China Pakistan Economic Corridor: Local company support imperative for project success

When a phenomenon or debate is able to divide a population one can be certain of the importance and weight of that debate. While most seem in unanimous lauding of the China Pakistan Economic Corridor (CPEC) in Pakistan, many remain skeptical as they question the efficacy the project will hold for the Pakistan’s “masses”. While there is no doubt that CPEC will be a great boom to the country’s economy, many keen economists are taking China’s “generosity” with a pinch of salt and whether the country’s local population will feel the heat of socio-economic divide even more.

However, cynics and skeptics accounted for the majority of the balance lies with the proponents of the China Pakistan Economic Corridor. For good reason as well because the mammoth project will inject an investment of $46 billion and exponentially upgrade and expand Pakistani infrastructure. The corridor is considered to be an extension of China’s ambitious proposed 21st century Silk Road initiative and is considered central to China-Pakistan relations, and its central importance is reflected by China’s inclusion of the project as part of its 13th five year development plan.

To be built over the next several years, the 3,218 kilometer route will connect Kashgar in China’s western Xinjiang region to the port of Gwadar. Currently, nearly 80 per cent of China’s oil is transported by ship from the Strait of Malacca to Shanghai, a distance of more than 16,000 km, with the journey taking between two to three months. But once Gwadar begins operating, the distance would be reduced to less than 5,000 km.

In addition to opening expansive trade and commerce opportunities for Pakistan, the corridor will also slash oil and fuel prices for China, and thus China’s vested interest is obvious but also stands as mutually beneficial for Pakistan. Touted as new dawn and destiny for Pakistan, CPEC holds immense potential for the country as it bonds deeper with one of the world’s largest economy and superpower. Though there are some perils of building the infrastructure as it may also threaten a rise in access for extremist and terrorist groups who would be against this development. However, in the long run, the CPEC will only strengthen security and ability to fight terrorism especially as economy booms and more investment is been pumped back in to Pakistan’s reserves.

As part of the roughly $11 billion infrastructure package, an 1,100 kilometer long motorway will be constructed between the cities of Karachi and Lahore, which will connect to the already completed M2 Motorway which runs between Lahore and Islamabad. The Karakoram Highway between Rawalpindi and the Chinese border will also be completely overhauled and widened. The Karachi-Peshawar main railway line will also be completely overhauled to allow for train travel at up to 160 kilometers per hour, with expected completion by December 2019. Pakistan’s railway network will also eventually be further developed in order to connect it to the Chinese railway network in Kashgar. A network of pipelines to transport liquefied natural gas and oil will also be laid as part of the project, including a $2.5 billion pipeline between Gwadar and Nawabshah to transport gas from Iran.

Over $33 billion dollars’ worth of energy infrastructure will be constructed by private consortia in order to help alleviate Pakistan’s chronic energy shortages. This kind of support for the energy sector in

Pakistan will have profound positive influences for the country’s economy and general public satisfaction as the energy crisis remains one that is a huge obstacle and struggle for the average Pakistani. Naysayers regarding CPEC who are skeptical about the project’s ability to improve the lives of the everyman seems challenged when provision of cheaper and more energy is taken in to consideration. The quality of life boost will be revolutionary and unparalleled.

The debate around CPEC in the public may be very dividing, however, what matters most is if Pakistani companies and businesses are willing to support the project and build their capacity through it. Luckily, CPEC has unflinching support from companies as they see the huge investment as a game changing boon for the country and its economy. One of the biggest financial conglomerates in the country, JS Group are keeping an eager and keen eye on the timely completion of CPEC and strategizing how to best utilize this golden opportunity with the mega project. While viewing CPEC as a huge opportunity for the group, JS Group is also mindfully cognizant of the need for local organizations and companies to not only influence the discourse regarding China-Pak trade and commerce relations, but also affect the action taken. This is an excellent opportunity for cross-country and transnational strengthening, and JS Group has its finger on the pulse of development, change and prosperity that CPEC will bring.


By Muhammad Usman

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