Is China-Pakistan Economic Corridor about to make a comeback? Sharif’s Beijing trip holds the answer!
In recent times, the China-Pakistan Economic Corridor (CPEC) has been a subject of intrigue and speculation. With its potential to reshape regional dynamics and economies, the corridor holds significant importance.
Former Pakistani Prime Minister Nawaz Sharif’s upcoming visit to Beijing could be the key to unlocking the future of CPEC. His discussions with Chinese officials are awaited with bated breath by analysts and stakeholders alike.
The outcome of Sharif’s trip may indicate whether CPEC is poised for a resurgence, offering a glimpse into the evolving dynamics of Chinese-Pakistani relations and the broader geopolitical landscape.
Islamabad, Pakistan — Pakistan’s Prime Minister Shehbaz Sharif is slated to visit China on June 4 for a five-day trip that will involve high-level engagements with Beijing’s leadership. This visit comes at a critical juncture for the cash-strapped nation, which increasingly depends on its alliance with the world’s second-largest economy.
Reviving Economic Ties
Sharif’s itinerary includes stops in Beijing, Xi’an, and Shenzhen. Of particular note is Shenzhen, the southern city emblematic of China’s rapid economic rise since the 1980s, having been designated as the country’s first special economic zone by then-leader Deng Xiaoping. Pakistan is looking to emulate this success to rejuvenate its own economy, which is currently burdened by high inflation and a debt crisis.
The Significance of CPEC
At the core of Pakistan’s economic ambitions lies the $62bn China-Pakistan Economic Corridor (CPEC). Launched in 2015, CPEC was envisioned as a transformative project for Pakistan’s economy, intended to materialize through investments in a flagship seaport, power plants, and a web of road networks. Despite initial successes, the project has faced considerable hurdles.
The Belt and Road Initiative
CPEC is a crucial part of China’s larger Belt and Road Initiative (BRI), a vast infrastructure network aimed at rekindling the ancient Silk Road trade routes linking Europe and Asia. However, critics argue that the BRI extends China’s geopolitical influence and exacerbates the debt burdens of participating countries, including Pakistan.
Challenges and Criticisms
While there have been notable advancements in sectors like energy and transportation, the tangible benefits for Pakistan’s economy have been limited. Out of 21 planned power projects under the CPEC, only 14 have been completed, delivering a combined capacity of 8,500 megawatts. Despite these projects, economic productivity and growth have not met expectations.
- 21 Power Projects: 14 completed, 2 under construction, 5 yet to start
- 24 Transport Projects: 6 completed, 13 still pending
- 9 Special Economic Zones (SEZs): None completed, work in progress on 4
Debt and Economic Hurdles
The economic challenges extend beyond project completion rates. Pakistan’s external debt has skyrocketed from $59.8bn in 2013 to $124bn today, with $30bn owed to China. This mounting debt strain has forced Pakistan to seek additional loans, including potential bailout packages from the International Monetary Fund (IMF).
China’s Concerns
China has expressed its apprehensions regarding Pakistan’s security situation. In recent years, Chinese nationals working on CPEC projects have been targeted by armed groups, leading to casualties and heightened tensions. The safety of Chinese workers remains a top priority for Beijing, complicating future investments.
Governance Issues
Another significant concern is weak governance on Pakistan’s part, which has hampered the smooth execution of CPEC projects. Chinese stakeholders have frequently cited the lack of facilitation and bureaucratic hurdles as major impediments. The recently formed Special Investment Facilitation Council (SIFC), represented by top civilian and military officials, aims to address these bureaucratic bottlenecks and improve governance.
Economist Safdar Sohail suggests that Pakistan needs a forward-looking plan to truly harness the potential of CPEC, rather than focusing on short-term projects that might exacerbate its debt burden.
Shehbaz Sharif’s upcoming trip to Beijing holds the key to whether the China-Pakistan Economic Corridor can be revitalized, offering a possible lifeline for Pakistan’s struggling economy.