China & Pakistan to Reboot Joint Economic Corridor Project

An official visit by Pakistan's Prime Minister Shehbaz Sharif to China - his first to the country since taking charge in April - comes at a tumultuous time for Pakistan, both politically and economically.

China's President Xi Jinping and Pakistan's Prime Minister Shehbaz Sharif agreed, during a meeting in Beijing, to strengthen their strategic partnership and cooperation in key areas, including the China-Pakistan Economic Corridor (CPEC).

Both sides have identified trade, investment, infrastructure, agriculture, and information technology as the most important areas for cooperation.

The agreement by the two leaders to strengthen cooperation in the corridor was an expected outcome of the talks in Beijing. There are security concerns for Chinese capital and companies in Pakistan, but forays by terrorist, hostile forces will not intimidate both sides, Long Xingchun, president of the Chengdu Institute of World Affairs, said in an interview with Sputnik.

“The majority of the population in Pakistan supports the China-Pakistan Economic Corridor, but some are dissatisfied when it comes to a specific project. Some terrorist organizations and hostile forces, such as the Balochistan Liberation Army, pose a security threat to cooperation. Their goal is destruction and division, which is why they are opponents of the CPEC. Furthermore, some countries do not want to see the friendly development of cooperation between China and Pakistan. But from the perspective of Beijing and Islamabad, there is definitely positive support for the project in the world,” he said.

“Bilateral cooperation has faced some difficulties in the past, including the insecurity of Chinese employees in Pakistan. But overall, the project is progressing well,” the expert continues. “Chinese and Pakistani leaders have stated that partnership and cooperation in the CPEC has strengthened. This indicates that the parties are not intimidated by terrorist and hostile forces; they will continue to promote the construction of CPEC and actively develop relations between the two countries.”

The talks between the Chinese and Pakistani leaders, as well as "second track" meetings - ie, those involving high-ranking officials and heads of companies - will ease the revival of several infrastructure and investment projects which had been postponed: in an interview with Sputnik, Gleb Makarevich, an expert with the South Asia and Indian Ocean Group at IMEMO RAS, predicted that Beijing's political ethos could revive the financing of the CPEC.

“The wording about the revitalization of the corridor, actively used by the Pakistani side during the visit, suggests that under the previous government of Imran Khan, the joint project had certain difficulties. The project was launched under the government of Nawaz Sharif - the elder brother of the present prime minister, Shehbaz Sharif, who is trying to demonstrate the continuity of the plan, the special relationship with China and the importance of the corridor to Pakistan and the Pakistan Muslim League party led by Nawaz Sharif,” he said.

“The incumbent prime minister has the political will to intensify the implementation of projects within the corridor. He considers the corridor to be his party's project and wants to demonstrate the continuity of its policies. Shehbaz Sharif has a desire to prove to his Chinese partners and to the people of Pakistan that he is a more reliable partner than Imran Khan. The intensity of financial injections into CPEC projects under the previous government has declined, and the present prime minister is facing elections next year. Therefore, there will certainly be more funding for the corridor, which brings real benefits to the country,” the expert noted.

The energy projects of the CPEC have created more than 46,000 new jobs in Pakistan alone. These have also helped to ease the pressure on the foreign exchange deficit caused by Pakistan's dependence on energy imports. A joint mining project near the town of Saindak in Balochistan province brought $2.6Bln to the country’s treasury. The project involves MCC Resources Development Co Ltd (MRDL) on the Chinese side in mining, and smelting of copper. So far, the project has created more than 1,900 new jobs.

To date, 28 joint projects worth $18.8Bln have been completed. Another $34Bln of projects have yet to be completed. One of them is the construction of Main Line-I railway project worth $10Bln, which will connect Karachi with Peshawar. This railway is considered to be one of the transport pillars of the corridor. Other projects that the Pakistani side is asking Chinese partners to accelerate the construction are the $1.2Bln Karachi Circular Railway project, the $1.6Bln Azad Pattan, the $2.5Bln Kohala Hydropower Projects, and the $3Bln Thar Block-I coal-powered energy generation project.

The talks in Beijing are expected to strengthen Pakistan's ability to take advantage of China's experience in the creation and development of special economic zones. According to Sharif, establishing these zones within CPEC and inviting not only Chinese but other foreign companies is one of the promising areas of internationalization of the corridor.