The relationship between China and Pakistan has started not recently but in the 1950s. That relationship grew bigger and emerged a new diplomatic move which is known as China-Pakistan Economic Corridor or popularly “CPEC”.


China-Pakistan Economic Corridor is a diplomatic move by China to strengthen the relationship between China and Pakistan under the “One belt, one road” initiative by China. Through this corridor, China will invest a huge amount in various sectors including roads, railways, pipelines, healthcare etc. In the development of infrastructure in Pakistan and strengthen bilateral trade.


It was proposed by Chinese Premier Li Keqiang during his visit to Pakistan in May 2013. As a part of the further discussion, former Pakistani president Mamnoon Hussain visited China in February 2014 where the idea for an economic corridor emerged. The plan was finalised by former Pakistan PM Nawaz Sherif and Chinese Premier Li Keqiang at their meeting in China in April 2014. Finally, on 20th April 2015, Pakistan and China signed the agreement which is popularly known as the “CPEC Agreement”.


China is the world’s largest economy of manufacturing and exporting of goods. With the enormous investment, China grew its economy very fast within 25-30 years. Now China’s infrastructure is almost complete and most of the companies will shut down due to lack of projects and unemployment.Due to these reasons, China’s GDP may fall and affect their growth rate. So, creating a global influence in trade is the only way to rectify their problems.But the South China sea disputes creates a barrier to China to progress their trade in the South-Western and Middle-east region.China has already started building an island to boost its trade relations with other countries. But the USis the top trade rival to China deployed USNavy near the South China sea to block the trade route of China. This urged China to create an alternative trade route with the help of Pakistan. This will link the western part of the world to connect with China through Gwadar port in Pakistan.



  • The initial budget for this project was $46 billion. But now, it has reached worth $62 Billion in which $29 billion is given as loan and rest $33 billion as investment
  • It covers a 3,000-kilometre network of roads, railways and pipelines which will help China to transport oil and gas from Gwadar port situated in South Pakistan to Kashgar city in Xinjiang Uygur autonomous region in China
  • It is aimed at maintaining the Economic Growth Rate of China by creating a trade route with other countries
  • A total of 51 agreements and Memorandum of Understanding worth $62 billion are created to promote CPEC


  • They will get an alternate route for trade despite South China sea dispute
  • This project will help to develop Xinjiang province in China where Kashgar city is located
  • It will help China to maintain their Economic Growth Rate thereby maintaining their GDP
  • China can increase their global influence through trade relations with other countries
  • Developing roads in Pakistan will help China to transport commodities arriving at Gwadar port easily to China


  • China has to maintain security throughout the unsupportive Baluchistan area where Pakistan government appears to be incapable of providing adequate security measures


  • Pakistan has a very weak economy. Boosting CPEC project will help Pakistan to develop their infrastructure and boost its growth in the economy
  • It is estimated that Pakistan has the most number of youngest population aged under 30. With the help of CPEC, employment opportunities are created
  • The annual power generation in Pakistan is about 16,400 MW due to which Pakistan has a power crisis. China agreed to tackle this energy crisis by signing 21 agreements on energy mainly coal, gas and solar energy which will generate around 16,400 MW doubling Pakistan’s present power generation rate
  • Gwadar port will be upgraded to international standard along with constructing an airport in this area
  • More than 20 power plants will be constructed while some of them are already operational
  • It helps to construct roads from Karachi to Peshawar along with redeveloping the highest highway in the world- “The Karakoram highway” which connects Pakistan with China which are known as “Belt roads”
  • “Orange line”- an automated rapid transit system consists of metro rails which are automated and driverless will be realized
  • It will slowly help Pakistan to create Special Economic Zones (SEZ)enabling technology transfer. But now the concentration is on port building and energy sectors


  • When global banks are charging interest rates at 1%, 2% or 3%, China is providing a loan to Pakistan at a very high-interest rate of 7% which will sum up the amount to be repaid nearer to $100 billion
  • Since China is mostly giving loans on infrastructures, Pakistan has to find alternatives to repay the loans
  • About 18 power plants in Pakistan will be constructed and maintained by China and Pakistan has no involvement in it thereby extracting no income from it
  • This project is being opposed by Baluchistan because of so many political and economic issues



  • According to a report, PM of India Narendra Modi in a bilateral meeting with China expressed his views about CPEC to Chinese President that both the countries need to be ‘sensitive’ towards their respective strategic interests keeping in mind that this project passes through Pak-occupied Kashmir
  • In a response to tackle the construction of Gwadar port in Pakistan by China, India is developing Chabahar port in Iran which is Iran’s only oceanic port


CPEC is definitely a good opportunity for Pakistan to develop its infrastructure. It is a boon as well as a bane. If Pakistan makes use of SEZs effectively, it will help them to repay the loan and build their own stable economy.If China implements this project without hurting the interests of other countries, it would be beneficial for all.