CPEC - China Pakistan economic corridor - challenges

• CPEC
  
  
  
• Pakistan and China have good trading relations with each other. To increase the volume of their trade, China decided to make a large investment in Pakistan which is named as China-Pakistan Economic Corridor (CPEC). The CPEC is the collection of infrastructural developments, including power generations and research and development projects. China and Pakistan, both the countries are going to equally benefit from the project thus they both are interested in it, and putting all its efforts to complete the project. The locations selected for the project are Gwadar port in Baluchistan, Gilgit-Baltistan, Khyber, Pakhtunkhwa, Punjab and Sindh in Pakistan and Xinjiang in china. The total length of CPEC is about 3000kms.
• China has launched one of the largest investment projects for Pakistan. It is going to fund the infrastructure and power project in the country which will help Pakistan to overcome the power shortage crisis and also fulfil the infrastructure needs. Thus, project and trade will significantly impact the GDP and also increase the Foreigni Drect Investment of Pakistan. The CPEC project has potential to deepen the relation between China and Pakistan. It will not only benefit Pakistan and China, but will also have positive impact on Iran, Afghanistan, India, Central Asian Republic and other neighbouring regions.
• China-Pakistan economic corridor is the step towards regionalization in this globalized world. CPEC is the new hope for better region with peace, development and growth.

• Significance of CPEC:

• China Pakistan Economic Corridor has great importance for the growth and development of the region.
• Areas of cooperation and development includes regional connectivity like Transport Infrastructure, Energy Hub, Logistic Hub, Trade and Commerce, Peace and Development, Explore potential bilateral investment, Harmonization and Integration of civilizations.
• This will increase livelihood and employment opportunities and help in Industrial, Financial and Agricultural cooperation. It will also enhance educational linkage, security and stability of the region.
  
  
  
• The GDP of Pakistan has increased enough to put the economy on the right track. On the other side, the country has staved off a foreign exchange crisis.
• Energy shortage have been a major havoc in Pakistan, so energy sector is the primary focus of the corridor.
• The project connects the south-western China with Pakistan emerging Gwadar port, which will improve the roads and railway connectivity providing energy starved Pakistan with needed economic infrastructure.
• It is estimated to add 17,045 MW of energy to Pakistan’s national grid.
• For China, CPEC is the fate changer in strategic and economic senses.
• China’s industrial growth mostly depends on crude oil imports via sea routes from regions like eastern Africa, western Africa and the Middle East, that passes through the Malacca Strait.

• To alleviate the Malacca dilemma and ensure its energy security, China has diversified its energy sources and supply routes.
• It is also diversifying its access routes to expansive energy sources to ensure smooth supply and flow of crude oils in the event of crisis.
• The Gwadar port, oil pipelines, rail and land routes to Central Asia and the Middle East are alternatives to sea lane passing through the Malacca strait.
• Gwadar is reinforcing China’s geostrategic influence in Pacific and Indian Ocean, it reduces thousands of miles saving both transportation cost and time. Gwadar enables China to protect its supplies at the Strait of Hormuz, whereas Djibouti offers unparalleled access to the Gulf of Aden.
• The Gwadar port which is under the control of China can turn the port into permanent Chinese Naval facility in the Indian Ocean.

• Challenges to CPEC:

• China-Pakistan Economic Corridor faces multiple challenges, such as security and political challenges in Pakistan.
  
  
  
• Regional security is the biggest problem for the CPEC as it passes through some of the areas which do not have proper security environment, especially the Afghanistan conundrum.
• The security in Afghanistan is getting worst and devastating day by day after the pull-out of NATO forces, this could affect the Xingjian province which is an important region for the functioning of CPEC.
• Stability in Afghanistan is of major importance now as it can destabilize the regional security, particularly China and Western parts of China.
• The political disputes among various political leaders is yet another challenge before the CPEC.
• The dissatisfaction is due to dividends, funds for project of CPEC and route selection.

• The political difficulties over CPEC among political parties are existing in the history of Pakistan where the allocation of resources has always been utilized for political gains.

• For the proper functioning CPEC, Pakistan needs highly proficient labour to execute the project. The existing labour skills are not enough to pursue the CPEC.

• Conclusion: 

• CPEC could encourage socio-economic development in Pakistan. It can facilitate the development for regional economic and trade connectivity and integration between South, Central and East Asia. The regional economic integration through CPEC could play a great role in resolving political disturbance through cooperation. The CPEC aims to put Pakistan on high growth through infrastructure. The CPEC project will help to build a stable economy in Pakistan and create an opportunity to revive its industries. The poverty ratio will decline across the country. This project will certainly provide the most secure, shortest and cheapest route to China to import oils and energy.