High-Quality Development of China-Pakistan Economic Corridor

Ning Jizhe

Vice Chairman of National Development and Reform Commission

On May 21 this year, Chinese President Xi Jinping exchanged a congratulatory message with Pakistani President Arif Alvi to celebrate the 70th anniversary of the establishment of China-Pakistan diplomatic relations. The two heads of state reviewed how mutual trust and friendship between the two countries have withstood the test of the changing international landscape over the past 70 years and always remained rock-solid, hailed the remarkable achievement attained by the construction of the China-Pakistan Economic Corridor (CPEC), and expounded the significance of all-weather strategic partnership of cooperation between the two nations. President Xi added, “I would like to work with you to deepen strategic communication and practical cooperation between the two countries, and promote the high-quality development of CPEC”. This has given direction and momentum to the CPEC construction in the new era, and boosted our confidence in building CPEC into a model for high-quality development of the Belt and Road Initiative and fostering a closer China-Pakistan community with a shared future.

1. Mutual trust and friendship between the two sides are rock-solid.

In his message, President Xi pointed out that the two countries, as all-weather strategic cooperative partners, have extended each other steadfast support over issues concerning our core interests and major concerns; our mutual trust and friendship have always been rock solid despite changes in the international situation over the past seven decades. Over the past 70 years, the two countries have always trusted and supported each other with sincere sympathy, stood together through thick and thin, with bilateral bond and friendship growing ever deeper and stronger as time goes by.

China and Pakistan have forged a unique and ironclad amity throughout history. Over 2,000 years ago, the Silk Road became a bridge of friendship linking our two ancient civilizations. In ancient times, Zhang Qian, China’s emissary in the Han Dynasty, Faxian, the master monk in the Eastern Jin Dynasty, and Xuan Zang, the great monk in the Tang Dynasty all once visited Indus River. On May 21, 1951, China established diplomatic ties with Pakistan. Pakistan is one of the first countries to recognize the People’s Republic of China and the first Islamic country to establish diplomatic relations with the PRC. On April 21, 2015, during his first visit to Pakistan, President Xi Jinping reviewed the bilateral history in his speech, “since the establishment of our diplomatic ties, thanks to the commitment of successive Chinese and Pakistani leaders and the concerted efforts of our two peoples, our two countries have forged an all-weather strategic cooperative partnership and pursued all-round cooperation. Despite changes in the domestic and international environment, we have always extended sympathy to and genuinely supported each other on issues crucial to our respective core interests. Such friendship is truly unique.” Over the past 70 years, China and Pakistan have trusted, respected and supported each other through thick and thin, and together established an all-weather strategic cooperative partnership. The ironclad bond is vividly exemplified by actions of the governments and the peoples. President Arif Alvi expressed in his message that, “Under the strong leadership of President Xi, Pakistan-China relations are stronger, more solid and more vibrant than ever before.”

At present, CPEC, with significant progress, have elevated our ironclad bilateral relations. Launched in 2013, CPEC is now a flagship project of the Belt and Road Initiative. Six years ago, President Xi Jinping made it clear that “the China-Pakistan Economic Corridor is a focal point of our joint efforts to achieve common development, and we should use this economic corridor to drive our practical cooperation.” In 2015, the “1+4” cooperation structure was identified with the economic corridor at the center and the Gwadar Port, Energy, Infrastructure and Industrial Cooperation being the four key areas. In the past eight years, CPEC has seen fruitful results. China has been Pakistan’s largest trading partner for six consecutive years and its largest source of investment for seven consecutive years. CPEC has helped bring $25.4 billion direct investment to Pakistan in accumulative terms and created almost 75,000 jobs in Pakistan. In particular, in face of the sudden outbreak of COVID-19 pandemic, China and Pakistan have been working together to overcome difficulties and further upgraded the ironclad friendship.

Moving forward, both sides will jointly build an even closer China-Pakistan community with a shared future for the benefits to both countries and peoples. Friendship between China and Pakistan is based on sincere trust and mutual support through both good and hard times, an example of amicable relations between countries. The Pakistani people call China-Pakistan friendship as higher than the mountain, deeper than the sea and sweeter than honey. And we Chinese fondly refer to the Pakistani people as our good friends, good neighbors, good partners, and good brothers. To deepen China-Pakistan relations is a historic choice made by both countries to pull together in times of difficulty and to seek common development, when changes and the pandemic unseen in a century intertwined and brought the world into a phase of complex transitions. Following the trend of the times, President Xi farsightedly put forward the ambitious goal to build a closer China-Pakistan community with a shared future in the new era. Under this vision, we will forge ahead in building a China-Pakistan community with a shared future.

2. The development of CPEC has achieved remarkable results.

President Xi Jinping stated in his message that in recent years, with joint efforts of both sides, the construction of CPEC has achieved remarkable results, bringing important benefits to the two peoples and adding strong impetus to regional prosperity. CPEC is a pioneering project of the Belt and Road Initiative. Acting on the principle of extensive consultation, joint contribution and shared benefits, the two sides formed a “1+4” cooperation structure within short time. Though many foreign investors halted their projects and pulled capital out of Pakistan due to severe shock from, CPEC has been proceeding uninterruptedly, with no Pakistani jobs cut and no Chinese staff withdrawn. Such actions win the hearts of our Iron Brothers and make CPEC a demonstrative project for high-quality development of the Belt and Road Initiative.

The joint development of the Gwadar Port has made significant progress. Workers from both countries work dedicatedly and devotedly at the Gwadar Port, at Gwadar International Airport, at China-Pakistan Friendship Hospital, at Professional Training Center and at East Bay Expressway. In 2017, Fraternity Emergency Care Centre was completed; in 2018, 300,000 gallons of desalinated water was provided to citizens in Gwadar every day; in 2019, Pak-China Faqeer Colony School was put into operation; in 2020, 80,000 square meters of green spaces were built. Today, the Gwadar Port is fully operative. The Gwadar Free Trade Zone, free of duty for 23 years according to the law, has been more attractive for investors and attracted a number of high-quality enterprises settling there. Its Afghanistan transit trade business has been authorized and carried out in an orderly manner. All those efforts are making the Gwadar Port steadily become a logistics hub and an industrial base.

Energy projects have seen notable results. Power plants in Sahiwal and Port Qasim maintained normal production despite difficulties caused by COVID-19 pandemic, accounting for one third of Pakistan’s electricity generation, which has mitigated the country’s power deficit and contributed to Pakistan’s economic and social development. The 4000 MW HVDC Matiari-Lahore Transmission Line has been put into operation. The Karot Hydropower Project and Suki Kinari Hydropower Project are still under construction and making steady progress. Kohala, Patan and other hydropower projects have signed power purchase agreements.

Infrastructure is playing a crucial role. Karakoram Highway Phase II (Havelian-Thakot section), the “China-Pakistan Friendship Road”, was completed and opened to traffic by the end of July 2020, shortening the five-and-a-half-hour drive to less than two hours. Lahore Orange Line Metro, Pakistan’s first urban rail transit, has been completed and open for commercial operation. The Peshawar-Karachi Motorway (Sukkur-Multan section), the largest transportation infrastructure project along the corridor, has also been completed and open to traffic. “Like the Karakorum Highway, the path of traditional friendship between China and Pakistan is bound to be broadened.” The completion of these three major transportation projects has won wide acclaim from all sectors of Pakistan.

The industrial cooperation witnesses a new breakthrough. The Rashakai Special Economic Zone (SEZ), a landmark in the corridor’s industrial cooperation, has held a launching ceremony, with steady works in infrastructure development and business attraction. The Chinese-funded enterprises in the Allama Iqbal (M-3) SEZ have been producing protective clothing and other supplies to give support to Pakistan in their fight against the COVID-19 pandemic. The Project of China-Pakistan Cross-Border Optical Cables has been completed and delivered for operation. Under the framework of the corridor’s agricultural cooperation, China has provided a large number of supplies to help Pakistan control the infestation of locusts.

The excellent performance of CPEC during the COVID-19 pandemic has strongly boosted Pakistan’s confidence in economic recovery and vividly interpreted the meaning of China-Pakistan all-weather strategic partnership of cooperation. CPEC has become a model of successful coordination of epidemic prevention and production among the BRI projects, and presented to the world the strong vitality of the BRI.

3. Promote the High-Quality Development of the China-Pakistan Economic Corridor

The 10th Joint Cooperation Committee Meeting on CPEC was successfully held on September 23, 2021. The construction of CPEC has entered a new stage of development. To earnestly implement the important instructions of the two heads of state on the occasion of the 70th anniversary of our diplomatic, we will focus on the “1+4” cooperation structure to promote the high-quality operation of CPEC, build it into a model project for the high-quality BRI development, and create a closer China-Pakistan community with a shared future in the new era.

We are committed to building a healthy corridor. In the ongoing fight against COVID-19, health is the foundation of the corridor. The two governments and their people have been helping each other to go through this difficult time in the face of the pandemic. In joint production of COVID-19 vaccines, the Pakistan National Institute of Health has successfully produced the vaccines with the help of China’s CanSino Biologics Inc. We will continue to put people and their lives first, provide more assistance in vaccines and other epidemic prevention supplies, and expand cooperation in the fields of the prevention and control of infectious diseases, public health and traditional medicine. In this way, we can protect people’s lives and health, and build a closer partnership for cooperation in the heath sector.

We are committed to building an industrial corridor. Industrial cooperation is the top priority of the “1+4” cooperation structure, and is essential for enhancing the productivity of Pakistan. Industrialization is crucial for such a country with more than 200 million. Pakistan, now at the early stage of industrialization, boasts a huge market with golden opportunities. We will encourage and support more Chinese enterprises, especially manufacturing enterprises, to make investments in Pakistan, boost employment, earn foreign exchange through exports, generate tax revenue and promote technological progress, in an effort to speed up building CPEC into an industrial corridor.

We are committed to building a trade corridor. Trade invigorates the corridor and sustains its prosperity. After the protocol of the second phase of the China-Pakistan FTA came into force on 1 January 2020, trade liberalization has been significantly promoted. According to the Ministry of Commerce of the PRC, China imported $2.12 billion worth of goods from Pakistan in 2020, up by 17.5% year-on-year. We will follow through unimpeded trade and advance the liberalization and facilitation of trade and investment, by cutting the cost of trade and investment, and enlarging imports from Pakistan so as to advance a balanced international trade and build a closer trade partnership.

We are committed to building a digital corridor. Digitization is the trend of the times. We will seize the historical opportunities in a new round of scientific and technological revolution and industrial transformation, boost digital economy, and step up exchanges and cooperation on digital technologies. In addition, we will enhance new infrastructure, mobile payment, e-commerce networks, smart grids, smart factories and digital TV in order to build a digital corridor and make it a model of the Digital Silk Road.

We are committed to building a green corridor. We will jointly advocate the concept of “green mountains are golden mountains” by strengthening cooperation on green infrastructure, green energy, green finance, green agriculture, green forests, green investment, and international low-carbon recycling parks. In so doing, we will make green a defining feature of CPEC, enhance a closer partnership for green development, and build a low-carbon corridor between China and Pakistan.