Pak China Economic Corridor Facts

  • View

  • Download

Embed Size (px)


details of the new agreement


ChinaPakistan Economic CorridorFrom Wikipedia, the free encyclopediaChinaPakistan Economic Corridor-

System information

Length:2,442 km (1,517 mi)

TheChinaPakistan Economic Corridor(CPEC)[a]is a developmentmegaprojectwhich aims to connectGwadar Portin southwestern Pakistan to Chinas northwestern autonomous region ofXinjiang, via a network ofhighways,railwaysandpipelinesto transport oil and gas.[1]Theeconomic corridoris considered central toChinaPakistan relationsand will run about 3,000km fromGwadartoKashgar. Overall construction costs are estimated at $46 billion, with the entire project expected to be completed in several years.[2][3]The Corridor is an extension of Chinasproposed 21st century Silk Road initiative.[4][5]According to aFirstpostreport, "this is the biggest overseas investment by China announced yet and the corridor is expected to be operational within three years and will be a strategic gamechanger in the region, which would go a long way in making Pakistan a richer and stronger entity than ever before."[6]Other than transport infrastructure, the economic corridor will provide Pakistan with telecommunications and energy infrastructure. The project also aims to improve intelligence sharing between the countries.[7][8]China and Pakistan hope the massive investment plan will transform Pakistan into a regional economic hub as well as further boost the growing ties between Pakistan and China.[9]The Pakistani media and government called the investments a "game and fate changer" for the region.[10][11]According toThe Guardian, "The Chinese are not just offering to build much-needed infrastructure but also make Pakistan a key partner in its grand economic and strategic ambitions."[12]The project will also open trade routes for Western China and provide China direct access to the resource-richMiddle Eastregion, bypassing longer logistical routes currently through theStrait of Malacca.[13]During thestate visit of President of ChinaXi Jinpingto Pakistan in April 2015, he wrote in an open editorial that "This will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother." During his visit,Islamabadwas dotted with slogans and signboards such as "Pakistan-China friendship is higher than the mountains, deeper than the oceans, sweeter than honey, and stronger than steel."[14]Contents[hide] 1History 2Strategic importance 3Infrastructure 4Projects 5Financing 6Security 7Controversy 7.1Strategic implications 8See also 9Notes 10ReferencesHistory[edit]External video

China Reaches Out to Pakistan With Massive Economic Plan.

The project was proposed by Chinese PremierLi Keqiangduring his visit to Pakistan in May 2013.[15][16]The Pak-China Economic Corridor Secretariat was inaugurated in Islamabad on 27 August 2013.[17]In February 2014, Pakistani President Mamnoon Hussain visited China to discuss the plans for an economic corridor in Pakistan.[18]Two months later, Pakistan Prime MinisterNawaz Sharifmet with Premier Li Kequiang in China to discuss further plans.[19]While the project took shape during Sharif's tenure, the vision for an economic route stretches as far back as theMusharrafera.[20]In November 2014, Chinese government announced that it will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan as part of CPEC. Documents quoted byReutersshow that China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects which will be completed by 2017 at most. The deal includes $622 million for Gwadar Port. According to Reuters, under the CPEC agreement, $15.5 billion worth of coal, wind, solar and hydro energy projects will add 10,400 megawatts of energy to the national grid of Pakistan.[21]On 20 April 2015, Pakistan and China signed an agreement to commence work on the $46 billion agreement, which is roughly 20% of Pakistan's annual GDP,[22]with approximately $28 billion in immediate projects and the rest allocated for projects in the pipeline.[23]The deal includes a $44 million fibre optic cable[24]and will add 10,400 Megawatts to Pakistan's energy grid through coal, nuclear and renewable energy projects.[25]Also included are major upgrades to Pakistan's transport infrastructure, including: Karakorum Highway(Havelianin theAbbottabad DistricttoThakot) Karachi-Lahore Motorway(MultantoSukur) The Gwadar Port East Bay Expressway Project Gwadar International AirportThe plan also includes projects to address climate change, joint research in cotton Biotech and marine research, cooperation between China'sGeneral Administration of Press and Publicationand Pakistan'sMinistry of Information and Broadcastingas well as an agreement betweenChina Central Television,PTVand the Pakistan Television Foundation on the rebroadcasting of CCTV news and documentary programs in Pakistan.Some cities have been made sister citiesChengduinSichuanprovince andLahore, andZhuhaiinGuangdongprovince andGwadar.[26]Strategic importance[edit]The move represents a shift toward greater economic cooperation between Pakistan and China, which have long had close security ties amid common disputes with neighboring India. The corridor would give China access to the Indian Ocean and lead to investments that would help ease power shortages that are hindering economic growth in Pakistan.

Bloomberg Businesson April 1, 2015,[27]

When the corridor is constructed, it will expand the number of trade routes between China, the Middle East and Africa. Energy security is a key concern for China, as it is the world's biggest oil importer,[22]and oil pipelines through Pakistan would cut out ocean travel through Southeast Asia.[28]TheAsian Development Bankterms the project as "CPEC will connect economic agents along a defined geography. It will provide connection between economic nodes or hubs, centered on urban landscapes, in which large amount of economic resources and actors are concentrated. They link the supply and demand sides of markets."[29]According to Chinese Foreign Ministry Spokesperson Hua Chunying, the corridor will "serve as a driver for connectivity between South Asia and East Asia." Mushahid Hussain, chairman of the Pakistan-China Institute, toldChina Dailythat the economic corridor "will play a crucial role in regional integration of the 'Greater South Asia', which includes China, Iran, Afghanistan, and stretches all the way to Myanmar."[18]China plans to build oil storage facilities and a refinery atGwadar Port, with oil transported to its Xinjiang Uighur Autonomous Region via road and pipeline. This will let it move energy and goods to inland China without going through the Strait of Malacca, which could be blocked by the U.S. or India should hostilities break out in the region. The project will also lead to development in western China, where tensions are simmering from activities by radical separatists.[30][31]Iran has also responded positively over the proposal to link theIranPakistan gas pipelinewith China, with the Iranian ambassador to China describing it as a "common interest" between the three countries.[32]CPEC is considered economically vital to Pakistan in helping it drive economic growth.[33]Moody's Investors Servicehas described the project as a "credit positive" forPakistan. In 2015, the agency acknowledged that much of the project's key benefits would not materialise until 2017, but stated that it believes at least some of the benefits from the economic corridor would likely begin accruing even before then.[34]A study by thePew Research Centerin 2014 found that 78% of Pakistanis have a positive view of China.[25][35]in 2014, the Chinese government committed to spending $45.6 billion over the next six years to build the ChinaPakistan Economic Corridor, which will include the construction of highways, railways, and natural gas and oil pipelines connecting China to the Middle East. Chinas stake in Gwadar will also allow it to expand its influence in the Indian Ocean, a vital route for oil transportation between the Atlantic and the Pacific. Another advantage to China is that it will be able to bypass the Strait of Malacca. As of now, 60 percent of China's imported oil comes from the Middle East, and 80 percent of that is transported to China through this strait, the dangerous, piracy-rife maritime route through the South China, East China, and Yellow Seas.Council on Foreign Relations[13]Infrastructure[edit]

Karakoram Highway

Gwadar PortThe first phase involves development at Gwadar Port and the construction of an international airport. It will be carried out by 2017, with Chinese companies expected to participate. TheKarakoram Highwayconnecting the two countries will also be widened, while the rail network between Karachi in southern Pakistan and Peshawar in the north will be upgraded. The two countries also plan a fiber-optic communications link between them.[citation needed]The project received a major boost when control of Gwadar Port was transferred to China's state-owned China Overseas Ports Holding in February 2013.[citation needed]Built by Chinese workers and opened in 2007, Gwadar is undergoing a major expansion to turn it into a full-fledged deep-water commercial port. Pakistan and China have signed agreements for constructing an international airport at Gwadar, upgrading a section of the 1,300-kilometre Karakorum Highway connecting to Islamabad and laying a fibre-optic cable from the Chinese border to the Pakistani city ofRawalpindi.[36][37]With the development of the corridorCentral Asia, traditionally an economically closed region owing to its geography and lack of infrastructure, will have greater access to the sea and to the global trade network.[38]The world's largest solar power project will be undertaken at theQuaid-e-Azam Solar Parkin Bahawalpur. The project will be worth 900 megawatts on an investment of