China-Pakistan Economic Corridor and Its Impact on Region

An international trade route in Pakistan just started up by a Chinese vessel transferring goods to the Middle East and Africa. The economic route is being developed by China in Pakistan is likely to make huge amount of economic advantages for both countries.

China-Pakistan Economic Corridor CPEC is one of the most important developments of the ‘One Belt, One Road’ projects started by China that aims to link the China with Europe and Africa making the most important country in world economic affairs. CPEC connects northwestern region of Xinjiang of China with Pakistan’s Port of Gwadar on the Arabian Sea via a network of Highways, Rail system (2,500 km road and rail Route) and Pipelines to transport oil, gas and other resources. The investment of $46 billion by China Is not limited to roads and rail link but also on other infrastructure projects which include development of Gwadar port, a new international airport in Gwadar, and several energy projects that will add around 10,400 MW in National Power Grid.

Benefits to China:

CPEC brings unlimited benefits for China as when the structure of the corridor will be completed, it will expand to more trade routes between China, Middle East and Africa. As China is the biggest energy consumer so oil transferring through pipelines from Pakistan would reduce the transit time for china.

Middle East exports crude oil to china and this is being moved by Sea covering 10,000 miles to reach China. After completing CPEC Project it will be reduced to 2500 KM through Gwadar Port to Kashgar.

CPEC will also provide China unparalleled reach to energy rich markets of Central Asia and Afghanistan. These regions are collectively perceived as the next big things in terms of energy and natural resources. China is utilizing this for securing its energy needs as well as having influence on the future energy sources as now held by US over the gulf countries.

CPEC will also give economic benefits to flow to less developed regions of western China containing Muslims majority city Xinjiang and hopes to eliminate the unrest there.

CPEC will provide China an additional Sea Port opening to the world and the capability to blockade the sea supplies to any future opponents by having a port at Gwadar.

Benefits to Pakistan:

Pakistan today is starving for foreign investment in country because of security situation. Foreign companies may set up distribution networks to fulfill domestic demand after completion of Gwadar Port.

After the successfully implementation on CPEC it will be a signal for the world that Pakistan is truly open for business and its inexpensive labor and fresh educated demographic is an alternative to India, Bangladesh and South East Asia etc.

However, CPEC grantees a permanent Chinese existence in Pakistan, it also assures Pakistan’s stability. Chinese investment in Pakistan will make a strong China-Pakistan relationship which is a good thing for stability of Pakistan and China will also not want a destabilized Pakistan due to its interests in the region.

CPEC from all counts will prove a game changer and will make China a backer in Pakistan’s stability and security. It is a win-win situation for both countries. It will greatly expand the scope for the sustainable and stable development of China’s economic development.

CPEC and impact on Balochistan:

The Balochistan province is the largest province of Pakistan and its importance lies in the concentration of natural resources. Regardless of this, it has remained the underprivileged province in country. The province is rich in natural resources, but the lesser and unskilled population because of the negligence of concerned authorities is a barrier in utilizing those resources. A low rate of urbanization and a high rate of unemployment are the reason behind low annual growth rate.

The development on Gwadar Port has been the most important development in recent years. The port would be a game changer for Balochistan, country and region as well. Gwadar would be an economic hub and will contribute towards the progress of the whole province, subsequent in addressing the several economic and social problems of Balochistan and also would contribute towards reducing unemployment in province. Micro and small medium sized industries in province would also contribute towards accomplishing greater benefits for the local residents. There is a need to build a positive image of the China Pakistan Economic Corridor through electronic and print media to remove misconceptions of the locals. It is important for the Pakistani government to make sure that people of Balochistan are fully included in the development and are also given benefit.

Challenges to CPEC:

Despite its strategic importance both for Pakistan and China, the CPEC is not without challenges. It is surrounded by Some regional security and political challenges. Regional security situation could be the severe issue to the project as it passes through some security threatens areas especially Balochistan province and some areas of FATA. Therefore, security of the whole region is a severe concern for China and its interests in province of Balochistan. Some political parties are raising up serious objections to the CPEC project. Objections are being raised despite guarantees by the federal government that this project will offer equal opportunities to all the provinces in Country.

The greatest challenge comes for the CPEC is from competitors, the most important is the Iranian port of Chabahar which is few miles away from Gwadar. India has already started a counter move by signing an agreement with Iran and Afghanistan to progress on the Chabahar port. Chabahar port is already functioning with basic infrastructure, whereas Gwadar port still a work in progress. The development of the Gwadar port and the foreign investment will be affected by the insurgence in Balochistan.

Conclusion:

Beside all the challenges and problems, CPEC is a very Critical Infrastructure corridor for both China and Pakistan. The corridor is a mutually beneficial development which fulfill the goals of both countries. For China it offers an alternate route to import Energy and find new markets for its goods to Middle East and Africa. For Pakistan it supports to counter Indian influence in the region and connect Eurasian region with South Asia and provide a much needed base to start its economic growth.