The China–Pakistan Economic Corridor (CPEC)[a] is a ongoing development megaproject which aims to connect Gwadar Port in southwestern Pakistan to China’s northwestern autonomous region of Xinjiang, via a network of highways, railways and pipelines to transport oil and gas.[1] The economic corridor is considered central to China–Pakistan relations and will run about 3,000 km from Gwadar to Kashgar. Overall construction costs are estimated at over $46 billion, with the entire project expected to be completed in several years.[2][3] The Corridor is an extension of China’s proposed 21st century Silk Road initiative.[4][5] According to a Firstpostreport, "this is the biggest overseas investment by China announced yet and the corridor is expected to be operational within three years and will be a strategic gamechanger in the region, which would go a long way in making Pakistan a richer and stronger entity than ever before."[6]
Other than transport infrastructure, the economic corridor will provide Pakistan with telecommunications and energy infrastructure. The project also aims to improve intelligence sharing between the countries.[7][8] China and Pakistan hope the massive investment plan will transform Pakistan into a regional economic hub as well as further boost the growing ties between Pakistan and China.[9] The Pakistani media and government called the investments a "game and fate changer" for the region.[10][11] According to The Guardian, "The Chinese are not just offering to build much-needed infrastructure but also make Pakistan a key partner in its grand economic and strategic ambitions."[12] The project will also open trade routes for Western China and provide China direct access to the resource-rich Middle East region via the Arabian Sea, bypassing longer logistical routes currently through the Strait of Malacca.[13]
During the state visit of President of China Xi Jinping to Pakistan in April 2015, he wrote in an open editorial that "This will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother." During his visit, Islamabad was dotted with slogans and signboards such as "Pakistan-China friendship is higher than the mountains, deeper than the oceans, sweeter than honey, and stronger than steel." [14]
In August 2015, the two countries signed 20 more agreements worth $1.6 billion to further boost the corridor.[15]
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| Gawadar Airport |
Strategic importance[edit]
| “ | The move represents a shift toward greater economic cooperation between Pakistan and China, which have long had close security ties amid common disputes with neighboring India. The corridor would give China access to the Indian Ocean and lead to investments that would help ease power shortages that are hindering economic growth in Pakistan. | ” |
— Bloomberg Business on April 1, 2015, [28]
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When the corridor is constructed, it will expand the number of trade routes between China, the Middle East and Africa. Energy security is a key concern for China, as it is the world's biggest oil importer,[23] and oil pipelines through Pakistan would cut out ocean travel through Southeast Asia.[29]
The Asian Development Bank terms the project as "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."[30]
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."[19]
China plans to build oil storage facilities and a refinery at Gwadar Port, with oil transported to its Xinjiang Uighur Autonomous Region via road and pipeline. This will let it move energy and goods to inland China without going through the Strait of Malacca, which could be blocked by the U.S. or India should hostilities break out in the region. The project will also lead to development in western China, where tensions are simmering from activities by radical separatists.[31][32] Iran has also responded positively over the proposal to link the Iran–Pakistan gas pipeline with China, with the Iranian ambassador to China describing it as a "common interest" between the three countries.[33]
CPEC is considered economically vital to Pakistan in helping it drive economic growth.[34] Moody's Investors Service has 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.[35] A study by the Pew Research Center in 2014 found that 78% of Pakistanis have a positive view of China.[26][36]
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