China Pakistan Economic Corridor: Outlook & Challenges

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China Pakistan Economic Corridor: Outlook & Challenges
by
Professor. Dr. Zafar Nasir
Chairperson, Sciences & Technologies Department
Indus University, Karachi

China-Pakistan Economic Corridor (CPEC), a part of the One Belt & One Road initiative (OBOR), offers a historical opportunity to countries of the region to revive the ancient silk route and create a framework of regional connectivity. CPEC will not only serve the interest of China and Pakistan but will have salutary effect on the economies of the countries like Iran, Afghanistan, India, Central Asian Republic, and the region. CPEC or the connectivity initiative envisages to target cooperation in large number of sectors under its short to long- term plans. The surge in geographical linkages having improved infrastructure, upgraded road, rail and air transportation system with frequent and free exchanges of growth and people to people contact, enhancing understanding through academic, cultural and regional knowledge and culture, activity of higher volume of flow of trade and businesses will result in well connected, integrated region of shared destiny, harmony and development. It is surely a perfect opportunity for the Chinese and Pakistani entrepreneurs to work together and take advantage of the Belt and Road Initiative in a way that would serve the shared interest of both the countries and promote development and prosperity in the region. China Pakistan Economic Corridor is journey towards economic emancipation in the globalized world.
The Belt and Road Initiative is a recipe for win-win cooperation that will nurture common development and prosperity that offers a sort of open source platform and a road towards peace and friendship by enhancing mutual understanding and trust, and strengthening all-round exchanges. The Belt and Road run through the continents of Asia, Europe and Africa, connecting the vibrant economies of East Asia at one end and developed European economic circle at the other, with huge potential for economic development. It also eulogizes the long term Chinese ambition to give a flip to their companies to go global.
The upgraded Karakorum Highway (KKH) will not only link China to the Arabian Sea, but also to South Asia, West Asia and Central Asia. The Rail Link between china and Pakistan is also expected to contribute immensely to the success of the Economic Corridor. The two projects alone will usher in a new era of prosperity for the people living on both sides of the corridor similarly; the development of Gwadar Port will greatly benefit the regional countries. China and South Asia are linked historically and geographically through the Ancient Silk Road, and it is but natural that these two regions continue to be linked even more strongly. Well the die has been cast by taking the first step for greater connectivity by signing agreements on Economic Corridor, and actively pursuing them on-ground. This would benefit China, Pakistan and entire South Asia, and will facilitate the economic integration of whole region. Both countries have embarked on developing the China-Pakistan Economic Corridor, which will open up new opportunities for development, enhance connectivity and people to people contacts. This will translate into uplifting of infrastructure, and development of secure and efficient network of land, sea and air passages, facilitation in the form of free trade areas and investment opportunities that meet high standards and will also promote cross cultural exchanges among civilizations and built mutual trust to the benefit of people of both regions. ‘The Road and the Belt’” initiatives of China and now its implementation are entering into a new dynamic phase, where enhanced economic and commercial cooperation has become the center of our agenda. The collaboration is a fusion of multiple developments in the global, regional, bilateral, and domestic contexts. The ultimate objective of which is peace, prosperity and well-being of the people of the two countries, the region, and the world.
Expected Milestones: The initiative reflects the coming of age of China as a superpower and also highlights china’s ambition to be recognized as a global economic power. China and South Asia are linked historically and geographically through the Ancient Silk Road, and it is but natural that these two regions continue to be linked even more strongly. China and Pakistan have already signed number of agreements for greater connectivity on Economic Corridor, and actively pursuing them on-ground. The Karakorum Highway (KKH) which is being jointly upgraded by Pakistan and China will not only link China to the Arabian Sea, but also to South Asia, West Asia and Central Asia. A Rail Link between two countries is also envisaged to contribute to the success of the Economic Corridor. Significant nodes along the corridor would be Kashgar, Taxkorgan, Khunjerab, Peshawar, Islamabad, Lahore, Multan, Sukkur, Quetta, Karachi and Gwadar, and such other nodes/growth centers which may fall within the CPEC in future. Through CPEC an array of projects in number of sectors especially in the energy sector will be implemented thereby transforming the decades old Pak-China relationship to the All-Weather Strategic Cooperative Partnership, enriching the Pakistan-China Community of Shared Destiny, to ensure the perpetual continuity in our friendship from generation to generation. The commercial and industrial impact of this relationship shall ensure, all this lead to peace, prosperity and development.
Challenges & Issues: One of the major challenges apart from security issues would be the integration of the local labor in the CPEC equation. Surely Chinese human resource is much equipped and better qualified in comparison to Pakistan’s own. There is need to educate and train the Pakistan’s youth in number of areas especially in power sector to ensure their proper utilization in the upcoming projects. The universities and vocational institutions should be able to play their due role in capacity building of our youth. The youth should also be exposed to Chinese language to facilitate communication and learning. According to Mr.Ahsan Iqbal (Dawn, dated May 14) ,the CPEC’s impact on GDP growth would be around 1.5pc and this will result in the creation of around 1.5 million additional jobs according to some estimates. The local industry has shown apprehensions concerning their competitiveness within the context of CPEC as Pakistani goods are considered to be rather costly. This concern needs to be allayed. As per the Economic survey 2016-17, the CPEC initiative will substantively boost growth and job creation..It is also expected to accelerate urbanization and attract local as well as foreign direct investment in the country through increased competiveness. The relocation of Chinese industry will bring possible knowledge spillover and technological progress. The survey also sought to dispel the impression that the Belt & Road initiative will put pressure on the external sector of the country. It is true that trade deficit will rise in the short term as a result of import of machinery and equipment. In the long run however this will be compensated through import substitution and export expansion. The balance of payment position is also expected to show improvement as projects under CPEC reach the stage of completion..The general outlook is surely rosy keeping in view the expected dividend in the form of comprehensive socio-economic development, peace and prosperity for the people of both the countries in the region.

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