China Pakistan Economic Corridor

The CPEC is a ongoing development megaproject which aims to connect Gwadar Port in
southwestern Pakistan to Chinas 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 ChinaPakistan 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 Chinas proposed 21 st century
Silk Road initiative.[4][5] According to a Firstpost report, 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 game changer 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]

History
The project was rst proposed by Ex President Asif Ali Zardari, Chinese Premier Li Keqiang and
Nawaz Sharif on 22 May 2013 in Islamabad.[10][11] The Pak-China Economic Corridor
Secretariat was inaugurated in Islamabad on 27 August 2013.[12] In February 2014, Pakistani
President Mamnoon Hussain visited China to discuss the plans for an economic corridor in
Pakistan.[13] Two months later, Pakistan Prime Minister Nawaz Sharif met with Premier Li
Kequiang in China to discuss further plans.[14] While the project took shape during Sharif's
tenure, the vision for an economic route stretches as far back as the Musharraf era.[15] In
November 2014, Chinese government announced that it will nance Chinese companies to build
$45.6 billion worth of energy and infrastructure projects in Pakistan as part of CPEC. Documents
quoted by Reuters show that China has promised to invest around $33.8 billion in various energy
projects and $11.8 billion in infrastructure projects which will be completed by 2017 at most.
The deal includes $622 million for Gwadar Port. According to Reuters, under the CPEC
agreement, $15.5 billion worth of coal, wind, solar and hydro energy projects will add 10,400
megawatts of energy to the national grid of Pakistan.[16] On 20 April 2015, Pakistan and China
signed an agreement to commence work on the $46 billion agreement, which is roughly 20% of
Pakistan's annual GDP,[17] with approximately $28 billion in immediate projects and the rest
allocated for projects in the pipeline.[18] The deal includes a $44 million ber optic cable[19]
and will add 10,400 Megawatts to Pakistan's energy grid through coal, nuclear and renewable
energy projects.[20] Also included are major upgrades to Pakistan's transport infrastructure,
including:

Karakorum Highway (Havelian in the Abbottabad District to Thakot)

Karachi-Lahore Motorway (Multan to Sukkur)
The Gwadar Port East Bay Expressway Project
Gwadar International Airport

Strategic Importance
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,[17] and oil pipelines through Pakistan would cut out ocean travel through Southeast
Asia.[21] The Asian Development Bank terms the project as CPEC will connect economic
agents along dened 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.[22]
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 corridorwill play a crucial role in
regional integration of the 'Greater South Asia', which includes China, Iran, Afghanistan, and
stretches all the way to Myanmar.[13]

Infrastructure
The rst phase involves development at Gwadar Port and the construction of an international
airport. It will be carried out by 2017, with Chinese companies expected to participate. The
Karakoram Highway connecting the two countries will also be widened, while the rail network
between Karachi in southern Pakistan and Peshawar in the north will be upgraded. The two
countries also plan a ber-optic communications link between them.

Security
The Express Tribune reports that Pakistan plans to train 12,000 security personnel to protect
Chinese workers on the corridor. Presently, 8,000 Pakistani security ocials are deployed for the
protection of over 8,100 Chinese workers in Pakistan.[23][24][25]

Projects
A total of 51 memoranda of understanding were signed in diverse sectors between China and
Pakistan during visit of Chinese president to Pakistan on 20 April 2015.[26]

References
1.

Economic corridor: Chinese ocial sets record straight. The Express Tribune. 2 March
2015.
2. Shah, Saeed (20 April 2015). Chinas Xi Jinping Launches Investment Deal in Pakistan.
Wall Street Journal.Retrieved 23 April 2015.
3. Chinas landmark investments in Pakistan. Express Tribune. 21 April 2015. Retrieved 21
April 2015.
4. Aneja, Atul (18 April 2015). Xi comes calling to Pakistan, bearing gifts worth $45
billion. The Hindu. Retrieved 23 April 2015.
5. Hussain, Tom (22 April 2015). Chinas Xi in Pakistan to cement huge infrastructure
projects, submarine sales. McClatchy News (Islamabad: mcclatchydc).
6. Here's why Indian strategists should worry about China's $46 billion funding to
Pakistan. Firstpost. 22 April 2015. Retrieved 22 April 2015.
7. Five areas where Pakistan will benet from the China president, Xi Jinping's visit.
Economic Times. 21 April 2015. Retrieved 21 April 2015.
8. Chinas new silk road: Whats in it for Pakistan?".Dawn News. 21 April 2015. Retrieved
21 April 2015.
9. MUCH OF INVESTMENT, $35 BILLION OF WHICH WILL GO TO ENERGY
PROJECTS, WILL BE IN FORM OF DISCOUNTED LOANS. Newsweek Pakistan. 21
April 2015. Retrieved 21 April 2015.
10. Li Keqiang urges development ofChina-Pakistan economic corridor". South China
Morning Post.
11. Backgrounder: China-Pakistan Economic Corridor.China Daily. 22 April 2015.
Retrieved 23 April 2015.
12. Pak-China Economic Corridor Secretariat inaugurated in Islamabad. The News
International. Pakistan. 27 August 2013.
13. Tiezzi, Shannon (20 February 2014). China, Pakistan Flesh Out New Economic
Corridor". The Diplomat. Retrieved 23 April 2015.
14. Nawaz Sharif, Li Keqiang to rm up plans for ChinaPakistan Economic Corridor. The
Times of India. Times ondia-economictimes.
15. Politicians hit out at 'unfair' Pakistan-China Economic Corridor. The Express Tribune.
22 April 2015.
16. China commits $45.6 billion for economic corridor with Pakistan Reuters.
17. Pakistan lands $46 billion investment from China. CNN Money. 20 Apr 2015.
18. Ministry Of Planning, Development & Reforms.pc.gov.pk (Press release).
19. China's Xi Jinping agrees $46bn superhighway to Pakistan.BBC. 20 Apr 2015.
20. What Chinas and Pakistans special friendship means. Washington Post (blog). 21 Apr
2015.
21. Pak-China ties: Gawadar port one part of a larger plan. The Express Tribune. 13 April
2015. Retrieved 23 April 2015.

22. Brunner, Hans-Peter (August 2013). What is Economic Corridor Development and
What Can It Achieve in Asias Subregions?"(PDF). ADB Working Paper Series on
Regional Economic Integration (117).
23. Details of agreements signed during Xi's visit to Pakistan.Dawn News. 21 April 2015.
Retrieved 21 April 2015.
24. Pakistan Wants to Become Chinas Newest Superhigh way to Europe. Bloomberg. 1 Apr
2015.
25. Economic corridor: 12,000-strong force to guard Chinese workers. The Express Tribune.
30 Mar 2015.
26. Xi hails Pakistan security help in west China; Pakistan vows more . Reuters. 21 Apr
2015.