In an era where regional partnerships are becoming more vital than ever, the second phase of the China-Pakistan Economic Corridor (CPEC) stands out as a turning point. While the first phase focused heavily on roads, ports, and energy, Phase II marks a move toward industrialization, agricultural development, and social progress. With a renewed focus on cooperation through mining, vocational training, and possibly including Afghanistan in the future, CPEC is entering a more people-centered chapter. This editorial explores how this shift could shape Pakistan’s economy, strengthen Sino-Pakistani ties, and redefine regional connectivity.
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To understand the direction of CPEC Phase II, it is essential to recall the purpose of the project from the start. CPEC began in 2015 as a $62 billion initiative under China’s Belt and Road Initiative, focusing on connecting western China with Gwadar Port in Baluchistan. In its first stage, the priority was building highways, ports, and power plants. While these developments improved basic infrastructure and reduced energy shortages, the benefits did not always reach the wider population.
Now, the focus has shifted to more sustainable and inclusive goals. Phase II is designed to develop Pakistan’s industries, boost agricultural productivity, improve employment through training and job creation, and build stronger ties between people and institutions. Unlike the earlier phase that depended mostly on construction, this new stage promotes local ownership and long-term economic stability. These changing priorities also reflect China’s growing interest in soft power and Pakistan’s need for deeper structural reforms.
Industrial Zones Offer New Opportunities for Manufacturing Growth
A major focus of CPEC Phase II is the development of Special Economic Zones (SEZs), which are meant to bring industrial activity closer to local communities. These zones, such as Rashakai in Khyber Pakhtunkhwa and Allama Iqbal Industrial City in Faisalabad, offer incentives like tax holidays and dedicated infrastructure to attract both Chinese and Pakistani investors. The aim is to strengthen Pakistan’s manufacturing base, reduce its trade deficit, and create new job opportunities for its growing youth population. If properly managed, these SEZs can help Pakistan shift from an import-reliant economy to one that produces and exports value-added goods, such as textiles, electronics, and consumer products. According to the Board of Investment (BOI), nine SEZs have been prioritized under CPEC, with several already under development. This creates a foundation for industrial clusters that can spur technology transfer, support small and medium enterprises, and integrate local businesses into global supply chains.
Agricultural Cooperation Is Key to Food Security and Rural Uplift
Agriculture is another area receiving renewed attention in Phase II. Since almost 40% of Pakistan’s workforce depends on farming, improving this sector is crucial. China is offering technical support in seed development, irrigation systems, and modern farming tools. Through pilot projects in Punjab and Sindh, new crop varieties and advanced farming techniques have already shown promising results. These partnerships are not only improving yields but also helping small farmers increase their incomes. In addition, plans are underway to establish Agri-processing units and cold storage systems, which can reduce food waste and strengthen Pakistan’s position in global agricultural trade. Data from Pakistan’s Ministry of National Food Security shows that Chinese agricultural technology has improved wheat yields by up to 30% in pilot areas, demonstrating the potential for broader impact across rural economies. These advancements are crucial as Pakistan faces climate variability, soil degradation, and water shortages, issues that can only be addressed with modern practices and regional cooperation.
Mining Projects Hold Potential for Long-Term Strategic Growth
Mining is one of the newer areas being explored under CPEC Phase II. Pakistan is rich in minerals such as copper, gold, and rare earth elements, but poor management and outdated practices have kept this sector underdeveloped. Through recent agreements, Chinese companies have shown interest in helping explore and develop these resources, especially in regions like Baluchistan and Gilgit-Baltistan. If implemented with care, these projects could bring significant revenue and employment to remote areas. However, to avoid the mistakes of the past, Pakistan must ensure that environmental standards are enforced and local communities benefit fairly from resource extraction. For instance, the Reko Diq gold and copper reserves in Baluchistan are estimated to hold over $500 billion worth of minerals, making them a potentially transformative asset if developed responsibly. Partnerships under CPEC could modernize mining practices, introduce transparency, and ensure equitable benefit-sharing mechanisms that include indigenous populations.
Job Creation and Skill Development Are Central to Social Progress
One of the most welcome changes in Phase II is its focus on people. Unlike the first phase, which created mainly short-term construction jobs, this stage aims to build long-term human capital. Job fairs, technical training centers, and Chinese-funded scholarships are helping to equip young Pakistanis with practical skills needed in the modern economy. For example, training programs in Gwadar and Faisalabad are producing skilled workers in trades like electrical work, welding, and IT. These efforts not only reduce unemployment but also prepare the local population to participate in SEZs and other CPEC-linked industries. According to the National Vocational and Technical Training Commission (NAVTTC), more than 60,000 Pakistanis have already benefitted from CPEC-related skill development programs, with numbers expected to increase as SEZs expand. The inclusion of women in vocational training initiatives in urban centers is also a notable shift toward gender-inclusive development.
Afghanistan’s Inclusion Could Redefine Regional Connectivity
Another new feature of Phase II is the proposal to include Afghanistan in CPEC projects. While still in early talks, this move could expand trade, improve regional cooperation, and provide landlocked Afghanistan access to the sea through Gwadar. For Pakistan, including Afghanistan would bring economic benefits and also help stabilize its western border. For China, it would strengthen its broader Belt and Road Initiative by linking Central Asia with South Asia. However, for this idea to work, there must be peace and basic infrastructure in Afghanistan, along with support from the wider international community. According to the Ministry of Planning, Development and Special Initiatives, Afghanistan’s participation in the CPEC Joint Working Group on International Cooperation marks a strategic expansion of the corridor’s vision. Transit trade through Gwadar Port has already begun in small volumes, offering a glimpse of future potential if security and diplomatic hurdles are addressed.
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CPEC Phase II represents more than an extension of an economic plan, it reflects a shift toward people-centered, inclusive development that addresses Pakistan’s long-standing structural weaknesses. The SEZs are not merely investment hubs but catalysts for industrial transformation. Agricultural cooperation responds directly to food insecurity and rural stagnation, while mining projects could unlock untapped strategic wealth. The most impactful change, however, lies in human capital, training youth, generating employment, and integrating local labor into a modern economy. The prospect of regional inclusion through Afghanistan could reshape South Asia’s geopolitical landscape. However, challenges like bureaucratic inefficiency, corruption, and lack of transparency continue to threaten timely implementation. If these are not resolved, the transformative promise of CPEC Phase II may falter despite robust frameworks and international support.
In conclusion, CPEC Phase II brings with it the promise of lasting change, not just for Pakistan’s infrastructure, but for its industries, farms, workers, and even its regional relationships. With the right leadership, strong partnerships, and a people-first approach, this new chapter can help Pakistan become a more self-reliant and connected nation. However, success depends on careful planning, honest governance, and continued cooperation between Pakistan, China, and possibly Afghanistan. Only then can CPEC become not just a corridor for trade, but a bridge to prosperity for the entire region.
