PAK-CHINA RELATIONS UNDER CPEC

(China-Pakistan Economic Corridor)

Muhammad Azeem Sheikh 18-ME-133

Table of Contents
List of Figures ………………………………………………………………………………… 1
List of Tables ......………………………….………………………………………………… 1
List of Graphs ………………………………… ………………………………………….… 1
Abstract …………………………...…………………………………………………………....2
Introduction ……………………………………………………………………………...... 2
Overview ……………………………………………………………………....................……3
Phases of CPEC ………………………………………………………………………….… 4
Geographic View of CPEC ………….…………………………………………………….…. 5
Pakistan China Economic Corridor 1

Developments/Projects in CPEC ............................................................................................. 5

1.3 Development in Transportation ……………………………………………………………. 7

1.4 Financial Developments ………………………………………………………………….…. 8

1.5 Financial Developments ………….....................……………………………………………. 9

CPEC and Pak-China Relations …………………………………….…...….…...……10

2.2 Impacts on China …………………………………………………………….… 13

Conclusion .….……………………………………………………………………………13
References …………………………………………………………………………………….… 15

List of Figures

Figure No 1: ……………………………………………………………….……………………. 3
Figure No 2: ………………………………………………………….…………………………. 5
Figure No 3: ………………………………………………………….…………………………. 7
Figure No 4: ………………………………………………………….…………………………. 8

List of Tables and Graphs

Table No 1: ………………….…………………………………………………………………4
Table No 2: .……………………………………………………………………………………4
Table No 3: …………………….………………………………………………………………7
Graph No 1: .…………...……………………………………………………………………. 6
Graph No 2: .…………...……………………………………………………………………. 7
Graph No 3: .…………...……………………………………………………………………. 9
Pakistan China Economic Corridor 2

ABSTRACT
Today, we are living in the world of Progress. Every country is trying to become more developed
than the other. Currently, no one wants to move towards war rather than they strongly build up
themselves. States felt that it is impossible to fulfil all the needs of people lonely without support
and cooperation of other countries. Keeping in view this fact, different countries are building
partnership with other states to make them stable and powerful. This is the reason that China and
Pakistan, both have been good friends from the very first day of relations.

Road and Transport Corridor has an undeniable significance in the progress of a country.
This is the exact study that determines the socio-economic effect of China-Pak Economic
Corridor. This project is very crucial as it will be a golden opportunity for China to get approach
to the Arabian Sea by a short and safe route, saving time and billions of economic charges on
shipping while on Pakistan's part, it will meet the current energy crisis in Pakistan and will boost
its economy.

INTRODUCTION

CPEC (China Pakistan Economic Corridor) is the economic project between two neighbor
countries, China, and Pakistan. It is a strategic economic project to increase the economic
linkage between Pakistan and China, but it also joins Asia, Africa, and Middle East countries
together. Its importance is increasing day by day. Though, we are observing impact of CPEC
only on Pakistan Economy and China Economy but, its impact is on the whole world as China is
an emerging superpower. The project will bring a new revolution particularly in Asia and Central
Asian countries. Also, it has a great impact on Pakistan's debt from IMF. CPEC is really a
blessing for Pakistan and helpful for China to achieve their targets.

Beginning of 21st Century is considered the Economic globalization. China and Pakistan
have good relationship background. In 1963, first they signed their bilateral agreement. Later,
they made a lot of agreements to make their relationship best. The main project between China
and Pakistan was signed in May 2013 and started finally in 2015. (Abid, 2015)1

1
: Abid, M., & Ashfaq, A. (2015). CPEC: Challenges and Opportunities for Pakistan.
Journal of Pakistan Vision,16 (2), 142-169. Retired fromhttp://pu.edu.pk/images/
journal/studies/PDF-FILES/Artical-7_v16_2_2015.pdf
Pakistan China Economic Corridor 3

OVERVIEW OF CPEC

Pak-China relation basically stands on four pillars and interests.

Economic
assistance

Pak- Shared
Geostrategic
Interest China Internal
Security
Cocern

Relation
Both
Countries'
Energy
Security

Both the countries being the fair-weather friends, are called " The iron Brothers". In 2013, Prime
Minister of Pakistan, Main Nawaz Sharif on visit China, signed different treaties and projects of
construction under CPEC. However, the practical work on CPEC sustained due to political issues
in Pakistan. In 2015, Mr. Nawaz and Chinese President XI Jinping together, signed fifty-one
agreements. On Chinese President Mr. Xi Jinping's visit to Pakistan on 20-21st April 2015,
Pakistan's Prime minister Nawaz Sharif said that Friendship with China is one of the major
concerns in foreign policy of Pakistan. While, President of China said, “Though I have been
to Pakistan for the first time yet I realized that I came to my brother's home”[ CITATION
Tha15 \l 1033 ]2. China intended to invest $ 46 Billion (U.S dollars) as foreign investment in
Pakistan. It was the largest foreign investment after US aid in Pakistan. Now, you can imagine
that how much important is CPEC for Pakistan[ CITATION Sia14 \l 1033 ]3. There are different
projects aimed on CPEC between China and Pakistan. In those projects, some are called Mega
projects like highways, railways, optical fiber, energy, and ports. CPEC will join China and

2
Tharoor, I., 2015. What China ‘s and Pakistan ‘s special friendship means. Retrieved from
https://www.washingtonpost.com/news/worldviews/wp/2015/04/21/what-china-and-pakistans-special-friendship-means/ [Accessed 10 June
2017].

3
Sail, S. (2014). The China-Pakistan Economic Corridor: An Assessment of Potential Threats786 and Constraints. Conflict and Peace Studies
Pakistan China Economic Corridor 4

Pakistan with Africa and Middle East and minimize the distance of 12000 Km between China
and Middle East.

TABLE # 01: TOTAL CPEC FUNDS AND PROJECTS SHARE

Name of Projects Billions US$ Percentage

Energy 32.66 71
Gwadar Port 1.84 4
Roadways 5.98 13
Railways 3.68 8
Others 1.84 4
Total 46 100%
NOTE: Taken from Ministry of planning, development & Special Initiatives

PHASES OF CPEC

CPEC is divided into three phases for its completion. These phases started in 2014 and ends in
2030. The first phase of CPEC (Gawadar Port) was initiated by our former Chief of Army Staff,
General Raheel Sharif and Prime Minister of Pakistan, Mian Nawaz Sharif with Chinese
government representatives on November 13, 2016. The upcoming leader country of the world is
much closed to Pakistan because they both are in a strong friendship bond. And by the time their
friendship is getting better due to this main project, China Pakistan Economics Corridor. Now
the following table tell us that what are three phases and in these phases what they have required
to complete.

TABLE #02: DETAILS OF CPEC PHASES

Estimated year of
Phase Named Detail of Projects
Completion
Gwadar Port,
1 Short-term
Up to 2017 Construction of roads,
Projects
International Airport
2 Mid-term Linking and Construction
Up to 2025
Projects of Motorways
3 Final term Collaboration in all
Up to 2030
Projects sectors
Note. The phases and details of the CPEC project is presented, source “The News”
Pakistan China Economic Corridor 5

GEOGRAPHIC VIEW OF CPEC

The Mega Project CPEC passes through different parts of Punjab, Sindh, Baluchistan, Khyber
Pakhtunkhwa (provinces of Islamic Republic Pakistan) & Gilgit Baltistan and joins Gawadar in
Baluchistan to Kashgar in western China. Due to CPEC, Pakistan would get three alignments for
investment and infrastructure. They are Eastern, Western and Central alignments.
NOTE: Taken from Dawn News

 The eastern alignment comes from Gawardar and after passing in sequence through Sindh
(Interior), Punjab Islamabad, Haripur, Abbottabad, Mansoura, Muzaffarabad (capital of
AJK) and reaches through Khunjrab.
 The central alignment passes through Pamir Plateau, Karakoram mountains, Taxila,
Peshawar, and Torkham.
 Western alignment runs through Baluchistan, Punjab, Islamabad, Abbottabad and
connects with eastern alignment[ CITATION Ran15 \l 1033 ]4.

DEVELOPMENTS/PROJECTS IN CPEC

The following progresses are established in the first phases of the CPEC

1.1 DEVELOPMENT IN INFRASTRUCTURE

4
: Rana, S., & Khan, T. (2015, May 17). China-Pakistan Economic Corridor: Lines of development – not lines of divide. The Express Tribune.
Retrieved from https://tribune.com.pk/story/887949/china-pakistan-economic-corridor-lines of-development-not-lines-of-divide
Pakistan China Economic Corridor 6

If we talk about CPEC infrastructural projects, China has completed the institution of China-
Pakistan friendly relationship elementary school, first-aid middle and plans to construct the job
technical school and different comes regarding native people’s support in Gwadar. Recently, we
tend to are happy to envision that variety of recent comes are completed, together with the
Sachal power station, Dawood power station, the Jhimpir UEP power station 5 and Linyi Trade
town in Gwadar. At a similar time, China and Islamic Republic of Pakistan are actively
exploring the main cooperation comes for next section. the 2 sides have reached accord on the
ML1 railway up-gradation project that is below discussions on finance and technical solutions

1.2 DEVELOPMENT IN POWER SECTOR

At the venue of the completion ceremony of the Sahiwal power plant 6, the central room of the
facility station. within the spacious and bright space, there are young Pakistani technicians were
masterful in operative instrumentality and observation power stations, with their enthusiasm for
work on their faces. The Chinese corporations not solely bring investment and taxation, however,
additionally train native peoples into masterful employees to urge higher-level jobs, particularly
tykes. At Gwadar, Chinese are finance in an exceedingly massive food process base. once its
completion, it'll promote the event of complete industrial chain from the food cultivation, fishing

5
The News International (Rawalpindi), 5 July 2016

6
Today (Islamabad), 28 September 2016
Pakistan China Economic Corridor 7

to process, and effectively improve value-added price of product, and make an outsized range of
job opportunities for native workers Our cooperation in the main focuses on introducing
advanced technology and management expertise, rising Pakistani production technology and
industrial system and enhancing the aggressiveness of Pakistani product in international market.
In four years of CPEC7 construction, Islamic Republic of Pakistan has enjoyed a quick
momentum of economic development. folks became a lot of assured concerning the longer term
of the country. Third, CPEC is associate open and inclusive cooperative initiative.

Table No 3: Summary of CPEC and Other Power Sector Projects

Investment (US$ bn.) No. projects

C PE C 19 2 3 .6

E n e rg y 15 1 7 .7

Infrastructure 4 5.9

Non-CPEC energy 13 25.4

T o ta l 32 4 9 .0

Source: Staff estimates based on discussions with the Pakistani authorities.

1.3 DEVELOPMENT IN TRANSPORTATION

7
Pakistan Today (Islamabad), 22 September 2016.
Pakistan China Economic Corridor 8

China has industrialized a train that can be used in this project it will attain a theoretical speed
of about four hundreds kilometers per hour which can substantially reach a speed of 350 km per
hour. With the help of this kind of trains in our country, .we can cover a very long distance from
one end of Karachi to other end that is the Gilgit in about three hours or less due to the great
venture lay aside between the Pakistan and China for development of both countries and
especially the South Eastern sector of Pakistan 8. In this way, the long distances between the
Urban and pastoral societies became very narrow due to Marvelous growth in the transportation
division.

1.4 REGIONAL CONNECTIVITY

The 1800-kilometer railway can greatly facilitate the movement of individuals and merchandise
from north to south in Islamic Republic of Pakistan, creating the economic artery of Islamic
Republic of Pakistan stronger9. the two governments also are cooperating on industrial parks

8
Pakistan Observer. (2017, June 20). CPEC One of Best Performing Projects of Belt
and Road Initiative

9
The Express Tribune. (2015, April 26). Agreements Signed Between China and
Pakistan
Pakistan China Economic Corridor 9

with target of promoting the event of native labor-intensive industries. I am convinced that
CPEC is sort of a treasure with new potentials incessantly being exploited. The success of CPEC
has embodied the Endeavor and efforts of our 2 countries. It comes with a solid foundation.
Firstly, CPEC could be a win-win cooperative initiative that includes mutual profit. By
advocating the Strap and Highway Inventiveness, the China pursue is not the good thing about
one single country. neither is its unilateral help from China; however, it is to put together
mobilize the keenness of all parties to bring benefits of finance, and technology to native
demand. The principle of "Belt and Road" Initiative is achieving shared growth through joint
discussion and collaboration, that embodies all the participants as beneficiaries. each native folk
and the region can get pleasure from this Initiative.

1.5 FINANCIAL DEVELOPMENTS

The discoveries show that the CPEC venture, Gwadar Port, and in this way the science gas
pipeline are promising turns of events and new open doors for Chinese financial and vitality
security inside the district. Accordingly, China–Pakistan should consider all interior and outside
perspectives that compromise the finish of those ventures 10; to figure higher and extra intently
along, and to affirm higher application and execution of existing understandings in an ideal way.

20,000

14,573
15,000
12,117
10,207
9,282
10,000
7,629

5,000 2 , 8 56 2 , 9 16
1 , 9 30 2 , 5 09
1 , 5 73

0
201 0 201 1 201 2 201 3 201 4

-5,000
-6 , 0 56
-7 , 9 30 -7 , 3 51
-10,000
-9 , 2 09
-12,06 9
-15,000

Exports Imports Financial Deficit

10
“Sino-Pak bilateral trade reaches dollar 18.9 billion: Chinese ambassador”, Pakistan Today
(Islamabad), 28 September 2016
Pakistan China Economic Corridor 10

For sure, the examination looked for to get a handle on whether the new improvement in China–
Pakistan

relations could be a distinct advantage that may correction Beijing's monetary and vital impact
inside the geographic zone. Pakistan, for the anticipated future, would potentially assume a key
job in China's arrangement and commitment inside the geographic region. The $6400011 chance
offered by China– Pakistan commitment is that it changes the extent of Beijing's impact from
geo financial to geo-key; and in this way, the joint endeavors would have a significant
transformative effect on revelatory its range of authority inside the geographic region, South and
Central Asia, sea and on the far side. Nations will merge the ordinary agreeable relationship,
extend reasonable collaboration everything considered regions, and push the helpful association
to a substitution. However, the $64000 distinct advantage is not the goal of building joint
endeavors; it is their ideal usage that can possibly have a local effect.

CPEC and PAK-CHINA RELATIONS

The President of our neighboring country china arguments that China advantages from the
international community and China is willing to produce a lot of public merchandise
reciprocally. we tend to believe that solely frankness and cooperation can bring North American
country vitality and progress. The Mustagh Range road not solely connects China and Islamic
Republic of Pakistan however might also promote the property between Pakistan and different
regional countries. The CPEC has been advanced in an exceedingly comprehensive and balanced
manner with openness and transparency. Our cooperation is not against any third party. The
CPEC is helpful to the prosperity of the region and aims at promoting the well-beings of the
folks. We tend to be against any conceive to undermine project. In this way, greater property
with Xinjiang 12Uighur Autonomous Region is most likely going to open numerous exchange
possibilities for China and Asian country.

PAK-CHINA KEY ASSOCIATION

12
Speech by H.E. Xi Jinping, President of the People’s Republic of China, At the Parliament of
Pakistan, Islamabad, 21 April 2015, Ministry of Foreign affairs, Beijing
Pakistan China Economic Corridor 11

The guarantee connection among China and Islamic Republic of Pakistan has verifiable ties
stationary in Beijing's monetary, political, and military assistance to capital of Pakistan. China's
tactical corporation with Islamic State of Pakistan adopts a crucial place in organization, India
upsurges the situations for an Asian country, by spreading danger of demonstration of
viciousness to the land developed by Pakistan in the Baluchistan region and Gwadar port.
Islamic State of Pakistan is at the guts of Beijing's territorial desire and military assistance
projection abilities to its stupendous designs for a substitution Silk Road. Pakistanis furthermore
dedicated to and teamed up in Chinese endeavors to battle against pressure, nonconformity, and
thusly the non-common political hypothesis. China has been constructing fast railroads in
Indonesia and Russia, and it has been putting resources into rapid railroad's offered for the
current year. CPEC can never take the road of plundering as was done by the colonialists, and
the zero-sum thinking in conflict era. Instead, CPEC has chosen a brand-new path of mutual
profit and shared prosperity. Secondly, CPEC embodies the spirit of sincere help between the
two countries to satisfy Pakistani emergency wants, thousands of Chinese employees are off
from their motherland and favored ones. They are operating exhausting over time for completion
of the ability plants, roads and port comes with prime quality. There is no different country
within the world that desires to envision a lot of developed and prosperous Islamic Republic of
Pakistan than China will.

GLOBAL INTEREST OF NEIGHBOURING NATION

Iran, and Russia have showed eagerness inside the China and Pakistan Economic corridor and
underneath the Shanghai Teamwork, a break for local conversation property is collected. Asian
nation does not deliberate Gwadar Port as supplement the fundamentals of each nation. when the
invigorating of international business approvals on Asian country about exportation a great deal
of oil and upgrading its exchange with China. Asian country conjointly totally underpins the
CPEC because of it is envious to win monetary turn of events. Russia is moreover insatiable of
upgrading its exchange with Central Asia and Asian country other than Pakistan, and along these
lines the CPEC gives that chance in additional to reinforcing Sino-Pak13 connotation to edifice an
amicable universe of suffering harmony and normal success. The world has gone into another
13
Pakistan upgraded to emerging markets status”, The Express Tribune (Islamabad), 15 July
2016.
Pakistan China Economic Corridor 12

time of Globalization and relationship and the countries have selected commonly helpful in
international policy practices. Those practices depend on financial coordination and security
collaboration, key association and making tranquil partnerships additionally has become the new
financial participation all the while Resultantly, the neighboring nations work together with each
other monetarily, so the entire district procures profits.

IMPACTS OF CPEC

Both countries China and Pakistan have much impacts on their economy due this Mega Project
China Pakistan Economic corridor. Different thinkers have separate views on this future project.

2.1 Impacts on Pakistan

Pakistan will enjoy a lot from this major Project CPEC in different fields of Energy.

 Quaid-e-Azam Solar Power Park Bahawalpur

This is the biggest solar energy producer in Pakistan, and this is due to this project CPEC.

 Lahore Line Metro Train:

It joins one end of Lahore to the other end, funded by China.

 Gwadar Port

Much expenditures are being done on Gawadar port to make it advance for global use.

 Roads of Pakistan

As this project start from one side to other side of Pakistan so roads are being polished. It is
considered that around $2-2.5 billion revenues14 per year in Pakistan Economy in two to three
years.

 Sahiwal coal fired power plant

This project is also a fruit of China Pakistan friendship. It produces almost 1.3MW energy.

 19 Power Plants

14
Board of Investment, “Country-wise FDI Flow Accessed 29 September 2016
Pakistan China Economic Corridor 13

Due to this investment , CPEC will deliver 12,114MW of energy for Pakistan in future.

 Direct Jobs (30,000) In Power and Infrastructure Sectors

Due to this project many jobs have been created and many more will come in next two phases.
These jobs are direct jobs related to plants15 etc.

 Karakoram Highway

It connects Thakot and Havelian with each other.

 Projected Annual Growth

CPEC will boost Pakistan GDP from 2.5% to 5% directly.

2.2 IMPACTS ON CHINA

China is a developed country and it is very beneficial for China developing and their exports. As
china is the country who exports 60% things of the world 16. Because it needs path for easy to
reach other countries to convey their languages in whole world. By using CPEC road China can
reach its goal in much less time than as compare to water way. In this its access to Gwadar port
becomes much easier than other way. China is a large populated country, it has almost all
geographic location from coasts to deserts and many more, and consequently has been on the
verge for more than three decades having a double-digit GDP growth rate. This is why China
today is in direct competition with the world’s biggest power (The US) and if China wants to
maintain its economic growth with the same rate till thirty years straight, it will need more than
what it currently holds today, it will certainly need access to the rest of the world labor for its
economic activity worldwide while a bigger market for its products made domestically.

Conclusion

In a nutshell, CPEC is the bond between Pakistan and China of about 2700 kilometers long
distance, railway as well as oil and gas pipeline. This linkage will surely take place of long
Chinese shipping route of about 12500 kilometers saving both extra time and high extra charges
for shipping and provide a safe and sound route for China to trade with the world. Pakistan

15
PCN (Pak China News). (2017a, June 8). CPEC Projects Create over 30,000 Jobs:
Officials
16
World Bank. (2017). Ease of Doing Business in china
Pakistan China Economic Corridor 14

warmly welcomes the CPEC project. CPEC has due significance in its prosperity and journey
from being developing to the developed country. It has positive economic impacts on the poor
residents of Pakistan by not only resolving the issue of current energy crisis but also providing
many job opportunities for the poor souls. It will enhance the business and empower trade that
will underground unemployment and poverty in Pakistan directly strengthening its economy. In
remote and rural areas of Pakistan, it will be the cause of provision of basic amenities like, health
and education. In any form, CPEC will have direct or an indirect impact on the living standard
of a common man being a "fate changer" for him. Besides this, it will enable Pakistan to enter
the family of BRI states. Conclusively, it would never be a wrong statement that CPEC is the
real blessing for Pakistan as it is more advantageous for Pakistan than China.