres; however, the first 102 kilometres of the road between
Khanewal and Abdul Hakeem is designed as part of the M4 Motorway, and is being funded by the Asian Development
Bank.[105][106] The portion of motorway between Abdul Hakeem and Lahore that is under construction as part of CPEC will consist
of the remaining 231 kilometers.[107]

Western Alignment
The CPEC project envisages an expanded and upgraded road network in the Pakistani provinces of Balochistan, Khyber
Pakhtunkhwa, and western Punjab Province as part of the Western Alignment. The Western Alignment project will result in the
upgrading of several hundred kilometres worth of road into 2 and 4-lane divided highways by mid-2018, with land acquisition
sufficient for upgrading parts of the road to a 6-lane motorway in the future.[108] In total, the CPEC project envisages re-construction
of 870 kilometres of road in Balochistan province alone as part of the Western
Alignment. Of those 870 kilometres of road, 620 kilometres have already been
rebuilt as of January 2016.[109]

The Western Alignment roadway network will begin at the Barahma Bahtar
Interchange on the M1 Motorway near the towns of Burhan and Hasan Abdal
in northern Punjab province.[110] The newly reconstructed Karakoram
Highway will connect to the Western Alignment at Burhan, near where the
new 285-kilometre-long controlled-access Brahma Bahtar-Yarik Motorway
will commence.[111] The motorway will terminate near the town of Yarik, just
north of Dera Ismail Khan.[112] Groundbreaking for the project took place on
May 17, 2016.[113] The motorway will traverse the Sindh Sagar Doab region,
and cross the Indus River at Mianwali before entering into Khyber
The Western Alignment of CPEC is
Pakhtunkhwa province. It will consist of 11 interchanges, 74 culverts, and 3
depicted by the red line. The 1,153-
major bridges spanning the Indus, Soan, and Kurram Rivers.[114] Total costs kilometer route will link the Brahma Bahtar
for the project are expected to be $1.05 billion.[115] Interchange of the M1 Motorway with the
city of Gwadar in Balochistan province.
At the southern terminus of the new Brahma Bahtar-Yarik motorway, the N50 The portion depicted by the orange line
National Highway will also be upgraded between Dera Ismail Khan in Khyber between Basima and Shahdadkot is
Pakhtunkhwa and Zhob in neighbouring Balochistan province, with eventual sometimes regarded as part of the
Western Alignment.
reconstruction between Zhob and Quetta.[116] The upgraded roadway will
consist of a 4 lane dual-carriageway spanning the 205 kilometre distance
between the two cities.[117] The first portion of the N50 to be upgraded will be
the 81 kilometre portion of the N50 between Zhob and Mughal Kot, with construction works having begun in January 2016.[118]
Construction on this portion is expected to be completed by 2018 at a cost of $86 million.[116] While the project is considered a vital
link in the CPEC's Western Alignment,[118] the project's cost will not be financed by Chinese state-owned banks, but instead by
Asian Development Bank under a 2014 agreement which preceded CPEC,[119][120] as well as by a grant provided by the United
Kingdom's Department for International Development.[121]

Heading south from Quetta, the Western Alignment of the CPEC will continue to the town of Surab in central Balochistan as the N25
National Highway. From Surab, a 470 kilometre long route known as the N85 National Highway will connect central Balochistan
with the town of Hoshab in southwestern Balochistan province near the city of Turbat. The stretch of road between these cities was
completed in December 2016,[122] as per schedule.[123]

Along the Western Alignment route, the towns of Hoshab and Gwadar are connected by a newly-built 193 kilometre long portion of
the M8 Motorway the Hoshab to Gwadar portion of the motorway was completed and inaugurated in February 2016 by Prime
Minister Nawaz Sharif.[124] The Western Alignment will be flanked by special economic zones along its route,[125] with at least
[108]
seven special economic zones planned to be established in Khyber Pakhtunkhwa.

Associated roadway projects

ADB funded projects

The 184 kilometre long M-4 Motorway between Faisalabad and Multan does not fall under the scope of CPEC projects, but is
nevertheless considered vital to the CPEC transportation project. It will instead be financed by the Asian Development Bank and the
Asian Infrastructure Investment Bank,[105] and will be the first project jointly financed by those banks.[126] Further funding comes
from an additional $90.7 million grant announced in October 2015 by the government of the United Kingdom towards the
[127]
construction of portion of the M4 Motorway project.
The Karakoram Highway south of the city of Mansehra will also be upgrade into a controlled-access highwayto officially be known
as the E-35 expressway. While it is considered to be a crucial part of the route between Gwadar and China, the E35 will not be
financed by CPEC funds. The project will instead be financed by the Asian Development Bank[128] with a $121.6 million grant from
the United Kingdom towards the project.[129] Once completed, the E35 Expressway, the M4 Motorway, and Karachi-Lahore
Motorway will provide continuous high-speed road travel on controlled-access motorways from Mansehra to Karachi 1,550
kilometres away.

Approximately halfway between Zhob and Quetta, the town of Qilla Saifullah in Balochistan lies at the intersection of the N50
National Highway and the N70 National Highway. The two roads form the 447 kilometre route between Quetta and Multan in
southern Punjab. While the N70 project is not officially a part of CPEC, it will connect the CPEC's Western Alignment to the
Karachi-Lahore Motorway at Multan. Reconstruction works on the 126 kilometre portion of the N70 between Qilla Saifullah and
Wagum are slated for completion by 2018,[130] and are financed as part of a $195 million package by the Asian Development
Bank,[120] and by a $72.4 million grant from the United Kingdom'sDepartment for International Development.[121]

Future Central Alignment

Long-term plans for a "Central Alignment" of the CPEC consist of a network of roads which will commence in Gwadar and travel
upcountry via the cities of Basima, Khuzdar, Sukkur, Rajanpur, Layyah, Muzaffargarh, and terminating in Dera Ismail Khan, with
onward connections to Karakoram Highway via theBrahma BahtarYarik Motorway.[131]

Railway projects
The CPEC project emphasises major upgrades to Pakistan's ageing railway
system, including rebuilding of the entire Main Line 1 railway between
Karachi and Peshawar by 2020;[132] this single railway currently handles 70%
of Pakistan Railways traffic.[133] In addition to the Main Line 1 railway,
upgrades and expansions are slated for the Main Line 2 railway, Main Line 3
railway. The CPEC plan also calls for completion of a rail link over the 4,693-
meter high Khunjerab Pass. The railway will provide direct access for Chinese
and East Asian goods to Pakistani seaports at Karachi and Gwadar by
2030.[133]

Procurement of an initial 250 new passenger coaches, and reconstruction of 21

Phase 1 of the ML-1 overhaul and
train stations are also planned as part of the first phase of the project bringing reconstruction is highlighted black
the total investment in Pakistan's railway system to approximately $5 billion between Peshawar and Lahore.
by the end of 2019.[134] 180 of the coaches are to be built at the Pakistan Overhauling and reconstruction of the line
Railways Carriage Factory near Islamabad,[135] while the Government of will allow trains to travel at up to 160
kilometres per hour.
Pakistan intends to procure an additional 800 coaches at a later date, with the
[135]
intention of building 595 of those coaches in Pakistan.

Main Line 1
The CPEC "Early Harvest" plan includes a complete overhaul of the 1,687 kilometre long Main Line 1 railway (ML-1) between
Karachi and Peshawar at a cost of $3.65 billion for the first phase of the project,[75] with the first phase expected to be completed by
December 2017.[136] In June 2016, China and Pakistan unveiled plans for the second phase of the project, with a total cost of $8.2
billion for both phases of the project.[137] The second phase of the ML-1 overhaul project is expected to be completed in 2021.
[137]

Upgrading of the railway line will permit train travel at speeds of 160 kilometres per hour, versus the average 60 to 105 km per hour
speed currently possible on existing track,[138] and is expected to increase Pakistan Railways' annual revenues by approximately
$480 million.[133][139] The upgrades are also expected to cut transit times from Karachi to Peshawar by half.[140] Pakistani railways
currently account for 4% of freight traffic in the country, and upon completion
of CPEC, Pakistani railways are expected to transport 20% of the country's
freight traffic by 2025.[141]

The first part of the expedited first phase of the project will focus on upgrading
the Multan to Peshawar section, which will then be followed by the Hyderabad
[142]
to Multan section, and finally by the Hyderabad to Karachi section.

At the time of CPEC's announcement, the ML-1 consisted of mostly dual track
railway between Karachi, and the Lahore suburb of Shahdara, with long
stretches of single track. From Shahdara, the track mainly consisted of a single
Phase 2 of the ML-1 overhaul between
track until the city Peshawar. Construction works to dualize the entire track Multan and Hyderabad is marked in
between Karachi to Shahdara were completed and inaugurated in January orange. Phase 3 of the project is indicated
2016.[143] As part of the first phase of the CPEC railway project, the by the green line between Hyderabad and
remaining stretch of track between Shahdara and Peshawar is to upgraded to a Karachi.
dual track railway.[144]

The 676 kilometer portion between Lalamusa, north of Lahore, and Peshawar will require complete reconstruction with the addition
of tunnels, culverts, and bridges, while over 900 kilometers south of Lalamusa towards Karachi will be upgraded to handle cars with
a 25-ton axle load capacity.[145] A spur from Taxila to Havelian will also be constructed, with a dry port to be established near the
city of Havelian.[146] Further, the entire length of track will have computerised signal systems, with stretches of track in urban areas
to also be fenced off to prevent pedestrians and vehicles from crossing tracks in unauthorised areas.[147]

Main Line 2
In addition to upgrading the ML-1, the CPEC project also calls for similar
major upgrade on the 1,254 kilometre long Main Line 2 (ML-2) railway
between Kotri in Sindh province, and Attock in northern Punjab province via
the cities of Larkana and Dera Ghazi Khan.[148] The route towards northern
Pakistan roughly parallels the Indus River, as opposed to the ML-1 which
takes a more eastward course towards Lahore. The project also includes a plan
to connect Gwadar, to the town of Jacobabad, Sindh[149] which lies at the
intersection of the ML-2 and ML-3 railways.

Main Line 3
ML-2 of Pakistan Railways is marked in
Medium term plans for the Main Line 3 (ML-3) railway line will also include
purple, while ML-3 is marked in orange.
construction of a 560 kilometer long railway line between Bostan near Quetta,
Other lines are in blue.
to Kotla Jam in Bhakkar District near the city of Dera Ismail Khan,[150] which
will provide access to southern Afghanistan. The railway route will pass
[133]
through the city of Quetta and Zhob before terminating in Kotla Jam, and is expected to be constructed by 2025.

Lahore Metro
The $1.6 billion Orange Line of the Lahore Metro is under construction and is regarded as a commercial project under CPEC.[151]
Construction on the line has already begun, with planned completion by Winter 2017.[152][153] The line will be 27.1-kilometre
(16.8 mi) long, of which 25.4 kilometres (15.8 mi) will be elevated, with the remaining portion to be underground between Jain
Mandir and Lakshmi Chowk.[154] When complete, the project will have the capacity to transport 250,000 commuters per day, with
[155]
plans to increase capacity to 500,000 commuters per day by 2025.
Khunjerab Railway
Longer term projects under CPEC also call for construction of the 682 kilometre
long Khunjerab Railway line between the city of Havelian, to the Khunjerab Pass on
the Chinese border,[150] with extension to China's Lanxin Railway in Kashgar,
Xinjiang. The railway will roughly parallel theKarakoram Highway, and is expected
to be complete in 2030.[133]

The cost of the entire project is estimated to be approximately $12 billion, and will
require 5 years for completion. A 300 million rupee study to establish final The proposed route of theKhunjerab
feasibility of constructing the rail line between Havelian and the Chinese border is Railway is indicated by the brown
already underway.[156] A preliminary feasibility study was completed in 2008 by the line.
Austrian engineering firm TBAC.[157]

Energy sector projects

Pakistan's current energy generating capacity is 24,830 MW,[158] though the country currently faces energy shortfalls of over
4,500MW on a regular basis[18] with routine power cuts of up to 5 hours per day,[19] which has shed an estimated 22.5% off its
annual GDP.[19] Energy generation will be a major focus of the CPEC project, with approximately $33 billion expected to be invested
in this sector.[17] As part of the "Early Harvest" scheme of the CPEC, an estimated 10,400 MW of electricity are slated for generation
[20]
by March 2018 as part of CPEC's "Early Harvest" projects.

The energy projects under CPEC will be constructed by private Independent Power Producers, rather than by the governments of
either China or Pakistan.[159] The Exim Bank of China will finance these private investments at 56% interest rates, while the
[160]
government of Pakistan will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.

Renewable-energy
Pakistan aims to produce 25% of its electricity requirements by renewable energy resources by 2030.[161] China's Zonergy company
will complete construction on the world's largest solar power plant the 6,500 acre Quaid-e-Azam Solar Park near the city of
Bahawalpur with an estimated capacity of 1000MW is expected to be completed in December 2016.[162][163] The first phase of the
project has been completed by Xinjiang SunOasis, and has a generating capacity of 100 MW.[164] The remaining 900 MW capacity
will be installed by Zonergy under CPEC.[164]

The Jhimpir Wind Power Plant, built by the Turkish company Zorlu Enerji has already begun to sell 56.4 MW of electricity to the
government of Pakistan,[165] though under CPEC, another 250MW of electricity are to be produced by the Chinese-Pakistan
consortium United Energy Pakistan and others at a cost of $659 million.[166][167] Another wind farm, the Dawood wind power
project is under development byHydroChina at a cost of $115 million, and will generate 50 MW of electricity by August 2016.[168]

SK Hydro Consortium is constructing the 870 MW Suki Kinari Hydropower Project in the Kaghan Valley of Pakistan's Khyber
Pakhtunkhwa province at a cost of $1.8 billion,[169] SK Hydro will construct the project with financing by China's EXIM bank.
[170]

The $1.6 billion 720 MW Karot Dam which is under construction is part of the CPEC plan, but is to be financed separately by
China's Silk Road Fund.[171]

Pakistan and China have also discussed the inclusion of the 4,500MW $14 billion Diamer-Bhasha Dam as part of the CPEC
project,[172] though as of December 2015, no firm decision has been made though Pakistani officials remain optimistic at its
eventual inclusion.[173]

The $2.4 billion, 1,100 MW Kohala Hydropower Project being constructed by China's Three Gorges Corporation predates the
[174]
announcement of CPEC, though funding for the project will now come from CPEC fund.
Coal
Despite several renewable energy projects, the bulk of new energy generation capacity under CPEC will be coal-based plants, with
$5.8 billion worth of coal power projects expected to be completed by early 2019 as part of the CPEC's "Early Harvest" projects.

Balochistan
In Balochistan province, a $970 million coal power plant at Hub, near Karachi, with a capacity of 660MW to be built by a joint
consortium of China'sChina Power Investment Corporationand the Pakistani firm Hub Power Company as part of a larger $2 billion
project to produce 1,320MW from coal.[175]

, and is being financed bya 0% interest loan.[72]

A 300MW coal power plant is also being developed in the city of Gwadar

Punjab
The $1.8 billion Sahiwal Coal Power Project, in full operation since 3 July 2017,[176] is a project in central Punjab that has a capacity
of 1,320MW. It was built by a joint venture of two Chinese firms: the Huaneng Shandong company and Shandong Ruyi Science &
Technology Group, who will jointly own and operate the plant.[177] Pakistan will purchase electricity from the consortium at a tariff
of 8.36 US cents/kWh.[178]

The $589 million project to establish a coal mine and a relatively small 300MW coal power plant to be built in the town of Pind
Dadan Khan by China Machinery Engineering Corporation in Punjab's Salt Range.[179] Pakistan's NEPRA has been criticized for
considering a relatively high tariff of 11.57 US cents/kWH proposed by the Chinese firm,[180] which had been initially agreed at 8.25
US cents/kWH in 2014.[181] The Chinese firm argued that coal transportation costs had greatly increased due to the nonavailability
of coal from nearby mines which had initially been regarded as the primary coal source for the project. The company argued that coal
would instead have to be transported from distant Sindh province, which along with inefficiencies in mining procedures, increased
the cost of fuel by 30.5%.[182]

Sindh
The Shanghai Electric company of China will construct two 660MW power plants as part of the "Thar-I" project in the Thar coalfield
of Sindh province, while "Thar-ll" will be developed by a separate consortium.[183][184] The facility will be powered by locally
sourced coal,[185] and is expected to be put into commercial use in 2018.[186] Pakistan's National Electric Power Regulatory
Authority (NEPRA) has agreed to purchase electricity from both Thar-l and Thar-ll at a tariff of 8.50 US cents/kWh for the first 330
MW of electricity, 8.33 US cents/kWh for the next 660 MW, and 7.99 US cents/kWh for the next 1,099 MW as further phases are
developed.[187][188]

Near the Thar-I Project, the China Machinery Engineering Corporation in conjunction with Pakistan's Engro Corporation will
construct two 330MW power plants as part of the "Thar-ll Project" (having initially proposed the simultaneous construction of two
660MW power plants) as well as developing a coal mine capable of producing up to 3.8 million tons of coal per year as part of the
first phase of the project."[189] The first phase is expected to be complete by early 2019,[190] at a cost of $1.95 billion.[191]
Subsequent phases will eventually generate an additional 3,960MW of electricity over the course of ten years.[184] As part of
infrastructure required for electricity distribution from the Thar l and ll Projects, the $2.1 billion
Matiari to Lahore Transmission Line,
[20]
and $1.5 billion in Matiari to Faisalabad transmission line are also to be built as part of the CPEC project.

The 1,320MW $2.08 billion Pakistan Port Qasim Power Project near Port Qasim will be a joint venture of Al-Mirqab Capital from
Qatar, and China's Power Construction Corporation a subsidiary of Sinohydro Resources Limited.[192][193] Pakistan's NEPRA and
[194]
SinoHydro agreed to set the levelized tariff for electricity purchased from the consortium at 8.12 US cents/kWh.

Liquified natural gas

Liquefied natural gas power LNG projects are also considered vital to CPEC. The Chinese government has announced its intention to
build a $2.5 billion 711 kilometre gas pipeline from Gwadar to Nawabshah in province as part of CPEC.[195] The pipeline is
designed to be a part of the 2,775 kilometre long IranPakistan gas pipeline, with the 80 kilometre portion between Gwadar and the
Iranian border to be connected when sanctions against Tehran are eased; Iran has already completed a 900 kilometre long portion of
the pipeline on its side of the border.[21]

The Pakistani portion of the pipeline is to be constructed by the state-owned China Petroleum Pipeline Bureau.[196] It will be 42
inches in diameter, and have the capacity to transport 1 billion cubic feet of liquified natural gas every day, with an additional 500
million cubic feet of additional capacity when the planned off-shore LNG terminal is also completed[197] The project will not only
[198]
provide gas exporters with access to the Pakistani market, but will also allow China to secure a route for its own imports.

The project should not be confused with the $2 billion 1,100 kilometre North-South Pipeline liquified natural gas pipeline which is to
be constructed with Russian assistance between Karachi and Lahore with anticipated completion by 2018.[199] Nor should it be
confused with the planned $7.5 billion TAPI Pipeline which is a planned project involving Turkmenistan, Afghanistan, Pakistan, and
India.

Other LNG projects are currently under construction with Chinese assistance and financing that will augment the scope of CPEC, but
are neither funded by nor officially considered a part of CPEC. The 1,223MW Balloki Power Plant is currently under construction
near Kasur, and is being constructed by China's Harbin Electric Company with financing from the China's EXIM bank, is one such
example. In October 2015, Prime Minister Nawaz Sharif also inaugurated construction of the 1,180MW Bhikhi Power Plant near
Sheikhupura,[200] which is to be jointly constructed by China's Harbin Electric Company and General Electric from the United
States.[201] It is expected to be Pakistan's most efficient power plant, and will provide enough power for an estimated 6 million
homes.[201]

"Early Harvest" projects

As part of the "Early Harvest" scheme of the CPEC, over 10,000 megawatts of electricity-generating capacity is to be developed
between 2018 and 2020.[20] While some "Early Harvest" projects will not be complete until 2020, the government of Pakistan plans
to add approximately 10,000 MW of energy-generating capacity to Pakistan's electric grid by 2018 through the completion of
projects which complement CPEC. Although not officially under the scope of CPEC, the 1,223 MW Balloki Power Plant, and the
1,180 MW Bhakki powerplants are also under construction,[200][202] which along with the under-construction 969 MW Neelum
Jhelum Hydropower Plant and 1,410 MW Tarbela IV Extension Project will result in an additional 10,000 MW being added to
Pakistan's electricity grid by 2018 by a combination of CPEC and non-CPEC projects.[203] A further 1,000 MW of electricity will be
imported to Pakistan from Tajikistan and Kyrgyzstan as part of the CASA-1000 project, which is expected to be completed in late
2018.[204]

Table of projects
 "Early Harvest" Energy Project[205] Capacity Location
Pakistan Port Qasim Power Project. 1,320 MW (2 x 660 MW plants) Sindh
Thar-l Project 1,320 MW (4 x 330 MW plants) Sindh
Thar-ll Project and coal mine 1,320 MW (2 x 660 MW plants) Sindh
Sahiwal Coal Power Project 1,320 MW (2 x 660 MW plants) Punjab
Rahimyar Khan coal power project 1,320 MW (2 x 660 MW plants) Punjab
Quaid-e-Azam Solar Park 1,000 MW Punjab

Suki Kinari Hydropower Project 870 MW (expected completion in 2020)[206] Khyber Pakhtunkhwa

Karot Hydropower Project 720 MW (expected completion in 2020)[207] Punjab

China Power Hub Generation Company 2X660 MW Balochistan

Thar Engro Coal Power Project 660 MW (2 x 330 MW plants) Sindh
Gwadar coal power project 300 MW Balochistan
UEP Windfarm 100 MW Sindh
Dawood wind power project 50 MW Sindh
Sachal Windfarm 50 MW Sindh
Sunnec Windfarm 50 MW Sindh
Matiari to Faisalabad transmission line 660 kilovolt Sindh and Punjab
Matiari to Lahore Transmission Line 660 kilovolt Sindh and Punjab

Other areas of cooperation

The CPEC announcement encompassed not only infrastructure works, but also addressed areas of co-operation between China and
Pakistan.

Agriculture
CPEC includes provisions for cooperation in management of water resources, livestock, and other fields of agriculture. Under the
plan, agricultural information project, storage and distribution of agricultural equipment and construction project, agricultural
mechanisation, demonstration and machinery leasing project and fertiliser production project for producing 800,000 tons of fertiliser
and 100,000 tons of bio-organic fertiliser will be implemented.[208][209]

Science and technology

As part of CPEC, the two countries signed an Economic and Technical Cooperation Agreement,[210] as well as pledged to "China-
Pakistan Joint Cotton Bio-Tech Laboratory"[210] The two countries also pledged to establish the "China-Pakistan Joint Marine
Research Center" with State Oceanic Administration and Pakistan's Ministry of Science and Technology[210] Also as part of the
space research.[46]
CPEC agreement, Pakistan and China have agreed to co-operate in the field of

In February 2016, the two countries agreed to establish the "Pak-China Science, Technology, Commerce and Logistic Park" near
Islamabad at an estimated cost of $1.5 billion.[211] The park will be situated on 500 hectares, which will be provided by Pakistan to
China's Xinjiang Production and Construction Corps, with all investments expected to come from the Chinese side over the course of
ten years.[211]

In May 2016, construction began on the $44 million 820 kilometer long Pakistan-China Fiber Optic Project, an optical fiber cable
that will enhance telecommunication in the Gilgit-Baltistan region, while offering Pakistan a fifth route by which to transmit
telecommunication traffic.[212]
Other fields
The two nations also pledged co-operation in field ranging from anti-narcotic efforts,[210] to co-operation in an effort to reduce
climate change.[210] The two nations also agreed to increase co-operating between the banking sectors of the two countries, as well
as to establish closer ties betweenChina Central Television and the Pakistan Television Corporation.[210]

Finance

Concessionary loans
Approximately $11 billion worth of infrastructure projects being developed by the Pakistani government will be financed at an
interest rate of 1.6%,[213] after Pakistan successfully lobbied the Chinese government to reduce interest rates from an initial 3%.[214]
Loans will be dispersed by the Exim Bank of China, China Development Bank, and the ICBC.[215] For comparison, loans for
previous Pakistani infrastructure projects financed by the World Bank carried an interest rate between 5% and 8.5%,[216] while
interest rates on market loans approach 12%.[217]

The loan money would be used to finance projects which are planned and executed by the Pakistani government. Portions of the
approximately $6.6 billion[93] KarachiLahore Motorway are already under construction.[218] The $2.9 billion phase which will
connect the city of Multan to the city of Sukkur over a distance of 392 kilometres has also been approved,[219] with 90% of costs to
be financed by the Chinese government at concessionary interest rates, while the remaining 10% is to be financed by the Public
Sector Development Programme of the Pakistani government.[220] In May 2016, the $2.9 billion loan were given final approvals
required prior to disbursement of the funds were given by the Government of the People's Republic of China on May 4, 2016, and
will be concessionary loans with an interest rate of 2.0%.[82] The National Highway Authority of Pakistan reported that contractors
[82]
arrived on site soon after the loan received final approval.

The China Development Bank will finance the $920 million towards the cost of reconstruction of the 487 kilometer portion of the
Karakoram Highway between Burhan and Raikot.[221][222] An addition $1.26 billion will be lent by the China Exim Bank for the
construction of the Havelian to Thakot portion of this 487 kilometer stretch of roadway,[80][81] to be dispersed as low-interest rate
concessionary loans.[82]

$7 billion of the planned $8.2 billion overhaul of the Main Line 1 railway is to be financed by concessionary loans, which extended
by China's state owned banks.[223]

The long-planned 27.1 km long $1.6 billion Orange Line of the Lahore Metro is regarded as a commercial project,[210] and does not
qualify for the Exim Bank's 1.6% interest rate. It will instead by financed at a 2.4% interest rate[152] after China agreed to reduce
[224]
interest rates from an originally planned rate of 3.4%.

The $44 million Pakistan-China Fiber Optic Project, a 820 km long fibre optic wire connecting Pakistan and China, will be
[225]
constructed using concessionary loans at an interest rate of 2%, rather than the 1.6% rate applied to other projects.

Interest-free loans
The government of China in August 2015 announced that concessionary loans for several projects in Gwadar totalling $757 million
would be converted 0% interest loans.[213] The projects which are now to financed by the 0% interest loans include: the construction
of the $140 million East Bay Expressway project, installation of breakwaters in Gwadar which will cost $130 million, a $360 million
coal power plant in Gwadar, a $27 million project to dredge berths in Gwadar harbour, and a $100 million 300-bed hospital in
Gwadar.[213] Pakistan will only repay the principle on these loans.

In September 2015, the government of China also announced that the $230 million Gwadar International Airport project would no
longer be financed by loans, but would instead be constructed by grants which the government of Pakistan will not be required to
repay.[214]
Private consortia
$15.5 billion worth of energy projects are to be constructed by joint Chinese-Pakistani firms, rather than by the governments of either
China or Pakistan. The Exim Bank of China will finance those investments at 56% interest rates, while the government of Pakistan
[160]
will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.

As an example, the 1,223MWBalloki Power Plant does not fall under the concessionary loan rate of 1.6%, as the project is not being
developed by the Pakistani government. Instead, it is considered to be a private sector investment as its construction will be
undertaken by a consortium of Habhbrbin Electric and Habib Rafiq Limited after they successfully bid against international
competitors.[226] Chinese state-owned banks will provide loans to the consortium that are subsidised by the Chinese government. In
the case of the Balloki Power Plant, state-owned banks will finance the project at an interest rate of 5%,[227] while the Pakistani
[226]
government will purchase electricity at the lowest bid rate of 7.973 cents per unit.

ADB assistance
While the E-35 expressway is considered to be a crucial part of the route between Gwadar and China, the E35 will not be financed by
[128]
CPEC funds. The project will instead be financed by the Asian Development Bank.

The N70 project is not officially a part of CPEC but will connect the CPEC's Western Alignment to the Karachi-Lahore Motorway at
Multan. The project will be financed as part of a $195 million package by the Asian Development Bank announced in May 2015 to
upgrade the N70 National Highway and N50 National Highway.[120] In January 2016, The United Kingdom's Department for
International Development announced a $72.4 million grant to Pakistan for roadway improvements in the province of Balochistan,
[121]
thereby reducing the total Asian Development Bank loan from $195 million to $122.6 million.

The M-4 Motorway between Faisalabad and Multan is not to be financed by the Chinese government as part of CPEC, but will
instead be the first infrastructure project partially financed by the Asian Infrastructure Investment Bank, and will be co-financed
along with the Asian Development Bankfor a total of approximately $275 million.[105] Portions of the project will also be funded by
a $90.7 million grant announced in October 2015 by the government of the United Kingdom towards the construction of the Gojra-
Shorkot section of the M4 Motorway project.[127]

Impact
The importance of CPEC to China is reflected by its inclusion as part of China's 13th five-year development plan.[228][229] CPEC
projects will provide China with an alternate route for energy supplies, as well as a new route by which Western China can conduct
gy supply.[230][231]
trade. Pakistan stands to gain due to upgrade of infrastructure and introduction of a reliable ener

On January 8, 2017, Forbes claimed that CPEC is part of China's vision to write the rules of the next era of globalization and help its
export and investment engines run for years to come.[232] Writing in January 2017, Arun Mohan Sukumar of India's Observer
Research Foundation claimed that "CPEC is an important enough project whose economic and strategic consequences require
methodical assessment", adding that "CPEC may be a bilateral endeavour, but New Delhi cannot ignore its spillover effects on
regional governance" and concluding that "India would be ill-advised to rely on the false comfort that profits alone will drive China's
business with Pakistan".[233]

According to China's prime minister, Li Keqiang, Pakistan's development through the project might "wean the populace from
fundamentalism".[29]

Pakistani economy
The CPEC is a landmark project in the annals of history of Pakistan. It is the largest investment Pakistan has attracted since
independence and largest by China in any foreign country.[234] CPEC is considered economically vital to Pakistan in helping it drive
economic growth.[235] The Pakistani media and government have called CPEC investments a "game and fate changer" for the
region,[236][237] while both China and Pakistan intend that the massive investment plan will transform Pakistan into a regional
economic hub and further boost the deepening ties between the two countries.[238] Approximately 1 year after the announcement of
CPEC, Zhang Baozhong, chairman of China Overseas Port Holding Company told The Washington Post that his company planned to
spend an additional $4.5 billion on roads, power, hotels and other infrastructure for Gwadar's industrial zone,[27] which would be one
of the largest ever sums of foreign direct investment into Pakistan.

Pakistan currently faces energy shortfalls of over 4,500MW on a regular basis[18] with routine power cuts of up to 12 hours per
day,[19] which has shed an estimated 22.5% off its annual GDP.[19] The Financial Times notes that Pakistan's electricity shortages
are a major hindrance to foreign investment, and that Chinese investments in Pakistani infrastructure and power projects will lead to a
"virtuous cycle" that will make the country more attractive for foreign investment in a variety of sectors.[239] Poor availability of
electricity is considered by theWorld Bank to be a main constraint to both economic growth and investment in Pakistan. Constructing
China Pakistan Economic Corridor will bring regional harmony and better economic ties. It will provide China a shorter, cheaper and
more secured route to interact with West and South Asia, Arabian Peninsula and Africa through Pakistan. As president Mamnoon
Hussain already termed CPEC "Framework of Regional Connectivity" which would bolster the activities of trade and business in the
whole region. It is an extraordinary project of shared dreams, goals, destiny, harmony and collective development through the
extension of geographical links. CPEC is basically initiation the Maritime Silk Road that will link 3-billion people of Europe, Asia
and Africa.[240]

Pakistan's large textile industry has also been negatively affected by several-hour long power cuts, with almost 20% of textile
factories in the city of Faisalabad shutting down on account of power shortages.[241] The CPEC's "Early Harvest" projects are
expected to resolve shortages in power generation by 2018 by increasing Pakistan's power generation capacity by over 10,000
megawatts.[20] As a result of improved infrastructure and energy supplies, the Pakistani government expects that economic growth
rates will reach 7% by 2018.[242]

Former Pakistan Prime Minister Shaukat Aziz also stated in May 2016 that predicted economic growth from CPEC projects would
result in stabilization of Pakistan's security situation,[243] which has also been cited by the World Bank as hindrance to sustained
economic growth in Pakistan.[244]

According to Chinese Foreign Ministry Spokesperson Hua Chunying, the corridor will "serve as a driver for connectivity between
South Asia and East Asia." Mushahid Hussain, chairman of the Pakistan-China Institute, told China Daily that the economic corridor
"will play a crucial role in regional integration of the 'Greater South Asia', which includes China, Iran, Afghanistan, and stretches all
the way to Myanmar."[36] When fully built, the corridor is expected to generate significant revenue from transit fees levied on
Chinese goods to the tune of several billion dollars per annum.[245] According to The Guardian, "The Chinese are not just offering
[246]
to build much-needed infrastructure but also make Pakistan a key partner in its grand economic and strategic ambitions."

Moody's Investors Servicehas described the project as a "credit positive" for Pakistan. In 2015, the agency acknowledged that much
of the project's key benefits would not materialise until 2017, but stated that it believes at least some of the benefits from the
economic corridor would likely begin accruing even before then.[247] The Asian Development Bank stated "CPEC will connect
economic agents along a defined geography. It will provide connection between economic nodes or hubs, centered on urban
landscapes, in which large amount of economic resources and actors are concentrated. They link the supply and demand sides of
markets."[248] On November 14, 2016, Hyatt Hotels Corporationannounced plan's to open four properties in Pakistan, in partnership
[249]
with Bahria Town Group, citing the investment of CPEC as the reason behind the $600 million investment.

On March 12, 2017, a consortium of Pakistani broker houses reported that Pakistan will end up paying $90 billion to China over a
span of 30 years with annual average repayments of $34 billion per year post fiscal year 2020. The report further said that CPEC-
related transportation would earn $400500 million per annum to Pakistan, and would grow Pakistani exports by 4.5% a year till
fiscal year 2025.[250]

CPEC and the "Malacca Dilemma"

The Straits of Malacca provide China with its shortest maritime access to Europe, Africa, and the Middle East.[251] Approximately
80% pass of its Middle Eastern energy imports also pass through the Straits of Malacca.[252] As the world's biggest oil importer,[40]
energy security is a key concern for China while current sea routes used to import Middle Eastern oil are frequently patrolled by the
[253]
United States' Navy.[253]

In the event that China were to face hostile actions from a state or non-state
actor, energy imports through the Straits of Malacca could be halted, which in
turn would paralyse the Chinese economy in a scenario that is frequently
referred to as the "Malacca Dilemma".[252] In addition to vulnerabilities faced
in the Straits of Malacca region, China is heavily dependent upon sea-routes
that pass through the South China Sea, near the disputed Spratly Islands and
Paracel Islands, which are currently a source of tension between China,
Taiwan, Vietnam, the Philippines, and the United States.[254] The CPEC
project will allow Chinese energy imports to circumvent these contentious
areas and find a new artery in the west, and thereby decrease the possibility of
[255]
confrontation between the United States and China.

In addition to potential weaknesses in regards to the United States' Navy, the

Indian Navy has recently increased maritime surveillance of the Straits of
Malacca region from its base onGreat Nicobar Island.[256] India has expressed Map showing territorial claims in South
fears of a Chinese "String of Pearls" encircling it.[257][258] Were conflict to China Sea. A high percentage of Chinese
erupt, India could potentially impede Chinese imports through the straits.[259] energy imports pass through this disputed
region, rendering much of China's energy
Indian maritime surveillance in the Andaman Sea could possibly enhance
imports vulnerable to conflict.
Chinese interest in Pakistan's Gwadar Port the Kyaukpyu Port, which is
currently being developed in Myanmar by the Chinese government as another
alternate route around the Straits of Malacca, will likely be vulnerable to similar advances by the Indian Navy. The proposed
Bangladesh-China-India-Myanmar Corridor (BCIM) would also be vulnerable to Indian advances against China in the event of
conflict, thereby potentially limiting the BCIM Corridor's usefulness to China's energy security, and thereby increasing Chinese
interest in CPEC.

China's stake in Gwadar will also allow it to expand its influence in the Indian Ocean,
a vital route for oil transportation between the Atlantic and the Pacific. Another
advantage to China is that it will be able to bypass the Strait of Malacca. As of now, 60
percent of China's imported oil comes from the Middle East, and 80 percent of that is
transported to China through this strait, the dangerous, piracy-rife maritime route
through the South China, East China, and Yellow Seas.
Council on Foreign Relations[260]

Access to western China

The CPEC Alignments will improve connectivity to restive Xinjiang, thereby increasing the region's potential to attract public and
private investment.[251] CPEC is considered central to ChinaPakistan relations; its central importance is reflected by China's
inclusion of the project as part of its 13th five-year development plan.[228][229] The CPEC projects will also complement China's
Western Development plan, which includes not only Xinjiang, but also the neighbouring regions ofTibet and Qinghai.[261]

In addition to its significance to reduce Chinese dependence on the Sea of Malacca and South China Sea routes, CPEC will provide
China an alternative and shorter route for energy imports from the Middle East, thereby reducing shipping costs and transit times.
The currently available sea-route to China is roughly 12,000 kilometres long, while the distance from Gwadar Port to Xinjiang
province is approximately 3,000 kilometres, with another 3,500 kilometres from Xinjiang to China's eastern coast.[252] As a result of
CPEC, Chinese imports and exports to the Middle East, Africa, and Europe would require much shorter shipment times and
distances.

Route to circumvent Afghanistan

Negotiations to provide an alternate route to the Central Asian republics by way of China predate the announcement of CPEC. The
AfghanistanPakistan Transit Trade Agreement of 2010 provided Pakistan access to Central Asia via Afghanistan, however, the full
agreement has yet to be fully implemented. The "Quadrilateral Agreement on Traffic in Transit" (QATT) was first devised in 1995,
and signed in 2004 by the governments of China, Pakistan, Kazakhstan, and Kyrgyzstan to facilitate transit trade between the various
countries, with no inclusion of Afghanistan.[262] Despite signing of the QATT, the agreements full potential was never realised,
largely on account of poor infrastructure links between the four countries prior to the announcement of CPEC.

During the visit of Afghan President Ashraf Ghani to India in April 2015, he stated "We will not provide equal transit access to
Central Asia for Pakistani trucks" unless the Pakistani government included India as part of the 2010 AfghanistanPakistan Transit
Trade Agreement.[263] The current Transit Trade Agreement provides Afghanistan access to the Port of Karachi to conduct export
trade with India, and allows Afghan goods to be transited up to any border of Pakistan, but does not guarantee Afghan trucks the right
to traverse the Wagah Border, nor does the agreement permit Indian goods to be exported to Afghanistan via Pakistan.[264] Owing to
continued tensions between India and Pakistan, the Pakistani government expressed reluctance to include India in any trade
negotiations with Afghanistan, and as a result, little progress was made between the Afghan and Pakistani sides.

In February 2016, the Pakistani government signalled its intention to completely bypass Afghanistan in its quest to access Central
Asia by announcing its intent to revive the QATT so that Central Asian states could access Pakistani ports via Kashgar instead of
Afghanistan,[265] thereby allowing the Central Asian republics to access Pakistan's deep water ports without having to rely on a
politically unstable Afghanistanas a transit corridor. In early March 2016, the Afghan government reportedly acquiesced to Pakistani
requests to use Afghanistan as a corridor to Tajikistan, after having dropped demands from reciprocal access to India via
Pakistan.[266]

Alternate route to Central Asia

The heads of various Central Asian republics have expressed their desire to connect their infrastructure networks to the CPEC project
via China. During the August 2015 visit of Pakistani Prime Minister Nawaz Sharif to Kazakhstan, the Kazakh Prime Minister Karim
Massimov, conveyed Kazakhstan's desire to link its road network to the CPEC project.[267] During the November 2015 visit of
Tajikistan President Emomali Rahmon to Pakistan, the Tajik premier also expressed his government's desire to join the Quadrilateral
Agreement on Traffic in Transit to use CPEC as a conduit for imports and exports to Tajikistan by circumventing Afghanistan;[268]
.[268]
the request received political backing by the Pakistani Prime Minister

China expects that the economic corridor will make it capable enough to suck oil and gas from Central Asian countries with the help
of pipelines through Baluchistan into Sinkiang. Chinese goods would have much more compatible, nimble and fast route to global
markets than the Strait of Malacca, which China presumes is at the mercy of America. China and America have tense relation with
each other in the South China Sea. China has dispute with some other countries such as Vietnam and Philippines, the American allies
over the Spratly and Paracel Islands. China apprehends American hegemonic intentions in the region in the vicinity of Malacca Strait.
In the conflict of two, Chinas trade and supply may be blocked. Chinas economy would be jeopardized. Thus, China needs an
alternative route and such route is Gawadar developed by Pakistan and China in 2007 and to make Gawadar fully operational, CPEC
is imperative. Furthermore, China also wants to cope with the insur
gency in Sinkiang. In order to do so, it needs to develop the region
which is its largest province and is Muslin-dominated. Development, China hopes, would help to quell the movement. Further, if
Pakistans economy prospers economically, terrorism in Pakistan would dwindle and this would have positive impact on Sinkiang.
Thus, China likes to invest in Pakistan for all these benefits, even though risk still prevails. With the advent of CPEC-related
infrastructure projects, transit times between Kashgar and Pakistan's coast will be greatly reduced, which in turn will also reduce
transit times to the Kyrgyzstan and hydrocarbon-rich Kazakhstan through already existing overland routes. The Chinese government
has already upgraded the road linking Kashgar to Osh in Kyrgyzstan via the Kyrgyz town of Erkeshtam while a railway between
Urumqi, China and Almaty, Kazakhstan has also been completed as part of China's One Belt One Road initiative.[269] Numerous
land crossings already exist between Kazakhstan and China as well. Additionally, the Chinese government has announced plans to
lay railway track from Tashkent, Uzbekistan, towards Kyrgyzstan with onwards connections to China and Pakistan.[270] Further, the
Pamir Highway already provides Tajikistan access to Kashgar via the Kulma Pass. These crossings complement the CPEC project to
provide Central Asian states access to Pakistan's deepwater ports by completely bypassing Afghanistan a country which has been
ravaged by civil war and political instability since the late 1970s.
Comparison to Chabahar Port
In May 2016, Indian Prime Minister Narendra Modi and his counterpart, Iranian President Hassan Rouhani, signed a series of twelve
agreements in Tehran, in which India offered to refurbish one of Chabahar's ten existing berths, and reconstruct another berth the Port
of Chabahar,[271] in order to allow Indian goods to be exported to Iran, with the possibility of onward connections to Afghanistan
and Central Asia.[272] As of February 2017, the project remains delayed while the governments of Iran and India blame one another
for delays.[273]

A section of the Indian media described it as "a counter to the China-Pakistan Economic Corridor",[274] although the total monetary
[275]
value of projects has been noted to be significantly less than that of CPEC.

As part of the twelve memorandums of understanding signed by Indian and Iranian delegations as per text released by India's
Ministry of External Affairs, India will offer a $150 million line of credit extended by the Exim Bank of India,[276] while India Ports
Global also signed a contract with Iran's Aria Banader to develop berths at the port,[277] at a cost of $85 million[278] over the course
of 18 months.[279]

Under the agreement, India Ports Global will refurbish a 640 meter long container handling facility, and reconstruct a 600 meter long
berth at the port.[271] India further agreed to extend a $400 million line of credit to be used for the import of steel for the construction
of a rail link between Chabahar and Zahedan,[280] while India's IRCON and Iran's Construction, Development of Transport and
Infrastructure Company signed a memorandum of understanding regarding the construction and finance of the Chabahar to Zahedan
rail line at a cost of $1.6 billion.[281]

India's Highways and Shipping Minister, Nitin Gadkari suggested that the free trade zone in Chabahar had the potential to attract
upwards of $15 billion worth of investment in the future,[282] although he stated that such investments are predicated upon Iran
offering India natural gas at a rate of $1.50 per million British Thermal Units,[283] which is substantially lower than the rate of $2.95
per million British Thermal Units offered by Iran.[284] The two countries also signed a memorandum of understanding to explore the
possibility of setting up an aluminum smelter at a cost of $2 billion,[285] as well as establishing a urea processing facility in
Chahbahar,[286] although these investments are also contingent upon Iran supplying low-cost natural gas for operation of those
facilities.[287]

India, Iran, and Afghanistan also signed an agreement with the intention of simplifying transit procedures between the three
countries.[278] Despite the expressed desire to circumvent Pakistan in order to augment Iranian and Indian economic ties, Indian
goods destined for Iran currently do not require transit through Pakistan, as those goods can be exported to Iran via Bandar Abbas,
where India also currently maintains a diplomatic mission.[288] Bandar Abbas is also consider a key node on the NorthSouth
Transport Corridor, backed by India and Russia since 2002.[289][290] Indian goods also can be imported and transited across Iran
upon arrival at Bandar-e Emam Khomeyni near the Iraqi border.

As per the AfghanistanPakistan Transit Trade Agreement, Afghan goods can be transited across Pakistan for export to India as well,
though Indian goods cannot be exported to Afghanistan via Pakistan.[291] Upon completion of Chabahar, Indian exporters will
benefit from the potential ability to export goods to Afghanistan, a country with an annual gross domestic product estimated at $60.6
billion.[292]

After signing the agreement, Iran's ambassador to Pakistan, Mehdi Honerdoost, stated that the agreement was "not finished", and that
Iran would welcome the inclusion of both Pakistan and China in the project.[293] While clarifying that Chabahar Port would not be a
rival or enemy to Pakistan's Gwadar Port,[294] he further stated that Pakistan and China had both been invited to contribute to the
[295][296]
project before India, but neither China nor Pakistan had expressed interest in joining.

However, eventually, Iranian ambassador made it clear that Iran doesn't consider Chahbahar to be a project which could feasibly rival
[297]
CPEC as he said "Iran is eager to join CPEC with its full capabilities, possibilities and abilities".

Security Issues
While agreements have specifically cited improvements for Afghan connectivity to the world as a benefit of Indian investment in the
region,[298] Afghanistan's politically instability could limit the potential usefulness of transit corridors to population centers near
Kabul or Kandahar,[299] as those routes traverse southern and eastern Afghanistan, where the Taliban is most active.[300] The
Chabahar plan relies upon connections to the Afghan Ring Road.[301] By August 2016, the Taliban was noted to have captured large
swathes of land in Helmand Province, and threatened to capture the provincial capital of Lashkar Gah,[302] which lies on the portion
of the Afghan Ring Road connecting Chabahar to Kandahar and Kabul. As a result, portions of the Afghan Ring Road were closed
due to Taliban insurgent activity.[303] Also in August 2016, the Taliban claimed responsibility for an attack which left twelve foreign
tourists dead as they were traveling on an alternative route to the Afghan Ring Road, between Kabul and Herat.[304] In September
[305]
2016, Iran's president Hassan Rouhani expressed his country's interest in joining CPEC during a meeting with Nawaz Sharif.

Security

Security Forces
Pakistan Navy and Chinese Navy ships are to jointly guard the safety and security of the trade corridor, as Pakistan seeks to expand
the role of its maritime forces.[306] From December 2016, Pakistan's Navy established a special taskforce "TF-88" to ensure there is
maritime security for trade.[307][308] Chairman Parliamentary Committee on CPEC confirmed that Sindh province will dispatch 2000
police officers, while Punjab will dispatch 5000 police officers for the project, while the Pakistani Army will deploy 12,000 troops to
safeguard the route.[309] China plans to transfer 4 ships to the Maritime Security Agency with two ships called PMSS Hingol and
PMSS Basol.[310] For territorial security, Pakistan has formed the Special Security Division.[311] Pakistan plans to train 12,000
security personnel to protect Chinese workers on the corridor.[312][313][314] As of August 2015, 8,000 Pakistani security officials
were deployed for the protection of over 8,100 Chinese workers in Pakistan.[315] As part of CPEC, Pakistan has boosted its
international engagement in terms of foreign policy with China, Iran, USA, Turkey and Malaysia are to be engaged for the maritime
economy related to CPEC.[316] Iranian President Rouhani revealed his intentions to Pakistan to join CPEC in a meeting at the
UN[317] Russia has also expressed support for CPEC.[318][319]

Baloch militants
Baluchistan province has been site of nationalist and separatist insurgencies,[320] which Pakistan alleges are supported by Indian
intelligence services,as provided evidence to united nations on Indian spy kulbhushan yadav caught on Pakistan soil of Baluchistan
province 3 march 2016.[321] Exiled Baloch nationalistHyrbyair Marri in 2016 warned the safety of Chinese nationals working on the
project could not be guaranteed,[322] though violence in the region peaked in 2013 before sharply declining.
[323][A]

The Pakistani government reported that over 800 Baloch militants surrendered to security forces in 2016 after the launch of a
reconciliation programme,[325] including over 200 at a single ceremony in November 2016.[326] Balakh Sher Badini, a senior
militant commander of the Balochistan Liberation Army, surrendered to Pakistani forces in January 2017.[327] Another 21 militants
from another militant group, the Balochistan Republican Army [328]
, surrendered shortly thereafter along with 3 militant commanders.
A few days later, high-ranking militant commander Lal Din Bugti surrendered to Pakistani security forces, along with 6 other
commanders.[329] Separatist violence had decreased in the province so much by 2017, that such groups had become much less of a
threat compared to Islamist militants.[330]

Islamist militants
Pakistan faced Taliban insurgent violence that largely began in 2008 during the rule of General Pervez Musharraf. The outlawed
terrorist organisation Tehrik-i-Taliban has claimed responsibility for past attacks on some Chinese nationals,[331] and Chinese
commentators have raised concerns that the safety of construction workers could be under threat.[332] China reportedly also
expressed concern that militant groups in Xinjiang could collaborate with Tehrik-i-Taliban militants in Pakistan.[40][333] In 2014,
Pakistan launched Operation Zarb-e-Azb to eradicate Tehrik-i-Taliban militants from Pakistani territory, following an attack on
Karachi's airport, and the 2014 Peshawar school massacrein which terrorists fromTehrik-i-Taliban killed 148 school students.
Following the launch of Operation Zarb-e-Azb, violence in Pakistan has drastically declined.[334] 2016 saw the lowest number of
deaths from acts of violence since the current wave of violence began in 2007,[335] with total fatalities dropping nearly 66%
compared to 2014.[335] Acts of terrorist violence fell 75% between 2014 and 2016.[336] According to the South Asia Terrorism
Portal, civilian fatalities from terrorist attacks in 2013 stood at 3,001, while the number had declined to 612 by 2016[337] - the lowest
number since 2005.

Though terrorism-related deaths decline in Pakistan as a whole in 2016, the toll rose slightly in Baluchistan,[334] where Tehrik-i-
Taliban militants maintain a degree of subversive capability. In August 2016, Quetta was struck by terroristS suicide bombing which
killed 70 people,[338] while sectarian militants still frequently target Baluchistan's Shia Hazaras.[336]

Indian Subversion Attempts

CPEC passes though the disputed region of Kashmir where Indian and Pakistani border guards have occasionally exchanged fire
across the Line of Control,[339][340] though no CPEC project is located near the line. Chinese intelligence agencies have also
reportedly shared information with Pakistani authorities regarding alleged efforts by the India's Research and Analysis Wing to
subvert CPEC.[341][341] In March 2016, Pakistan Reported that it had arrested a suspected terrorist spy from India's Research and
Analysis Wing, Kulbhushan Yadav, who Pakistan believe he has entered Pakistan from Iran specifically to destabilize regions in
Pakistan's Baluchistan province along with terrorist organization Tehrik-i-Taliban and Baloch liberation army (B.L.A) in order to
hinder implementation of CPEC projects.[342] Former Chief of Army Staff General Raheel Sharif in April 2016 accused India's
Research and Analysis Wing of destabilizing Pakistan in an attempt to disrupt and stymie implementation of various CPEC
projects.[343] Pakistan's Secretary of Defense Lieutenant General Alam Khattak stated in April 2016 that the arrest of Kulbhushan
Yadav indicated Indian interference in CPEC, and further alleged that India's Research and Analysis Wing, in collusion with
[344]
Afghanistan's National Directorate of Security, had set up a dedicated espionage unit with express intent to sabotage CPEC.

Criticism and miscellaneous issues

CPEC is viewed by many critics as aneo-imperialist exercise.[29]

KPK Provincial Assembly

Some planning aspects and technicalities associated with the route have been criticised in political forums and by the media.[345] The
Provincial Assembly of Khyber Pakhtunkhwaprovince adopted a resolution against the alleged decision of the central government to
change the multibillion route of the proposed project by diverting it away from Khyber Pakhtunkhwa province.[346] The supposed
change in CPEC routing was noted in an article published by China's Global Times newspaper,[347] two years before the official
announcement of CPEC when levels of violence were much higher in that province, which he acknowledged could factor into any
decision to re-route the corridor from KPK.[347]

The federal Minister of Planning Development and Reform Ahsan Iqbal formally denied any change in the alignment.[38][348][349]
As a rebuttal to this argument, Wu Zhaoli, an assistant research fellow at the National Institute of International Strategy, Chinese
Academy of Social Sciences, in his article also published in Global Times, stated that "security concerns are a critical cause which
helps to determine the path of this corridor",[332] implying that security concerns, rather than political bias, would be responsible for
any route changes. According to Dr Ahmad Rashid Malik, senior research fellow at the Institute of Strategic Studies Islamabad
(ISSi), the route controversy is "baseless and an unfounded reality...".[350] As a result of objections to CPEC, the Chinese
government in 2015 issued a statement urging Pakistani political parties to resolve their differences over the project.[351]

Finances
In addition to the aforementioned issues, some sources have suggested that the interest rate for CPEC related loans would be high,
with India's Daily News and Analysis paper suggesting that Pakistan had unwittingly accepted loans that would "be offered at very
high rates of interest",[352] although the actual interest rates were negotiated prior to acceptance, and for most projects will be
1.6%.[61]

Several articles in Pakistan have criticised the project's finances as being shrouded in mystery, while one article suggested that "there
is far too much secrecy and far too little transparency".[353] The Private Power and Infrastructure Board has also been accused of
irregularities in the approval process for coal power plants and the tariffs at which Pakistan is contractually obliged to purchase
electricity from those plants,[354] with special concern regarding potential irregularities in the tariff approved for the 300MW coal
power plant to be built inPind Dadan Khan by China Machinery Engineering Corporation.[355]

Trade imbalance
Chinese exports through the Karakoram Highway have entered the domestic Pakistani market, and are cheaper due to the relatively
higher cost of production in Pakistan.[356] It has also been speculated that the CPEC will replace Pakistani exports by Chinese ones
in external markets.[356]

Baloch Nationalists
Some Baloch nationalists have opposed the large-scale development projects envisioned by CPEC, fearing that such developments in
the province would eventually result in local residents "losing control" over natural resources.[357] Others have alleged that CPEC is
a "conspiracy" meant to stimulate the settlement of migrants from other regions of Pakistan in order to render ethnic Baloch a
minority in the province.[358]

In accordance to the Pakistani Government's announcement of its intent to issue resident cards to the city's inhabitants as a security
measure to prevent the movement of firearms into the city,[359] former Chief Minister of Balochistan province, Akhtar Mengal,
suggested at a political rally in November 2015, that execution of CPEC projects and the resident card policy would eventually result
in ethnic Baloch being denied entry into the city.[360] The resident cards measure would require any non-resident visitor to the city to
[359] without any reference to ethnicity. The former Chief
register at designated security checkpoints prior to entering the city by road,
Minister did, however, clarify that he would not oppose development projects in the province that he believed would uplift the plight
of local residents.[360] Shortly thereafter, the Pakistani government announced its intention to establish a training institute named
Pak-China Technical and Vocational Institute at Gwadar which is to be completed at the cost of 943 million rupees to impart skills to
[32]
local residents to train them to operate machinery at the port.

Athar Hussain, the director of the Asia Research Centre at London School of Economics, has expressed concerns that the CPEC is
"likely to bring more development to regions that are already developed, instead of poor areas such as Balochistan."[361] Burzine
Waghmar, a senior teaching fellow and member of the Centre for the Study of Pakistan, SOAS, University of London, suggested that
CPEC projects are not targeted towards benefiting the indigenous Baloch population, and will accelerate human rights violations in
the province.[361]

Gwadar residents' concerns

While nationalists openly oppose CPEC, some local leaders and residents of Gwadar city have also expressed concern in regards to
the project the head of Gwadar's local fisherman association stated in an interview with NBC News that "Development is good,
China is our great friend, this CPEC thing sounds amazing, but don't forget that this is our land, first."[362] Other residents doubt they
will see any of the benefits promised by CPEC, while others fear they will be evicted from their homes in order to make way for
infrastructure works.[363]

In response to concerns of local residents, Lt. General Amer Riaz who heads security operations in the province, stated that locals
would not be deprived of benefits, and that local Gwadar residents would have "the first right to everything."[364] Pakistan's Minister
of Planning, National Reforms, and Development, Ahsan Iqbal, further stated in May 2016 that Gwadar residents would be regarded
as "main stakeholders" in the city's master plan, and that fishermen specifically would also be accommodated by the plan.[365] The
developer of Gwadar Port, COPHC, has also announced that it will assist Gwadar's fishermen to help boost the region's seafood
[366]
industry by developing programmes to improve the quality of local seafoods.
Indian objections

Sovereignty claims
The Government of India, which shares tense relations with Pakistan, objects to the CPEC project as upgrade works to the
Karakoram Highway are taking place in Gilgit Baltistan; territory that India claims as its own. During the visit of Indian Prime
Minister Narendra Modi to China in 2015, the Indian Foreign Minister, Sushma Swaraj reportedly told Chinese Premier Xi Jinping
that projects passing throughGilgit-Baltistan are "unacceptable" as they require construction in the claimed territory.[367][368] India's
Foreign Secretary Subrahmanyam Jaishankar also confirmed that the issue had been raised with the Chinese government on the
trip.[369] Swaraj reiterated this stance during a meeting in August 2016 with Chinese foreign minister Wang Yi, stating India would
"resolutely oppose" the corridor in Kashmir.[370]

India did not object to Chinese construction of the Karakoram Highway,[371] which was built between 1959 and 1979. India further
did not initially object to major Chinese-sponsored upgrade works to the Karakoram Highway after a 2010 earthquake, though it did
[372]
object the presence of Chinese troops in the region that were sent to guard Chinese workers.

India further did not object to construction of the Mangla Dam, undertaken with World Bank funding and British technical assistance
in southern Azad Kashmir a region which India claims as its own territory. India even maintained that the Wullar Barrage project in
Indian-administered Kashmir, which Pakistan regards as a violation of the Indus Water Treaty, would ultimately be beneficial for the
Mangla Dam.[373] India further did not object to construction works at the Azad Kashmir'sNeelumJhelum Hydropower Plant, under
construction with Chinese assistance since 2008. India in 1991 agreed to allow the Neelum-Jhelum project to move forward,[374]
despite the project's location in territory which India legally considers as its own.

Following the 2005 Kashmir earthquake, large-scale reconstruction work of infrastructure took place across northern Azad Kashmir
with the assistance of South Korean, Turkish, and Saudi firms.[375] Chinese companies took part in 14 post-earthquake reconstruction
projects in the disputed region, worth $6 billion.[376] India did not object to these works, despite the fact that infrastructure near the
militarily sensitive Line of Control were upgraded.

Indian objection to Chinese construction works in the Gilgit-Baltistan arose in 2011 in response to a Chinese complaint regarding a
joint Indian-Vietnamese oil exploration project inthe disputed South China Sea.[377] The influential Institute for Defence Studies and
Analyses, a think tank funded by the Indian Ministry of Defence,[378] in 2011 called for India to begin raising objection to Chinese
projects in the region at the "international level."[379]

Encirclement fears
Former Indian ambassador, Phunchok Stobdan, alleged that China and Pakistan intended to develop the corridor not just for its
economic benefits, but also is motivated by the "strategic intent of besieging India", though he also stated that India can do little to
[380]
scuttle CPEC, and that avoiding China's One Road One Belt project altogether would be to the detriment of India.

The Indian Ministry of External Affairs in May 2015 also summoned the Chinese envoy in New Delhi to lodge India's opposition to
the project.[381] The Chinese Premier dismissed the concerns, describing CPEC as a "commercial project"[382] that would not target
any third party.[383]

In May 2016, India's Minister of State and External Affairs, Vijay Kumar Singh raised concerns regarding CPEC.[384] Despite Indian
objections, China and Pakistan initiated works on the $44 million Pakistan-China Fiber Optic Project on May 19, 2016 which will
require passage through Gilgit-Baltistan; the same region for which India expressed concerns to China.[385] Former Indian National
Security Advisor M. K. Narayanan also in May 2016 stated "CPEC must be viewed as a major threat. Both countries [China and
[384]
Pakistan] have a common intention to undermine India`s position in the region."

Despite objections, segments of the Indian public, as exemplified by former Indian Ambassador Melkulangara Bhadrakumar, regard
the project as in India's interest vis--vis Central Asia, and warn that India might "lose heavily" were India to remain opposed and
isolated from the project.[386]
On August 28, the China Institutes of Contemporary International Relations suggested that China will have "to get involved" if India
disrupts CPEC.[387] Indian National Congress leader Manish Tewari said that if ultimately the CPEC is going to threaten India, then
it should be opposed.[388]

List of major projects

 Project Notes

Gwadar Port [389][390]

Phase 1 complete. Phase 2 under construction.
Under construction. 193 km out of 892 km
Gwadar-Ratodero Motorway (M-8)
operational[124]

Dawood wind power project Fully operational.[391]

Under construction[210] Funded by the Asian

E-35 Expressway (Hazara Motorway) Development Bank,[77] but is considered vital to the
Karakoram Highway Reconstruction project.
[210]
Under construction. Iranian portion completed.
IranPakistan gas pipeline Gwadar to Nawabshah portion is to be funded by CPEC
agreements, while the Gwadar Iran border portion will
be funded by the Pakistani government.
Under construction. Portion between Raikot and Chinese
border had been under construction prior to CPEC
Reconstruction of the Karakoram Highway announcement, and was completed in 2012.[86] The 24
kilometre long Karakorum Highway Realignmentaround
Attabad Lake was also completed in 2015.[88]

Multan-Sukkur Motorway (M-5) Under construction[392][393]

Under construction.[394] Financed by China's Silk Road

Karot Hydropower Project
Fund.[171]

Orange Line (Lahore Metro) Under construction[151]

Pakistan Port Qasim Power Project Under construction[395]

Under construction[162] First phase complete, generating

Quaid-e-Azam Solar Park
400 MW of electricity.[164]

Sahiwal Coal Power Project In operation.[176]

Under construction. Of the 870 kilometres of road in
Balochistan province to be constructed/reconstructed as
part of CPEC's Western Alignment, 620 kilometres have
Western Alignment projects in Balochistan province. already been rebuilt as of January 2016.[109] Surab to
Gwadar portion is funded by theAsian Development
Bank, but is considered vital for completion of CPEC's
Western Alignment.

HaklaDera Ismail Khan Motorway (M-13) Under construction[113]

Pakistan-China Fiber Optic Project Under construction[396]

Economic Corridor Support Force Recruitment in progress[397]

Main-Line 1 railway overhaul between Karachi and
Planning studies underway[132]
Peshawar
Havelian Abbottabad Dry Port Planning studies underway

China-Pakistan Joint Cotton Bio-Tech Laboratory Approved[210]

Mansehra Muzaffarabad Mirpur Expressway Approved[398]

China-Pakistan Join</ref> t Marine Research Center Approved[210]

Hubco coal power plant project Approved[210]

Gwadar East Bay Expressway Approved[210]

Gwadar Hospital Approved[210]

Gwadar International Airport Approved[210]

Gwadar-Nawabshah LNG terminal and pipeline project Approved[210]

 Jhimpir wind power project Approved[210]

Main Line 2 and 3 railway overhaul Approved[210]

Matiari to Faisalabad transmission line Approved[210]

Matiari to Lahore Transmission Line Approved[210]

Salt Range coal power project Approved[210]

Suki Kinari Hydropower Project Approved[210]

Thar Engro Coal Power Project Approved[210]

Thar Block II coal power project Approved[210]

Khunjerab Railway Feasibility studies underway[210]

China Pakistan Economic Corridor Businessman Under Growing - Membership Open for business
Networking community

See also
One Belt, One Road
Maritime Silk Road
Bangladesh-China-India-Myanmar Economic Corridor
ChinaPakistan relations
Gwadar Port

References

Notes
[321] Between 2014 and 2015, acts of terrorism
A. Which Pakistan alleges are supported by Indian intelligence services.
decreased by 50% in the province, while sharp decreases were also noted in deaths, kidnappings, and sectarian
killings.[324]

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