The China–Pakistan Economic Corridor (CPEC), often touted as a game-changer, has largely been associated with roads, infrastructure, and energy projects. However, its broader implications on Pakistan’s economic sovereignty and strategic autonomy remain underexplored. As CPEC enters its second phase, the corridor is not just transforming Pakistan’s physical landscape but also redrawing its geopolitical contours. This editorial delves into how CPEC is reshaping Pakistan’s economy, its regional alliances, and its long-term autonomy in decision-making. It assesses both the promise and peril embedded in this grand bilateral venture, questioning whether Pakistan can truly wield CPEC as a tool of empowerment, or if it risks becoming economically beholden to Beijing. Therefore, the debate surrounding CPEC now demands a more nuanced and forward-looking examination.
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Inaugurated in 2015 as the flagship project of China’s Belt and Road Initiative (BRI), CPEC is a multi-billion-dollar venture designed to connect China’s western region of Xinjiang with Pakistan’s Gwadar Port through a network of roads, railways, pipelines, and special economic zones (SEZs). Valued initially at around $46 billion and later expanded to over $62 billion, CPEC was envisioned to not only bridge Pakistan’s chronic energy shortfall but also modernize its infrastructure, stimulate industrial growth, and generate employment. In this sense, CPEC was portrayed as a strategic remedy for long-standing structural challenges in Pakistan’s economy. While the vision appeared comprehensive and ambitious, its implementation introduced a complex interplay of local and foreign interests. As such, the evolving dynamics between promise and execution have become central to evaluating its impact and sustainability.
Shifting Priorities: From Infrastructure to Industrialization
While Phase I focused heavily on energy and transport infrastructure, CPEC Phase II, launched in recent years, pivots toward industrial cooperation, agriculture modernization, and socio-economic development. This transition reflects an intent to shift from hard infrastructure to soft power and production capacity. However, as the projects deepen in scope and scale, questions surrounding debt sustainability, local economic empowerment, transparency, and national sovereignty have become more pronounced. These concerns are not merely technical; they strike at the core of Pakistan’s long-term policy autonomy. Consequently, the conversation around CPEC needs to evolve beyond asphalt and megawatts—toward examining its influence on economic agency, institutional capacity, and strategic posture in South Asia.
1. Economic Transformation and Dependency: A Double-Edged Sword
To begin with, CPEC has undeniably improved Pakistan’s energy infrastructure and transportation network. According to the Planning Commission of Pakistan, over 5,300 MW of electricity has been added to the national grid under CPEC projects, alleviating chronic power shortages. Major highways like the Sukkur-Multan Motorway have significantly reduced travel times and improved trade logistics. These visible gains have added to the perception of CPEC as a developmental breakthrough.
Nevertheless, these advancements come with financial liabilities that complicate the picture. Pakistan owes more than $10 billion to Chinese state-owned banks under CPEC, with repayment cycles now intensifying. Moreover, the opaque nature of loan agreements and the predominance of debt over grants raise concerns about a “debt trap”—a claim Beijing strongly denies. While CPEC is framed as a partnership, Pakistan’s limited bargaining power in contract negotiations reflects a structural imbalance, thereby suggesting a subtle erosion of economic sovereignty and long-term fiscal flexibility.
2. Strategic Realignment in South Asia
In a broader strategic context, CPEC has redefined Pakistan’s geopolitical alignment. Historically allied with the United States, Pakistan now leans heavily toward China. The corridor’s integration into Beijing’s broader BRI strategy places Pakistan in the heart of a new Eurasian connectivity vision that challenges U.S.-led global trade routes and influence. As a result, Pakistan's strategic calculus has fundamentally shifted.
However, this realignment has introduced new diplomatic complexities. India vehemently opposes CPEC, citing its passage through Gilgit-Baltistan, a disputed territory. Meanwhile, the U.S. increasingly views CPEC as part of China’s strategic encirclement. Consequently, Pakistan finds itself in a delicate balancing act—leveraging Chinese investment while avoiding diplomatic isolation from the West. This recalibration may offer short-term strategic leverage, but if not carefully managed, it risks long-term foreign policy constraints and reduced global maneuverability.
3. Local Economic Inclusion: Promise versus Reality
Equally important is the question of whether CPEC has fostered local economic inclusion. One of the touted benefits of CPEC is local job creation and skill development. Yet, on-ground reports suggest a low ratio of Pakistani labor and contractors, especially in the early phases dominated by Chinese firms and workers. This disparity has generated resentment in several localities, particularly where expectations were high but deliverables were limited.
Although Phase II promises greater localization through Special Economic Zones (SEZs) in Punjab, Sindh, Khyber Pakhtunkhwa, and Baluchistan, delays in land acquisition, regulatory bottlenecks, and governance challenges have stymied progress. According to a 2023 report by the Centre for Peace and Development Initiatives (CPDI), out of the nine proposed SEZs, only Rashakai in Khyber Pakhtunkhwa had seen substantial development, while others remained stalled due to bureaucratic hurdles and lack of inter-provincial coordination. Moreover, Baluchistan—home to Gwadar Port—has witnessed minimal local inclusion, exacerbating regional grievances. The lack of transparency in project planning and resource allocation has further deepened public distrust. Thus, unless redirected toward inclusive development, CPEC risks being viewed not as a national initiative, but as a centrally driven project with uneven outcomes.
4. Digital and Technological Sovereignty: The New Frontier
Meanwhile, an under-discussed yet critical dimension of CPEC is its emerging digital footprint. China is now assisting Pakistan in building fiber optic infrastructure, surveillance systems, and even smart city frameworks. While these advancements can modernize Pakistan’s digital economy, they also raise serious questions about data privacy, cyber sovereignty, and long-term surveillance implications. The issue transcends technology—it intersects with national autonomy in the digital age.
Indeed, the growing integration of Chinese technology firms, some of which are globally sanctioned, into Pakistan’s digital infrastructure could tether Islamabad’s technological ecosystem to Chinese standards and control. According to the Pakistan Telecommunication Authority’s 2022 report, Huawei and ZTE are leading vendors in Pakistan’s 4G and fiber optic projects, accounting for more than 60% of network equipment supply. With Huawei and ZTE deeply embedded in telecom projects and digital networks, Pakistan must weigh the benefits of connectivity against the risks of dependency and data monopolization. If left unchecked, this digital interdependence may erode the country’s ability to set independent technological and regulatory standards in the future.
5. Strategic Access and Maritime Influence through Gwadar
Furthermore, Gwadar Port is central to both CPEC and China’s ambitions for maritime access to the Arabian Sea. For Pakistan, Gwadar holds the promise of becoming a regional trade hub, attracting investment and reducing Karachi’s logistical burden. For China, Gwadar provides a crucial node for energy imports and naval access in case of conflict in the South China Sea or the Malacca Strait. The port’s symbolic and strategic value thus extends far beyond trade.
However, the commercial viability of Gwadar remains limited. Poor hinterland connectivity, water scarcity, and a lack of skilled labor hinder its development. According to a 2023 report by the Gwadar Development Authority, more than 60% of the local population still lacks access to clean drinking water, and road infrastructure connecting Gwadar to major economic centers remains underdeveloped. Additionally, concerns over Chinese control of port operations—with a 40-year lease granted to China Overseas Port Holding Company—fuel fears of external dominance. Without robust institutional reforms and a clear strategic vision, Gwadar may ultimately serve Beijing’s regional interests more than Pakistan’s national priorities, further complicating the question of who truly benefits from CPEC’s success.
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CPEC’s transformative potential cannot be denied, but it must be approached with strategic foresight rather than blind optimism. While it offers Pakistan an opportunity to modernize and reposition itself regionally, unchecked dependency on China risks reducing Pakistan’s economic and technological autonomy. Moreover, the corridor’s benefits have so far remained unevenly distributed across regions and classes. Without robust institutional checks, greater transparency, and inclusive development strategies, CPEC may exacerbate existing inequalities rather than resolve them. Therefore, careful recalibration and reform are essential if Pakistan is to maintain its sovereignty and extract long-term value from the partnership.
CPEC is more than just a corridor of roads and pipelines; it is a corridor of strategic choices and long-term consequences. As Pakistan deepens its economic integration with China, it must do so with clarity, caution, and national interest at the forefront. This means addressing asymmetries in partnership, bolstering local capacities, and demanding transparency from both foreign and domestic stakeholders. The challenge lies in leveraging CPEC not merely as a Chinese investment plan but as a sovereign development strategy that uplifts the Pakistani people, empowers institutions, and safeguards autonomy. Only then can the corridor fulfill its promise—not as a dependency but as a vehicle of Pakistan’s economic and strategic renaissance.
