Pakistan-China Economic Corridor and Their Trade History Retrospective

Pakistan-China Economic Corridor is a framework of regional connectivity, a project linked with China’s ‘One Belt Project’ (OBOR). CPEC will not only benefit China and Pakistan but will also improve the trade between Iran, Afghanistan, India, Central Asian Republic, and the region. The enhancement of geographical linkages will have improved road, rail and air transportation system with frequent and free exchanges of growth. CPEC looks forward to modernize and revive the ancient route known as the Silk Road/Route. The Silk Road, also called the Silk Route, ancient trade route, linking China with the West, that carried goods and ideas between the two great civilizations of Rome and China. Silk went westward, and wools, gold, and silver went east.

Originating at Xi’an (Sian), the 4,000-mile (6,400-km) road, actually a caravan tract, followed the Great Wall of China to the northwest, bypassed the Takla-Makan Desert, climbed the Pamirs (mountains), crossed Afghanistan, and went on to the Levant; from there the merchandise was shipped across the Mediterranean Sea. Few persons traveled the entire route, and goods were handled in a staggered progression by middlemen.

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With the gradual loss of Roman territory in Asia and the rise of Arabian power in the Levant, the Silk Road became increasingly unsafe and untraveled. In the 13th and 14th centuries the route was revived under the Mongols, and at that time the Venetian Marco Polo used it to travel to Cathay (China). CPEC looks forward to establish trade routes in way connecting the trade worlds altogether as never before.

Literature Review

The literature on this particular context tends to discuss the vision, pros and cons, hurdles and challenges faced by Pakistan mostly in the execution of the CPEC. The project looks forward to improve the lives of people of Pakistan and China by building an economic corridor promoting bilateral connectivity, construction, explore potential bilateral investment, economic and trade, logistics and people to people contact for regional connectivity. It includes:

• Integrated transport and IT systems including road, rail, port, air and data communication channels;
• Energy cooperation;
• Spatial layout, functional zones, industries and industrial parks;
• Agricultural development;
• Socio-economic development (poverty alleviation, medical treatment, education, water supply, vocational training);
• Tourism cooperation and people-to-people communication;
• Cooperation in livelihood areas;
• Financial cooperation;
• Human resource development.

Being a chunk of a greater idea One Belt One Road (OBOR) CPEC reflects large number of ideas and projects.

Discussion and Analysis

I would like to start the discussion with details about the routes and areas of Pakistan.

1. CPEC coverage. The CPEC covers China's Xinjiang Uygur Autonomous Region and the whole territory of Pakistan. In order to reflect the level, scope and layout of the construction and development of the Corridor, its coverage is divided into the core zone and the radiation zone.
2. Key nodes. The node cities that the corridor passes through include Kashgar, Atushi, Tumshuq, Shule, Shufu, Akto, Tashkurgan Tajik, Gilgit, Peshawar, Dera Ismail Khan, Islamabad, Lahore, Multan, Quetta, Sukkur, Hyderabad, Karachi and Gwadar.
3. Spatial layout. The CPEC's core zone and the radiation zone, presents the spatial layout of ‘one belt, three axes and several passages’. By ‘one belt’ I mean the belt area composed of the core zone of the CPEC, including Kashgar, Tumshuq city, and Atushi city and Akto county in Kizilsu Kirghiz autonomous prefecture of Xinjiang, China, as well as Islamabad, parts of Punjab, Sindh, Khyber-Pakhtunkhwa, Balochistan, AJK and GilgitBaltistan. The ‘three axes’ refer to three horizontal axes connecting Lahore and Peshawar, Sukkur and Quetta, and Karachi and Gwadar. The ‘several passages’ refer to several railways and highway trunk lines from Islamabad to Karachi and Gwadar.
4. Key functional zones. The CPEC is divided into the following five functional zones from north to south: Xinjiang foreign economic zone, northern border trade logistics and business corridor and ecological reserve, eastern and central plain economic zone, western logistics corridor business zone, and southern coastal logistics business zone. Most of the node cities, transportation corridors and industrial clusters are concentrated in them.

China-Pakistan cooperation on economic and social development has made remarkable progress. In the past five years, China-Pakistan trade has continued to grow rapidly, with the annual growth rate of 18.8% on average based on the physical Corridor, China and Pakistan are expected to bring their economic cooperation to an unprecedented height.

China and Pakistan are blessed with different natural endowments, and at different stages of economic development, industrialization and urbanization. China has advantages in infrastructure construction, high-quality production capacity in equipment manufacturing, iron and steel and cement industries as well as financing for investment. While Pakistan owns rich human and natural resources, huge potential for economic growth and broad market prospects besides a geo-strategic location. The orderly and timely ow of economic factors in both countries along the CPEC will significantly improve the resource allocation efficiency and bring into full play the comparative advantage of each country.

Pakistan has the potential to grow into a ‘tiger of Asia’. Pakistan blessed with abundant natural resources and a vast domestic market. Extensive consensus on the Vision 2025 has been reached, which seeks to harness location advantage of Pakistan at intersection of South Asia, China and Central Asia for greater geo-economic cooperation and development by stronger regional connectivity.

Opportunities

The CPEC is closely associated with the implementation of the Belt and Road Initiative. As a pilot project of the Belt and Road Initiative, the experience accumulated from the CPEC will be promoted to other countries along the Belt and Road. The fusion of national development strategies will facilitate policy coordination between China and Pakistan; their geographical proximity is good for infrastructure connectivity; their closely coordinated economic and trade strategies will help realize unimpeded trade; the two countries are highly complementary to each other in investment and financing, making financial integration much easier; their all-weather strategic friendship is deeply rooted among people, thus helpful for people-to-people bond.

Challenges

1. Geopolitical and security risks. The geopolitical environment is inherently unstable in South Asia. World powers' adjustment of their policy towards this region might add to the uncertainty. The mix of international, regional, national and extremist factors might cause disruptive activities, threatening the security of the CPEC building.
2. The restraints of natural and geographical factors. Southern Xinjiang of China suffers from a weak industrial base and limited economic scale. Because of the special natural and geographical conditions in China-Pakistan border area, the construction, operation and management of major infrastructure projects is costly. The Indus River valley in Pakistan is comparatively economically advanced, but with high population density and limited resource carrying capacity, while the western area is poorly developed and troubled with harsh natural conditions.
3. Restraints to economic growth prospects. Pakistan needs to address major bottlenecks to economic and social development to sustain economic growth momentum. The energy, infrastructure, administration and governance deficiencies, besides unbalanced regional economic and social development, and external sector vulnerabilities need to be monitored to avoid any possible challenges to CPEC

Conclusion

From analyzing the above facts, I can conclude that with the project OBOR ‘One Belt One Road’ China aims to rejuvenate its’ historical routes (the Silk Road/Route) with a thrust of modern technology and advancements taking its trade to a whole new level. Now it’s the Government of Pakistan that should make the most of this opportunity through its hard work, commitment to competence and focused efforts to assure that China-Pakistan Economic Corridor has significance for the development of the region in the potential areas of regional connectivity, diverse investment opportunities, industrial cooperation, financial cooperation, agricultural cooperation, socio-economic development, tourism including coastal tourism educational linkage, human resource development, increase in livelihood opportunities, enhance security and stability of the region.

References

1. http://cpec.gov.pk/brain/public/uploads/psdp-projects/CPEC_and_Related_Projects.pdf
2. http://cpec.gov.pk/brain/public/uploads/psdp-projects/CPEC_Projects_2017-18.pdf
3. http://cpec.gov.pk/brain/public/uploads/psdp-projects/CPEC-2018-19.pdf