Khalid Mahmood: How China Pakistan Economic Corridor is a game changer?


Khalid Mahmood Consultant/ CPEC | GREF talks to Centreline & DNA

Ansar Mahmood Bhatti

China-Pakistan Economic Corridor is a framework of regional connectivity which includes a number of infrastructure projects, energy cooperation and development of modern IT and transportation networks. It is a journey towards economic regionalization in the globalized world which brings a hope of better future of the region with peace, development and growth of economy.

Importance of CPEC in the Region

The fundamental objective of CPEC is to improve the living standards of people of Pakistan and China by building an economic corridor promoting bilateral connectivity, infrastructure, explore potential bilateral investment, economic and trade, logistics and people to people contact for regional connectivity.

CPEC will not only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, Central Asian Republic, and the region. The purpose of CPEC is the enhancement of geographical linkages having improved 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, flow of trade and businesses, producing and moving energy to have more optimal businesses and enhancement of co-operation. The living standards of people will increase along with industrial development. More jobs will be created to cater the masses. Power generation projects are also a very important part of this project. It will connect the regional countries together and through this win-win model will result in a well-connected, integrated region of shared destiny, harmony and development.

Moreover, China and Pakistan have reached consensus on the basis of “one corridor, multiple passages”, aiming to benefit the economic and social development of all regions in Pakistan. Right now, enormous efforts are being made to advance road connectivity in the western parts of Pakistan, and the Chinese side is cooperating with the Pakistani side to create favorable conditions for attracting investment in western and northern parts of Pakistan. With the implementation of various projects, CPEC will play an increasingly important role in promoting the economic development and uplifting living standard across different parts of Pakistan.

Challenges for CPEC

Despite the many opportunities that CPEC potentially affords, clearly there are challenges too.

  • Governance and Political Issues: CPEC could be an opportunity to enhance governance, but for CPEC to succeed in the first place Pakistan’s political and social governance is vital. The large amount of foreign investments must be allocated fairly with efficient distribution of development benefits. This will be a test of Pakistan’s political and social governance capabilities.
  • Prefeasibility Project Reports: The investors from China want to have a clear idea of the areas in which they can invest in this project but there no prefeasibility project reports prepared for this purpose. Thus, it is important to create these reports in order to guide the investors according to their particular preferences.
  • Dispute Resolution Mechanism: There does not exist any formally planned dispute resolution mechanism. Thus, it is important to create a legalized dispute resolution system for the mega project.
  • Security Challenges: Security threats still exist in the region and they pose a serious challenge to the successful completion of the CPEC project. Steps need to be taken to ensure the security of corridor for Pakistan as well as China in order to strengthen trade and development ties.
  • Reforms in Bureaucracy: There are certain challenges regarding the functioning and effectiveness of bureaucracy as it is not delivering in terms of development.
  • Cultural Implications: The cultural differences existing between Pakistan and China also pose a challenge towards creating social harmony between the CPEC partners.
  • Human Resource Development: The work ethic and education of CPEC employees is also a challenge to effective completion of all CPEC projects. Providing adequate training and awareness to all workers of CPEC is required in this regard.
  • Anti-CPEC Regional and Global Stance: India, Japan, United States and other like-minded European counties have out rightly shown their objections and animosity towards the CPEC project as the main beneficiaries would be China and Pakistan. Under such global criticism, the successful completion of CPEC has become a challenge for both the partner countries.
  • Unrest in Balochistan Province: Due to the fact that Gwadar port is located in province of Balochistan the ongoing so-called and foreign sponsored insurgency in the provinces poses crucial challenges to the success of CPEC project. Consequently, the benefits of CPEC investment can be accurately measured if its impact on terrorism can be calculated.
  • Chief Editor Centreline and Belet & Road magazine Ansar Mahmood Bhatti presenting copies to Consultant CPEC

How can CPEC really be a game changer?

The China-Pakistan Economic Corridor, linking Gwadar Port to the Chinese province of Xinjiang, is expected to be a game changer not only for Balochistan and Pakistan but also for the world trade.

On its completion, CPEC would be China’s biggest splurge on economic development in another country to date. It aims over 15 years to create a 2000-mile economic corridor between Gwadar Port to China’s North Western region of Xinjiang through 2,700 km long highway from Kashgar to Gwadar, railway links for freight trains, oil and gas pipelines and an optical fibre link.

  • Balance of power will be shifted from West to East as industrialization will grow along with job creation and cultural exchange. Financial cooperation will play an important role in economic corridor construction and operation. Multi-level cooperation includes Central bank cooperation for establishing bilateral payment and settlement to ease pressure on foreign exchange reserves.
  • Economy is expected to improve due to collaboration in banking and finance activities.
  • Once implemented CPEC has the potential of transforming Pakistan’s economy from a low growth mode (3-4%) to a higher and sustainable growth economy with low inflation, removing key infrastructural bottlenecks (energy, roads, highways, railways etc.), promoting balanced regional growth and development, shaping new industry clusters, improving living standards and social stability, and promoting regional connectivity. There is an estimated forecast of 2.5-3.0% increase in Pakistan’s annual growth rate.
  • The megaproject is likely to create 800,000 to 2.0 million new jobs in Pakistan. Power generated by newly built sources will reach 19.785 million KW, and length of optical fiber Cable will reach 2084km.
  • With its strategic location and potential for becoming the future economic and energy hub, Gwadar Port Project is the key focus of CPEC. The projects under CPEC will transform it into one of the world’s leading port cities having top-class commercial and tourist facilities, integrated infrastructure and investment opportunities.


According toChinese President Xi Jinping, “Pakistan and China are Iron Brothers” and the friendship between the two countries will emerge stronger in the coming years. The two neighbors have co-existed peacefully for the past thousands of years. The CPEC is a prized opportunity for Pakistan to realize its true strategic and economic potential and is regarded as a Game Changer for Pakistan and the region. The benefits of the project will materialize gradually and the require determination from Pakistan and China to achieve their cherished goals in the best possible manner.