By: Sonalika Singh, Consulting Editor, GSDN
The China–Pakistan Economic Corridor (CPEC), the flagship component of China’s Belt and Road Initiative, stands as one of the most ambitious experiments in transnational infrastructure development and geo-economic integration in the twenty-first century. Conceived in 2013, CPEC aims to link Gwadar Port on Pakistan’s Arabian Sea coast with Kashgar in China’s Xinjiang Uyghur Autonomous Region through an extensive network of highways, railways, pipelines, energy projects, and digital infrastructure. With commitments exceeding US$62–65 billion, the corridor is envisioned not merely as a bilateral development programme but as a transformative initiative capable of reshaping regional connectivity, trade flows, and strategic alignments across South Asia, Central Asia, and the Middle East. More than a decade into its implementation, CPEC presents a complex picture it has achieved significant gains in energy generation and infrastructure development, yet it continues to face structural, political, security, and economic challenges that complicate its long-term success.
At its core, CPEC reflects a convergence of strategic and economic interests between China and Pakistan. For China, the corridor offers a shorter and potentially more secure route to the Arabian Sea, reducing reliance on the congested Strait of Malacca, through which a large share of its energy imports currently passes. For Pakistan, CPEC promises to address chronic infrastructure deficits, mitigate energy shortages, attract foreign direct investment, and position the country as a regional trade and logistics hub. Pakistan’s strategic location at the crossroads of South Asia, Central Asia, and West Asia enhances its potential to serve as a gateway for landlocked Central Asian states seeking access to warm-water ports. This convergence of geographic advantage and economic necessity explains why both Beijing and Islamabad continue to describe CPEC as a cornerstone of their “all-weather strategic partnership.”
One of the corridor’s defining features is that, unlike other Belt and Road corridors, it runs almost entirely through a single country. Most of its infrastructure traverses Pakistan before terminating at Gwadar, a deep-sea port of immense strategic significance due to its proximity to the Strait of Hormuz, a critical global energy chokepoint through which a substantial share of the world’s oil shipments passes. Gwadar’s development as a port, free trade zone, and logistics hub has the potential to transform Pakistan’s maritime profile while offering China a direct gateway to markets in the Middle East and Africa. By linking overland Silk Road routes with the Maritime Silk Road at Gwadar, CPEC occupies a central position in China’s broader vision of intercontinental connectivity.
The first phase of CPEC, often described as the “early harvest” period, focused primarily on addressing Pakistan’s severe energy crisis and infrastructure gaps. Prior to 2015, Pakistan faced daily electricity shortages of 4,000–6,000 megawatts, which constrained industrial productivity and economic growth. CPEC-related power projects including coal-fired plants, hydropower facilities, solar parks, and wind farms added over 6,000 megawatts to the national grid, significantly stabilizing electricity supply and reducing load shedding in major urban centres. Projects such as the Sahiwal Coal Power Plant, Port Qasim Power Plant, and the Quaid-e-Azam Solar Park contributed to a more reliable energy mix, enabling industries to operate more consistently and improving investor confidence. While the reliance on coal raised environmental concerns, these initiatives laid out the foundation for a more diversified energy portfolio that may evolve toward cleaner sources in the corridor’s second phase.
Infrastructure development has been another major area of progress. CPEC-funded projects have constructed and upgraded hundreds of kilometers of highways and motorways, including the Multan–Sukkur Motorway, the Hakla–Dera Ismail Khan Motorway, and key sections of the Karakoram Highway. These transport corridors have reduced travel times, improved freight efficiency, and enhanced domestic market integration. Fiber-optic links between Pakistan and China have strengthened digital connectivity, facilitating telecommunications, data exchange, and e-commerce growth. Developments such as the Gwadar Eastbay Expressway and the New Gwadar International Airport further reinforce the port’s potential as a future logistics hub. Collectively, these projects have improved internal connectivity and laid the groundwork for Pakistan’s emergence as a regional transit state.
CPEC has also produced measurable socio-economic benefits, though their distribution remains uneven. Corridor-related projects are estimated to have generated over 200,000 jobs, benefiting engineers, technicians, and skilled workers across Pakistan. Improved electricity supply has supported small and medium enterprises, while infrastructure expansion has enhanced access to healthcare, education, and markets in remote areas. In Balochistan, Gwadar’s development has introduced vocational institutes, healthcare facilities, desalination plants, and industrial zones, contributing to local economic activity. However, perceptions of unequal benefit distribution and limited local participation continue to fuel grievances, highlighting the need for more inclusive development strategies.
Foreign direct investment linked to CPEC has provided a critical stimulus to Pakistan’s economy. China has emerged as Pakistan’s largest bilateral investor, with investments spanning energy, infrastructure, manufacturing, and industrial parks. Trade between the two countries has expanded, reinforcing economic interdependence. Special Economic Zones (SEZs), including Rashakai in Khyber Pakhtunkhwa and Allama Iqbal Industrial City in Faisalabad, aim to attract export-oriented industries, promote technology transfer, and integrate Pakistan into global value chains. These zones offer tax incentives, modern infrastructure, and streamlined regulations designed to stimulate industrialization and diversify exports beyond traditional sectors such as textiles.
The transition to CPEC Phase 2 reflects a strategic shift from infrastructure-led development toward industrial cooperation, agricultural modernization, digital connectivity, and green energy. This phase emphasizes business-to-business partnerships, export-oriented manufacturing, and technological innovation. Agreements have been signed to establish industrial parks in sectors such as home appliances, steel, textiles, and electronics. Agricultural collaboration focuses on modern farming techniques, water management, and value-added agro-exports. The digital corridor aims to expand broadband access, promote e-commerce, and bridge Pakistan’s digital divide. These initiatives align with Pakistan’s long-term development goals while reflecting China’s growing emphasis on sustainable and green development.
Despite these achievements, CPEC’s long-term success remains uncertain due to persistent challenges. Security concerns are paramount, particularly in Balochistan, where insurgent groups have targeted Chinese nationals and infrastructure projects. High-profile attacks on diplomatic missions, educational institutions, and economic facilities underscore the risks facing foreign workers and investors. Such incidents not only threaten lives but also increase project costs and deter investment. Addressing local grievances through inclusive development, improved governance, and community engagement is essential for enhancing security and ensuring the corridor’s sustainability.
Pakistan’s macroeconomic instability presents another major obstacle. Rising external debt, currency depreciation, inflation, and fiscal deficits have constrained the country’s capacity to finance large-scale projects and meet repayment obligations. A significant portion of Pakistan’s external debt is owed to Chinese lenders, raising concerns about debt sustainability and financial dependence. While CPEC investments have stimulated growth in certain sectors, the anticipated broad-based economic transformation has been slower than expected. Several SEZs remain underdeveloped, and bureaucratic inefficiencies continue to delay industrial projects.
Political instability and governance challenges further complicated implementation. Changes in political leadership have introduced uncertainty regarding CPEC’s transparency, cost structures, and alignment with national priorities. Allegations of corruption, inadequate provincial consultation, and politicization of projects have undermined public trust. Ensuring policy continuity, transparency in contracts, and equitable provincial participation will be critical to maintaining investor confidence and fostering national consensus.
Regional disparities and public resentment also pose significant challenges. Critics argue that CPEC projects disproportionately benefit Punjab and Sindh while neglecting less-developed regions such as Balochistan and Gilgit-Baltistan. Local protests in Gwadar have highlighted concerns over limited access to electricity, clean water, and employment opportunities for residents. Addressing these concerns through inclusive policies, local hiring quotas, and community development programmes is essential for building social legitimacy and preventing further unrest.
Environmental sustainability remains an increasingly urgent issue. The reliance on coal-fired power plants in CPEC’s initial phase has drawn criticism due to carbon emissions and ecological degradation. Infrastructure projects have disrupted local ecosystems and fisheries, particularly in coastal areas. As Pakistan faces climate vulnerabilities such as water scarcity and extreme weather events, integrating renewable energy and environmental safeguards into future CPEC projects is imperative. The emphasis on green energy in CPEC Phase 2 signals progress, but effective implementation will determine its impact.
CPEC’s geopolitical implications extend beyond bilateral relations. For China, the corridor enhances strategic depth and diversifies trade routes. For Pakistan, it elevates geopolitical significance by positioning the country as a transit hub linking Central Asia, the Middle East, and Africa. However, the project has generated apprehension among regional actors, particularly India, which opposes CPEC on sovereignty grounds because segments of the corridor pass through Pakistan-administered Kashmir. India views the corridor as part of a broader Chinese strategy to expand its strategic footprint in the Indian Ocean region. In response, New Delhi has invested in alternative connectivity initiatives such as Iran’s Chabahar Port and the International North–South Transport Corridor.
Afghanistan and Central Asian states view CPEC as both an opportunity and a risk. Integration into corridor networks could facilitate trade, infrastructure development, and access to global markets. However, concerns persist regarding dependency, sovereignty, and equitable benefit distribution. Regional cooperation, transparency, and multilateral engagement will be essential to transforming CPEC from a bilateral initiative into an inclusive regional framework.
Ultimately, the question of whether CPEC is seeing success in Pakistan does not yield a simple affirmative or negative answer. The corridor has undeniably transformed Pakistan’s energy landscape, improved infrastructure, attracted investment, and enhanced the country’s strategic relevance. Yet persistent security threats, economic vulnerabilities, governance weaknesses, environmental concerns, and regional tensions continue to constrain its full potential. CPEC’s future success will depend on Pakistan’s ability to implement structural reforms, ensure transparent governance, promote inclusive development, and prioritize environmental sustainability.
As CPEC enters its second decade, it presents an opportunity for recalibration. By shifting focus toward industrialization, technological innovation, human capital development, and green growth, the corridor can evolve into a comprehensive development framework rather than a purely infrastructural project. If managed effectively, CPEC could reshape Pakistan’s economic trajectory and redefine patterns of regional connectivity. However, its ultimate success will hinge on whether the benefits extend beyond physical infrastructure to foster inclusive prosperity, institutional resilience, and sustainable development.
About the Author
Sonalika Singh began her journey as an UPSC aspirant and has since transitioned into a full-time professional working with various organizations, including NCERT, in the governance and policy sector. She holds a master’s degree in political science and, over the years, has developed a strong interest in international relations, security studies, and geopolitics. Alongside this, she has cultivated a deep passion for research, analysis, and writing. Her work reflects a sustained commitment to rigorous inquiry and making meaningful contributions to the field of public affairs.
