Regional connectivity is an
important element of the recently unveiled Vision 2025 of the Government of
Pakistan. The Pak-China Economic Corridor (PCEC) is mentioned as an integral
element in realizing the potential of regional connectivity and trade with the
South Asian Association for Regional Cooperation (Saarc), the Association of
South East Asian Nations (Asean), the Central Asia Regional Economic Cooperation
(CAREC), and the Economic Cooperation Organization (Eco). On his part, Chinese
President Xi Jinping also proposed forging “ChinaPakistan Community of Shared
Destiny” during his meeting with President of Pakistan Mamnoon Hussain on
February 19, 2014. According to Chinese analysts, the Pak-China Economic
Corridor (PCEC) serves as the backbone of President Xi’s proposal. President
Xi’s foreign policy concept of “Community of Shared Destiny” is predicated on
cooperation for mutual benefit with certain key characteristics; the most
important one being the pursuit of common interests through mutually beneficial
partnerships. Another important aspect is that it calls for strengthening of
trust among nations through mutual understanding.
A major milestone for establishing the “China-Pakistan Community of Shared
Destiny” was achieved in May 2013 when an agreement was signed to establish the
Pakistan China Economic Corridor (PCEC) to connect Pakistan’s Gwadar Port with
Kashgar in the western part of China close to Pakistan’s border. China is
developing a Special Economic Zone (SEZ) in Kashgar, which would mean rapid
development of the area requiring substantial external resources from or through
Pakistan — utilizing the developing port city of Gwadar. Pakistan’s Gwadar Port
provides this less-developed western part of China an easy access to the warm
waters of the Arabian Sea and considerably reduces the time and resources
required for transporting trade goods to and from western China and West Asia.
It is argued that the development of the PCEC would bring unprecedented economic
rewards for Pakistan as well as China.
The importance of the PCEC is amplified by the fact that it is also going to
link up with the greater Chinese plan of the Silk Road Economic Belt (SREB) that
would connect China with Europe through Central Asia. The “five connections”
proposed by the Chinese leadership for the Silk Road Economic Belt are: policy
exchange, road network, currency circulation, and people’s friendship.
Connecting with the SREB, the PCEC is of immense significance to China as well.
Therefore, we can say that with serious long-term focus on the project by both
Pakistani and Chinese leaderships, the PCEC has the potential to further cement
the close bonds between the two countries in the days to come.
Kashgar is destined to grow exponentially after the operationalization of the
SEZ in the city. If the development of Shenzhen, the city that pioneered the
concept of SEZs, could provide us with an insight into the growth patterns of
SEZs, we could expect Kashgar to grow at the rate of over 20 percent per annum,
because Shenzen grew at the astounding rate of 25.8 percent from 1979 to 2009,
and a 4,176 times increase in 30 years. Pakistan could, thus, enormously 6
benefit from it during its development as well as operational phase. The
development of communication infrastructure would also help the tourism industry
of the picturesque Northern Areas of Pakistan bordering China. There are many
avenues for Pakistani businesses for export business in China. For instance,
China is the largest consumer market for gemstones, which is an opportunity for
Pakistan. Pakistan has a potential yield of 800,000 carats of Ruby, 875,000
carats of Emerald, and 5 million carats of Peridot, which remains
under-utilized. According to Shah Faisal Afridi, President of Pak-China Joint
Chamber of Commerce and Industry (PCJCCI), China being the world’s largest
consumer market for gems and jewellery, could help in utilizing Pakistan’s full
potential through investment in the sector and promoting exports of gems to
China.
There are strong bilateral trade relations between the Pakistan and China.
Currently around $12 billion per year, trade between Pakistan and China is
estimated to reach $15 billion in the next couple of years. The volume of
bilateral trade between Pakistan from January to May 2014 was $6 billion,
exhibiting a 12.66 percent growth rate. China also has substantial investments
in Pakistan with more than 120 Chinese companies operating in the country. The
importance of Chinese investment in Pakistan is well acknowledged by the
leadership of Pakistan. For instance, during his July 2013 China visit, besides
the government-to-government interactions, Prime Minister Nawaz Sharif held
meetings with the Chinese business community to encourage them to invest in
Pakistan. The high-level state visits of the leaders of the two countries have
assumed great significance lately for their role in carrying the shared
perceptions of development forward and also for signifying the importance the
two countries attach to their relations with one another.
In May 2013, Chinese Prime Minister Li Keqiang visited Pakistan to sign the
landmark PCEC agreement. Prime Minister of Pakistan Mian Muhammad Nawaz Sharif
visited China in July 2013, his first official visit abroad since assumption of
the office. In February 2014, President of Pakistan Mamnoon Hussain, visited
China wherein Chines President Xi Jinping put forward the proposal of forging
“China-Pakistan Community of Shared Destiny”. President Hussain visited China
once again in May 2014 to attend the 4th summit of the “Conference on
Interaction and Confidence-Building Measures” in Asia. Prime Minister Sharif
visited China again in April 2014 to attend the Asia Forum in Boao in April
2014. President Xi Jinping was scheduled to visit Islamabad in September 2014
wich materialized in April 2015 due to political issues. During this epic visit,
Pakistani and Chinese officials signed a series of more than 50 accords to
inaugurate the China-Pakistan Economic Corridor, which would create a network of
roads, railways and pipelines linking China's restive west to the Arabian Sea
through Pakistan. The central route will link Gwadar, Khuzdar and other areas on
way to Dera Ghazi Khan, Dera Ismail Khan and Peshawar, while the eastern route
will connect Gwadar to Ratodero, Sukkur and Karachi and upward to cities in
Punjab and from there to Khyber Pakhtunkhwa and then Khunjerab Pass.
The PCEC is a multidimensional project encompassing Pak-China connectivity
through road and railway networks, laying down of fibre-optic cables, the
operationalization of the Gwadar Port, and several energy projects. Under the
PCEC, China has committed to helping Pakistan with: the construction of a fibre-optic
cable from the Chinese border to the capital of Pakistan; the upgrading and
realignment of the Karakoram Highway linking Kashgar with Abbottabad; the
construction of the new Lahore-Karachi Motorway, and an early completion of
pending work in nine power projects. Chinese cooperation for the construction of
the Diamer-Bhasha Dam and the completion of the Nandipur power project are also
part of the PCEC. Implementation of the projects under the PCEC has been divided
into three phases, where short-term projects are estimated to be completed by
2017; medium-term by 2025, and long-term by 2030.