Importance Of CPEC

Importance Of CPEC

The China-Pakistan Economic Corridor (CPEC) is partly a development scheme and partly strategic gambit. Although the Sino-Pakistani friendship has been labeled as “higher than the Himalayas”, perhaps it is time to refashion it with a greater qualifier. The CPEC represents a watershed moment in the Sino-Pakistani partnership: a reflection of enhanced and deepened bilateral relations. More critically for Pakistan, the CPEC comes at a time of rapidly evolving Chinese geopolitical ambitions, thereby, providing Pakistan a significant role, both economically and diplomatically, in this ambitious expansion.

Bilateral investment treaties (BITs) between China and Pakistan are the basis of China-Pakistan Economic Corridor. They include the establishment of multiple economic and industrial zones along with providing solutions to the energy crisis in Pakistan. The CPEC plan also includes the establishment of road and railway links between Pakistan and China. This will provide a short route for Chinese goods to be delivered to international markets in the fastest possible way.

China and Pakistan have developed strong bilateral trade and economic ties over the years. China has emerged as Pakistan’s major trading partner in terms of both imports and exports. Bilateral trade and commercial links between the two countries were established in January 1963 and a Free Trade Agreement was signed on 24 November, 2006 and implemented on 1st July, 2007. [1]

According to the statistics provided by Pakistan Economic Survey 2013‐2014, the volume of trade between Pakistan and China has increased from US$ 4.1 billion in the year 2006‐07 to US$ 9.2 billion in 2012‐13, representing an increase of 124 percent.[2] While China’s exports to Pakistan increased by one percent during this period, Pakistan’s exports increased by 400 percent, from around $600 million in 2006‐07 to $2.6 billion in 2012‐13. As a result, China’s share in Pakistan’s total exports has gradually picked up from four percent in 2008‐09 to 10 percent during the fiscal year 2013‐14.

CPEC is part of China’s efforts meant to strengthen its trade and commerce connectivity with different regions of the world. In September 2013, Chinese President, Xi Jinping emphasized on reviving the ancient trade routes connecting China, Central Asia and Europe by developing three main corridors through southern, central and northern Xinjiang, which connects China with Russia, Europe and Pakistan.

Bilateral investment treaties (BITs) are the legal agreements signed between states for establishing new relations. Public International Law gives us a detailed study of BITs and their historic relationship with states. States are legally bound to perform their duties as assigned in BITs. CPEC provides opportunities to business communities of both China and Pakistan. The following are some of the developing fields that will help foster a prosperous Pakistan:

  • It is a backbone of Pakistan’s economy and this corridor will help create new agricultural opportunities for Pakistan, especially in underdeveloped areas of Khyber Pakhtunkhwa and Balochistan.
  • New industrial zones will be established to boost new industries in Pakistan and Sino-Pakistani businesses will be looking to invest in these sectors. In general, there can be six types of industrial arrangements:
  1. Industrial Estate.
  2. Industrial Park.
  3. Special Economic Zone.
  4. Eco-Industrial Park / Green Parks.
  5. Technology Park.
  6. Innovation District.
  • Employment opportunities will be created in many fields.
  • The hotel industry will boost due to the rapid development of roads and economic zones.
  • CPEC will develop the Gawadar port, new road routes and economic zones in Pakistan.
  • Chinese investment will help strengthen the banking sector in Pakistan and boost Pakistan’s economy. Business transactions will help circulate money in the economy and the Pakistani rupee will rise in value.
  • New educational opportunities will be given to students of both countries. Many educational institutes in Pakistan provide standard Chinese classes and CPEC will provide new disciplines to these institutes.
  • New hospitals and health opportunities will be provided to the workers and people of underdeveloped regions of CPEC.
  • The Gawadar port, which is one of the world’s deepest seaports, is a game-changer not only for this region but for the entire world. A lease agreement was signed recently under which the Gawadar port was handed over to Chinese authorities for its development and maintenance.
  • New logistics services will be launched in Pakistan under CPEC. Pakistan Railways will also be part of this development. Car rental services, buses and logistics industries will improve.
  • New social and cultural norms will develop in this region. Pakistani people will start learning Chinese language and Chinese people will start learning Urdu.

For any global power to understand CPEC, it must understand China’s geopolitical ambitions and Pakistan’s economic and security concerns. The CPEC represents an international extension of Beijing’s endeavor to deliver security through economic development. As such, there is every reason to imagine CPEC benefitting other regional and global powers. For illustration, one can say that the investment in Pakistan will result in job creation, reduction in anti-state sentiments and generation of public resources (possibly directed towards improvements in local law and order). All of these echo the West’s grander strategy to tackle extremism and bolster the fight against terror. For the US and its NATO allies in Afghanistan, as well as Pakistan’s neighboring Iran and even India, this should ring the bells of good fortune. The CPEC ultimately stands to dramatically strengthen Pakistan against terrorist insurgents.[3]

The CPEC constellation doesn’t reflect Pakistan’s propensity for overselling the China card but instead, is more reflective of the economic and security profits the world stands to gain. It is a timely premium of Pakistan’s unwavering and successful campaign against militant sanctuaries in the north-west. For the world, CPEC is an opportunity to transform the region’s economic geography and showcase the ability to project soft power.



[1]  Safdar Sial. Pakistan Institute of Peace Studies, The China‐Pakistan Economic Corridor: an assessment of potential threats and constraints.
[2]Chapter 8 of Pakistan Economic Survey 2013-2014


The views expressed in this compilation are those of the author and do not necessarily represent the views of or any organization with which he might be associated.

Mian Nairab Khurshid

Author: Mian Nairab Khurshid

The writer is a lawyer teaching Constitutional Law.