Ten Years of The China-Pakistan Economic Corridor: What has Changed?

On November 25, the Center for Pakistan Studies of Fudan University and the Institute of Belt and Road and Global Governance of Fudan University jointly hosted a roundtable discussion on “The 10th Anniversary of the China-Pakistan Economic Corridor: Review and Prospect”. The meeting invited experts, scholars and government officials from China and Pakistan to discuss the achievements and experiences of CPEC in the past ten years, as well as the challenges and opportunities.
On the sidelines of the conference, Guancha interviewed former Pakistani Ambassador to China  (2013-2019) Masood Khalid and current Pakistani Consul General in Shanghai Hussain Haider, who both are witnesses to the CPEC project, on the achievements of the CPEC and Pakistan’s security issues that Chinese readers are concerned about.
Guancha: Mr. Ambassador, you personally participated and witnessed Pakistan’s accession to the Belt and Road Initiative and the launch of the China-Pakistan Economic Corridor (CPEC) project, can you share with our readers how Pakistan made this decision at that time? Why is this project so important, and how do we evaluate the results of this project 10 years later?
Masood Khalid: Thank you very much! The China-Pakistan Economic Corridor (CPEC) has been running for ten years now, since it started in 2013. But as I said in my speech earlier, the idea of China-Pakistan connectivity has been around since the 1950s, and it has been an idea that has been lingering in the minds of the leaders of both countries for a long time.
In 1951, Mao Zedong sent officials from the Ministry of Foreign Affairs to establish diplomatic relations with Pakistan because Chairman Mao had the foresight to see Pakistan as China’s southern window.
In 1966 the two countries began construction of the Highway that connects Kashgar in Xinjiang with Pakistan. This was the second step towards China-Pakistan connectivity.
The idea of connectivity between the two countries was always there. Now we know the dream has come true.
In May 2013, then Chinese Premier Li Keqiang visited Pakistan and put forward the idea of the China-Pakistan Economic Corridor (CPEC); then, in February 2014, during the Pakistani President’s visit to China, China and Pakistan agreed to accelerate the construction of the CPEC.In April 2015, President Xi Jinping visited Pakistan and put forward the construction of the corridor as the center of the corridor, focusing on the port of Gwadar, energy, infrastructure construction and industrial cooperation In April 2015, President Xi Jinping visited Pakistan and proposed to not only focusing on the corridor but also the Gwadar port, energy, infrastructure construction and industrial cooperation. Under this framework, China and Pakistan have signed 55 agreements covering different areas of cooperation, and China has pledged to provide investment to Pakistan. President Xi Jinping also listed the China-Pakistan Economic Corridor (CPEC) as a flagship project of the Belt and Road Initiative (BRI), reflecting the strategic significance of the CPEC.
Over the past decade, the Corridor has made tremendous progress in four areas: energy, transportation facilities, Gwadar, and industrial cooperation: China has invested more than $25 billion in CPEC projects, from which Pakistan has benefited greatly.
Pakistan is no longer facing energy shortages, which were a serious problem in Pakistan 10 years ago. The CPEC has created hundreds of thousands of jobs; built transportation infrastructure such as railroads and highways, including a 27-kilometer high-speed rail line in the city of Lahore. The Gwadar Port, built with Chinese investment, is estimated to be operational next year; and other projects continue in the Gwadar region, including schools, hospitals, industrial parks and water treatment plants, among others.
These are some of the achievements.
The next step is to vigorously develop cooperation in industrial areas. Pakistan is trying to set up industrial areas to attract Chinese private enterprises to invest. The Pakistani government has also issued a number of incentives for Chinese private companies and investors and has promised that their security will be protected.
Pakistan is located in the center of several Asian neighbors, and by doing business in Pakistan, Chinese companies can save on logistics costs by reducing the distance of transportation. This is precisely the benefit of China-Pakistan cooperation.
Now that CPEC has entered its second phase, the areas of China-Pakistan cooperation are expanding into agriculture, science, technology, education, health, and tourism. I think we will see more China-Pakistan cooperation in these areas in the next decade.
Guancha: As you said, the China-Pakistan Economic Corridor has created a lot of opportunities for the people of both countries, but we also have to face the problems that exist. We heard the experience of our columnist, a professor in Pakistan, who personally witnessed the death of his friend 2022 in a terrorist attack against Chinese people at the University of Karachi. We know that Pakistan is our old friend, but we are concerned about the safety of Chinese people in Pakistan, where attacks targeting Chinese people have happened more than once. Why do you think this kind of attacks targeting Chinese people happen so frequently and to what extent does this affect the CPEC cooperation? May I also ask Mr. Consul General if Pakistan has taken any measures to avoid such incidents?
Masood Khalid: The China-Pakistan Economic Corridor (CPEC) project has not been affected by these isolated incidents. We are very sorry to hear what happened to our Chinese friends, any loss to you is a loss to us. Though we have taken many measures to protect our Chinese friends in Pakistan, whether they are involved in the China-Pakistan Economic Corridor project or not, we are saddened that such things have happened. Some opposition forces, terrorist organizations and military forces backed from abroad, they don’t want to see us succeed and to see China-Pakistan relations continue to be strong. They want to create such terrorist incidents to scare off the Chinese.
In the wake of the terrorist attacks, the government has stepped up security measures for Chinese nationals in Pakistan. They are our guests, our friends, and they have contributed to the development of Pakistan. So it is important for us to protect their security.
Also, Chinese friends who come to Pakistan should pay extra attention to protect themselves. Sometimes they may not follow the tips of the local government and go out to do business without informing the Pakistani staff or their protectors. We request Chinese embassy staff and consuls in Pakistan to remind Chinese people working in Pakistan to inform them in advance when they go out for activities so that the Pakistani side can provide security measures.
They have to be careful because terrorist activities are backed by foreign powers, and by doing so they are trying to create conflict in the relations between our two countries, but our relations have stood the test.
Both the Chinese government and the Pakistani government know who is behind these terrorist attacks. We are coordinating with each other to investigate these terrorist attacks, and it’s important that we have more cooperation and coordination on the security front.
I can also share some of my personal observations. I live in the capital city of Islamabad, and if you come to Islamabad, you will see a lot of Chinese people on the streets or in the supermarkets. There are a lot of Chinese restaurants here that are owned by Chinese people and they are very popular. For example, if you want to eat Lanzhou Ramen, you can have it. I see a lot of Chinese people eating in restaurants, and Islamabad is not as dangerous as the media portrays it. Of course, there are problems. I think the Pakistani government has taken all possible measures to protect the Chinese.
Hussain Haider: Providing security for Chinese citizens as well as assets and Chinese investments has now become a top priority for the Pakistani government. We have formed an independent Pakistani army dedicated to the security of CPEC projects, in which Chinese citizens are involved and investments from China.
The government is also doing its best to create a safer environment for Chinese nationals living in Pakistan, not only because Chinese investment in Pakistan is very important to us, but also because our relationship with China dates back to 1951 when China and Pakistan established diplomatic relations, and the two countries have had a friendship for 72 years now.
Therefore, the Pakistani government fully recognizes that it is vital to provide a safe and secure environment for Chinese people coming to Pakistan, not only CPEC project personnel, but also Chinese friends who come to Pakistan for tourism or to visit friends and relatives.
Guancha: I once interviewed American political scientist Prof. Joseph Nye. I asked him how he would assess China’s Belt and Road Initiative. He said it was a mixed bag; it was good for China to provide infrastructure and other public goods to developing countries, but it was bad if it was used as a tool to contain its neighbors. Prof. Nair then talked about a conversation between his Indian friend and his Chinese friend: the Chinese friend asked why India did not join the Belt and Road Initiative. The Indian friend replied that the Belt and Road Initiative was designed to “contain India”, because India is bordered by the Gwadar port invested by China in Pakistan to the west, and the Colombo port invested by China in Sri Lanka to the east, and the two projects seem to have no economic benefits. to speak of. Professor Nye cited this example to show that he recognized his Indian friend’s argument.
In addition, we also know that the mainstream media in the West and the Indian media have been making a big fuss about the so-called “debt trap” that China’s “Belt and Road” has created for developing countries. As an important Pakistani politician involved in the construction of the “Belt and Road”, we believe that you have a lot to say about this, how would you respond to the above statement?
Masood Khalid: There is a lot of opposition to the Belt and Road Initiative and the China-Pakistan Economic Corridor (CPEC), and we know who is behind it. There is a need to counter the so-called “debt trap” through an effective media strategy. All countries borrow and China has borrowed from the World Bank. Now, China is also providing loans to other countries. There is nothing wrong in borrowing for development and as a developing country, Pakistan has borrowed from both China and multilateral institutions. We borrowed from the IMF for development to cover the fiscal deficit and to solve the balance of payments problem.
China has given us concessional loans, but the proportion of our loans to China is much lower than the proportion of our borrowings from multilateral institutions and commercial and foreign banks. Therefore, the conclusion about the “debt trap” is wrong. This is the first point.
Secondly, you mentioned “containment”. On the contrary, containment comes from the other side, and we know who is trying to contain China in the Asia-Pacific region, and this allegation or assertion that the China-Pakistan Economic Corridor is a “Chinese containment of India” is, in my view, self-serving, and there is no truth in it.
Thirdly, our Chinese friends should know that as a member of the Quadrilateral Security Dialogue (QUAD), the Indo-Middle East-European Economic Corridor (IMEC) and other security alliances, India has already concluded with the United States the framework underpinning all the agreements, which are very substantive. Thus, India is part of the US strategy to contain China and is a key US counterweight to China.
In this case, Pakistan will also suffer because of its relationship with China. But we don’t want to engage in bloc politics, we have historically had a deep relationship with China and we also have good relations with the United States. We want to maintain the trajectory of that relationship and we want to continue to promote and strengthen our time-tested friendship with China. We also want to advance our relationship with the United States. So it is not a relationship or a state of affairs where one country’s relationship is sacrificed in order to preserve another state of diplomatic relations, but we know where Pakistan’s interests lie and we will follow those principles.
Guancha: On a related note, India, Iran and Russia are accelerating the International North-South Transport Corridor (INSTC) project, which will connect India, Iran, Azerbaijan, Russia, Central Asia and Europe for the transportation of goods, which overlaps with China’s Belt and Road Initiative. At the same time, India and Iran have signed a long-term agreement to develop Chabahar into a full-fledged deep-sea port. But we know that Chabahar port is less than 100 kilometers away from Gwadar port and competes with it.
In addition, the U.S. has been strengthening its alliances in the Asia-Pacific region, saying at this year’s G20 meeting that it wants to lead the “India-Middle East-Europe Economic Corridor” (IMEC), and frequently stirring up trouble in Taiwan and the South China Sea.
The above factors will inevitably interfere with the construction and operation of the China-Pakistan Economic Corridor and Gwadar Port. From the Pakistani perspective, how do we face the competition and how do we create a peaceful environment for China-Pakistan cooperation?
Masood Khalid: First of all, Gwadar Port is a deep-water port, while Chabahar Port is not a deep-water port, at least not yet. Therefore, we are not in competition. Because of the proximity of the two ports, Pakistan and Iran have agreed that the two ports are sister ports and they will complement each other. That is the first point.
Secondly, on the stability of the region against the backdrop of tensions between the United States and China. We know that the United States is vigorously pursuing a containment strategy against China, so how can China maintain peace in the region? I think you can continue your current policy of maintaining calm and patience as a way to maintain peace and continue to help developing countries under the Belt and Road Initiative.
The Belt and Road Initiative already has more than 150 partner countries, which means that these 150 partner countries value the Belt and Road Initiative and China’s help, and that is the way forward. In the next 10 years, the Belt and Road Initiative should continue to be unimpeded, so that not only China can benefit from it, but China’s development can also benefit other developing countries.
I think this is in line with the Global Development Initiative and the Global Civilization Initiative that China is promoting. These are very good concepts, and China should continue to promote them.
Secondly, remain calm and don’t get dragged into war. In my opinion, China does not want conflict because it believes in peaceful development and wants to maintain peaceful relations with its neighbors. If there is a conflict or war in the neighborhood, it will affect China’s economic development, and it is not in anyone’s interest to disrupt the peace.
I believe that Chinese leaders are very pragmatic, they are wise leaders and they understand that there may be more challenges. President Xi Jinping has said very clearly in his speeches that he has to be prepared to deal with shocking waves and stormy seas. So I think the Chinese leadership knows the challenges.
China is now the world’s second largest economy, China’s rise is inevitable, the center of gravity of global development has shifted to Asia, and China is the locomotive, and in my view, this process cannot be reversed.
But China must continue to be the locomotive of development in Asia, and I think that is the answer. If other countries in the neighboring regions and other continents can develop together, and if China keeps its image as a positive and responsible great power, then I think the idea of peace will prevail.
Guancha: Back to the topic of China-Pakistan Economic Corridor. I would like to ask Mr. Consul General, what specific challenges do you think we face in the next decade? How can we address them? For example, from the Chinese point of view, our judgment is that the governmental relationship between our two countries is very closed, and we have 72 years of friendship; in comparison, the exchanges between the common people of the two countries may be lacking, and the older generation of Chinese may be familiar with the friendship, and the younger generation may have fewer exchanges. In the face of these challenges, does Pakistan have any plans to improve or overcome them?
Hussain Haider: Yes, I think the issue you mentioned is very important. It is true that we have very good government-to-government relations, but the human exchanges between the two peoples do not reflect the enthusiasm that should characterize the relations between the two countries. One reason is that the interaction between the two peoples was still on the low side in the past.
In the second phase of the China-Pakistan Economic Corridor, tourism is an important area of cooperation between China and Pakistan. We expect more Chinese people to visit Pakistan, where they can personally experience the country’s diverse culture and customs.
Although Pakistan was born in 1947, it was once part of British India and it was one of the major bases of industrial civilization. The Gandhara Buddhist civilization of Basistan is one of the oldest in the world.
We need to make more of our Chinese friends aware of Pakistan. Because in the media, generally the western media looks at Pakistan from a security perspective. This is the age of social media, you can access social media from anywhere in the world and that’s exactly what we need to do, we can show people in China and all over the world the friendliness of the Pakistani people and the splendid civilization of this land through social media.
Moreover, Pakistan needs to organize cultural exhibitions in China so that Chinese people can understand the power of Pakistani culture.
There are already more than 25,000 Pakistani students studying in China, and I think they can be cultural ambassadors for Pakistan; there are also more than 30,000 Chinese working in different kinds of jobs in Pakistan, and when they return to their home countries, they will also be cultural ambassadors for Pakistan.
I think these are all areas where we would like to strengthen humanistic exchanges between the two countries. Because in fact, in the final analysis, it is the people who are the beneficiaries of the government’s policies, of the China-Pakistan Economic Corridor and of the Belt and Road Initiative.