Introduction: The All-Weather Friendship Gets an Economic Engine
For decades, Pakistan and China have touted their relationship as an “all-weather” friendship – a bond resilient through geopolitical storms. In recent years, that diplomatic cliché has taken concrete form in the China–Pakistan Economic Corridor (CPEC), a sprawling set of infrastructure and investment projects straddling the breadth of Pakistan. CPEC is the flagship of China’s global Belt and Road Initiative (BRI) and by far the most ambitious bilateral venture in Pakistan’s modern history. From highways carving through mountains to brand-new power plants lighting up cities, its scale is unprecedented. Pakistani leaders hail CPEC as a “game-changer” for the nation’s development, an economic engine that can drive the country out of chronic infrastructure deficits and energy shortages. Indeed, as of 2023, cumulative CPEC investments have exceeded $60 billion, financing projects that have added thousands of megawatts to Pakistan’s electric grid and built modern highways where none existed before. By any measure, CPEC is poised to redefine Pakistan’s economic landscape and tie its future more closely to China’s rise.
Yet this hopeful narrative is only part of the story. A more critical look reveals a complex reality beneath the grand slogans. While CPEC promises new roads and ports reminiscent of a modern “Silk Road,” it also raises serious questions about sovereignty, sustainability, and strategic dependence. Whose interests does CPEC ultimately serve? Optimists see a win–win: Pakistan gets vital infrastructure and investment, and China gains a secure trade route and a stronger regional partner. Skeptics, however, worry that Pakistan may be trading short-term gains for long-term obligations – a new dependency on Beijing that could compromise economic autonomy and burden the country with unsustainable debt. They point to mounting loans, opaque contract terms, and the growing presence of Chinese enterprises on Pakistani soil as signs that this grand partnership might come with strings attached. Furthermore, CPEC has implications beyond economics: it is stirring domestic political debates, affecting Pakistan’s internal power dynamics, and exacerbating regional strategic rivalries, especially with neighboring India.
This article explores both sides of this debate, arguing that CPEC is neither a miraculous cure-all nor a malevolent trap – but rather a double-edged sword. It indeed offers Pakistan an unprecedented opportunity to modernize, yet it also carries risks that could shape Pakistan’s trajectory for decades. The following sections examine CPEC’s evolution and impact in detail: from its historical roots in the Sino-Pakistani alliance, to the lofty promises and tangible progress of recent years, and then to the emerging challenges – financial, political, and geopolitical – that cloud its future. Is CPEC a new Silk Road to prosperity or a path to dependency? The answer lies in understanding the balance sheet of its benefits and costs for Pakistan, and in recognizing the policy choices that could tilt the outcome one way or the other. In the 21st century, CPEC has become a defining factor for Pakistan’s destiny – and how the nation navigates this partnership with China will fundamentally shape its economic sovereignty and regional role.
Historical Context: From Karakoram Highway to Economic Corridor
Pakistan’s partnership with China has deep historical roots, long predating CPEC’s inception. As early as the 1960s, the two countries forged a close alliance driven by mutual strategic interests. Isolated by its rivalry with India, Pakistan found in Beijing a powerful friend willing to provide military hardware, diplomatic support, and economic assistance. For China, Pakistan was a valuable partner on India’s flank and a gateway to the Indian Ocean. This convergence led to landmark early projects like the construction of the Karakoram Highway – an engineering marvel of the 1970s that cut through the Himalayan mountains to connect China’s western Xinjiang region with northern Pakistan. Often dubbed the “Friendship Highway,” the Karakoram Highway symbolized the tangibility of Sino-Pak ties: Chinese and Pakistani workers toiled side by side to build a road literally cementing their bond. It was, in many ways, the forerunner of CPEC – providing the first overland route linking the two nations and laying the groundwork for future economic connectivity.
Throughout the late 20th century, however, Sino-Pakistan cooperation remained largely in the strategic and military realm. Defense collaborationCollaboration
Full Description:The cooperation of local governments, police forces, and citizens in German-occupied countries with the Nazi regime. The Holocaust was a continental crime, reliant on French police, Dutch civil servants, and Ukrainian militias to identify and deport victims. Collaboration challenges the narrative that the Holocaust was solely a German crime. across Europe, local administrations assisted the Nazis for various reasons: ideological agreement (antisemitism), political opportunism, or bureaucratic obedience. In many cases, local police rounded up Jews before German forces even arrived.
Critical Perspective:This term reveals the fragility of social solidarity. When their Jewish neighbors were targeted, many European societies chose to protect their own national sovereignty or administrative autonomy by sacrificing the minority. It complicates the post-war myths of “national resistance” that many European countries adopted to hide their complicity.
Read more flourished – from Chinese assistance in Pakistan’s nuclear and missile programs to the co-production of fighter jets – but economic engagement was modest. Trade volumes were small, and apart from a few development projects (like sugar mills, highways, and the Gwadar Port’s initial construction in the early 2000s), China’s economic footprint in Pakistan was limited. Pakistan’s economy largely depended on Western aid and multilateral lenders, while China focused on its own development at home. This began to change in the 2000s as China’s global ambitions and capabilities grew. The two countries inked a Free Trade Agreement in 2006, and Chinese firms slowly increased their investments in Pakistan’s telecommunications, mining, and energy sectors. Still, nothing prepared observers for the quantum leap that CPEC would represent.
The formal idea of an “economic corridor” between China and Pakistan took shape in the early 2010s. In 2013, China’s President Xi Jinping announced the Belt and Road Initiative, envisioning vast networks of infrastructure to revive trade linkages across Asia, the Middle East, Africa, and Europe. Pakistan, with its strategic location, was identified as a linchpin for this vision. Pakistani leaders were eager as well – facing crippling electricity blackouts and stagnant growth, Islamabad saw an opportunity to tap China’s surplus capital and expertise to fix its own infrastructure woes. Talks accelerated, and by April 2015 President Xi visited Pakistan to sign agreements officially launching the China–Pakistan Economic Corridor. CPEC thus became the flagship of BRI – a formal economic expression of the long-standing alliance. In essence, the “all-weather” friendship was evolving: from a primarily military-diplomatic partnership, it now expanded into a sweeping economic venture. The strategic logic remained – counterbalancing regional rivals and binding the two countries closer – but now it would be buttressed by roads, rails, and power stations.
It is important to grasp this historical backdrop because it explains the enthusiasm and trust underpinning CPEC, as well as the lack of rigorous scrutiny that might have accompanied a deal with a less proven partner. Pakistan’s establishment has long viewed China as an unwavering ally that, unlike some Western patrons, never attached political conditions or deserted Pakistan in times of need. This goodwill meant that when CPEC was proposed, it was embraced at the highest levels in Pakistan almost unconditionally. The Pakistani military, a powerful stakeholder, publicly endorsed CPEC from the start as a strategic necessity. Given the decades of camaraderie, there was a sense that Pakistan could only benefit from China’s rise, and that joint economic progress would strengthen both countries. However, as we transition to the next sections, this very history of close friendship also meant that many in Pakistan approached CPEC with rose-tinted glasses, perhaps underestimating the complexities such a vast undertaking would entail. The Karakoram Highway had shown what cooperation could achieve, but an economic corridor orders of magnitude larger would bring new challenges alongside opportunities.
The Vision: CPEC’s “Game-Changer” Narrative
From the moment of its inception, CPEC was sold to the Pakistani public as nothing less than an economic panacea. Government officials and state media dubbed it a “game-changer” and a “fate-changer”, heralding a future where Pakistan’s longstanding development problems would finally be resolved. What exactly does this grand vision entail? At its core, CPEC is a collection of mega-projects spanning energy, transportation infrastructure, industrial development, and connectivity initiatives. These projects, spread over an intended 15-year timeline (2015–2030), aim to jump-start Pakistan’s economy by addressing critical bottlenecks:
Energy Projects: At the top of the list was Pakistan’s energy crisis. Frequent power outages (load-shedding) and insufficient generation capacity had hamstrung industry and daily life for years. CPEC’s early “fast-track” investments focused on power generation: coal-fired plants, hydroelectric dams, wind farms, and solar parks were rapidly built across the country. In total, roughly 20 new energy projects have been completed or are under construction, adding over 8,000 megawatts to the national grid. By 2018, Pakistan announced that the era of power shortages was largely over – an astonishing turnaround attributable largely to CPEC. This new electricity is intended not only to light up homes but also to fuel industrial growth in the coming years.
Transport and Connectivity: The “corridor” in CPEC manifests in a network of modern transportation routes. Projects include highways and motorways that link Pakistan’s ports in the south to its northern region and onwards to China. One flagship is the multilane motorway stretching from the port city of Karachi up through central Pakistan. The historic Karakoram Highway is being upgraded and expanded for faster travel into China’s Xinjiang province. A major railway line (the ML-1 project) is slated for modernization to speed up north-south rail transport. And at the southern hub, Gwadar Port on the Arabian Sea is undergoing transformation into a deep-water commercial port with new berths, an expanded airport, and ancillary facilities. The vision is that goods could travel from western China to Gwadar’s docks by road or rail in a matter of days, from where they can ship onwards to the Middle East, Africa, or Europe – effectively providing China a shortcut to the Indian Ocean and providing Pakistan a surge in transit trade.
Industrial Zones and Economic Zones: Along these new highways and around major cities, Pakistan is establishing Special Economic Zones (SEZs) under CPEC. The plan envisions around nine SEZs where Chinese and local companies would set up factories, assembly plants, and warehouses, benefiting from tax breaks and shared infrastructure. The rationale is to jump-start Pakistan’s industrialization by relocating some of China’s light manufacturing (such as textiles, electronics, automotive parts) to Pakistan, where labor is cheaper. This could create hundreds of thousands of jobs for Pakistanis, boost exports, and transfer technological know-how. It’s an echo of how the original Silk Road was about not just moving goods, but also spreading industry and crafts along its route. Gwadar:
The Crown Jewel: Special attention has always been given to Gwadar, a once-sleepy fishing town in Balochistan province that Islamabad and Beijing tout as the “next Dubai.” Gwadar’s deep-water port is strategically located near the mouth of the Persian Gulf (just outside the Strait of Hormuz). Under CPEC, Gwadar is to be developed into a modern port city with a new business district, free trade zone, and power and desalination plants to support the local population. The port is envisioned as the pivot of the corridor – a place where oil from the Middle East could be offloaded and sent to China via pipeline, or where goods from inland China could be exported by sea. If realized, Gwadar could reduce China’s reliance on the longer sea route through Southeast Asia and the vulnerable choke-point of the Malacca Strait. For Pakistan, Gwadar is touted as a gateway for prosperity, attracting global commerce and uplifting one of the country’s poorest regions.
The promised outcomes of all these endeavors are sweeping. Proponents claim CPEC will modernize Pakistan’s aging infrastructure by decades in the span of a few years. Highways and railways will knit together remote regions and cut transportation costs. Abundant electricity will revive factories and spur new businesses. The construction boom is already said to have created tens of thousands of jobs for Pakistani engineers, laborers, and support services, with more on the way as industries materialize around the new economic zones. Pakistani officials also point to the indirect effects: improved infrastructure could make Pakistan a more attractive destination for other foreign investors beyond China. With better roads and stable power, local entrepreneurs might start enterprises that were not previously feasible.
There is also a strategic narrative underpinning the vision. Pakistani strategists argue that by aligning itself with China’s BRI through CPEC, Pakistan secures a powerful patron for the long run. Economically, China’s growth could pull Pakistan up with it, integrating Pakistan into global supply chains emanating from China. Diplomatically, the partnership might shield Pakistan from international pressures (for instance, at forums like the IMF or FATF) because China’s backing adds credibility and an alternative source of support. In short, CPEC is portrayed not just as a set of construction projects, but as Pakistan’s ticket into a more prosperous and stable future, firmly connected to the world’s second-largest economy.
It is easy to see why this narrative gained popular appeal in Pakistan. A country burdened by slow growth, high unemployment, and dilapidated infrastructure understandably rallies around a vision of renewal. The phrase “game-changer” encapsulated genuine public hope that CPEC could catalyze a turnaround akin to an economic miracle. For a generation of Pakistanis, this was the first time they saw massive new infrastructure in their hometowns – new ports, power plants, and highways where promises had long been made but seldom fulfilled. That psychological boost, the feeling that “something big is finally happening,” became a part of CPEC’s allure. However, lofty expectations can be a double-edged sword. As the next sections will show, translating these promises into sustained benefits has proven complicated. The “game” did change – but not always in the ways anticipated.
The Reality: Debt, Transparency, and Sovereignty Concerns
As CPEC projects moved from paper to the real world, concerns began to surface about what Pakistan was signing up for. Chief among these are issues of financial sustainability and transparency. The initial enthusiasm often glossed over the fine print of CPEC deals, which only later started coming into focus. Unlike traditional foreign aid or grants, most CPEC funding comes in the form of loans and investments that Pakistan must repay or provide returns on. Chinese state-owned banks have extended billions in credit for infrastructure, while Chinese companies (often backed by those loans) build and operate the projects. This model means Pakistan is effectively accumulating liabilities, either as sovereign debt or in the form of guaranteed payments to investors. The scale of obligation is enormous: by one estimate, Pakistan’s external debt swelled from roughly 20% of GDP in 2013 to over 40% by 2021, with a significant portion linked to Chinese financing. This trend set off alarm bells about a possible “debt trap” – the risk that Pakistan could become unable to service its debts and face a financial crisis or be forced into concessions.
To be sure, the debt-trap narrative is hotly debated. Chinese and Pakistani officials vehemently reject it, arguing that CPEC loans are manageable and often on concessional terms (averaging around 2–3% interest over 15–20 years). They also point out that Pakistan’s debt problems predate CPEC, rooted in decades of fiscal mismanagement and reliance on other lenders. There is truth in that: Pakistan has had many IMF bailouts long before Chinese money arrived. Nonetheless, independent analysts have noted that even if CPEC wasn’t the sole cause of Pakistan’s debt woes, it has exacerbated them in specific ways. For example, several CPEC power projects came with agreements that oblige Pakistan’s government to pay Chinese independent power producers in dollars at predetermined high rates. As of mid-2020s, Pakistan reportedly owes over $7–8 billion to Chinese firms for power plant construction and another $2 billion in unpaid energy bills (part of a wider energy-sector “circular debt” crisis). These payments put pressure on Pakistan’s foreign currency reserves, contributing to balance-of-payments shortfalls. In fact, some observers have noted a bitter irony: Pakistan nearly doubled its electricity generation capacity under CPEC, but now struggles to pay for this electricity, as demand hasn’t grown fast enough and the contracts require paying for power whether used or not. The result is that Pakistan’s government shoulders hefty “capacity payments” every month – effectively debt service by another name.
The opacity of CPEC agreements has compounded such worries. Many of the deals – from loan terms to profit rates for Chinese companies – were negotiated behind closed doors. Neither the Pakistani parliament nor the public was given full details. This lack of transparency fuels suspicion that the contracts might unduly favor Chinese companies or include hidden costs. For instance, when a new government took power in Islamabad in 2018, it expressed surprise that some power project contracts guaranteed Chinese investors extraordinarily high returns (reportedly up to 20-30% in US dollar terms, risk-free). Rumors of inflated costs circulated: were some road projects more expensive than they should be? Did middlemen and officials take commissions? The secrecy makes it hard to evaluate CPEC fairly, and it has led to political finger-pointing. What is clear is that the Chinese and Pakistani governments have tightly controlled the CPEC narrative, often dismissing critics rather than engaging them. Journalists who investigate CPEC deals or activists who question the terms sometimes face pushback. The intent is to keep the spotlight on promised benefits, but this approach has arguably backfired by breeding more skepticism among those who feel key information is being withheld.
All these financial questions lead to a broader, more strategic concern: Pakistan’s economic sovereignty. If a country becomes overly indebted to a single creditor, its freedom to make independent decisions can wane. Western critics often cite the example of Sri Lanka’s Hambantota Port – another BRI project – which ended up under a 99-year Chinese lease after Sri Lanka struggled to repay loans. Could Pakistan face a scenario where it might have to cede control of assets like Gwadar Port or key highways if it can’t meet CPEC-related obligations? Pakistani officials insist “absolutely not,” noting that the structure of many CPEC projects is investment-based or build-operate-transfer, not straightforward debt. Nevertheless, the dependency risk is not only about formal control of assets. It is also about subtle leverage. Already, Pakistan leans heavily on China for financial support in tough times – for example, Beijing has deposited billions in Pakistan’s central bank as stopgap support to prevent currency crises. Such reliance can translate into diplomatic influence: Pakistan may feel compelled to align with China’s positions internationally even more closely, or give Chinese firms preferential access to markets and resources. Critics worry that in the long run Pakistan could become a kind of economic client state, where major policies are influenced (directly or indirectly) by what Chinese interests demand.
Finally, concerns over sovereignty extend into the realm of national security. The presence of thousands of Chinese workers and strategic projects on Pakistani soil has required Islamabad to raise whole new security forces dedicated to protecting CPEC assets. The Pakistani army created a Special Security Division, thousands strong, solely to guard CPEC routes and Chinese personnel. Some analysts question whether this prioritization comes at the cost of other national needs and whether Pakistan’s security policy is being swayed by Chinese priorities. Additionally, if Chinese naval ships eventually use Gwadar as a logistics port (a prospect India and the U.S. are wary of), Pakistan could find itself pulled deeper into great-power rivalry on China’s side. In summary, the “reality” of CPEC includes considerable grey areas and potential pitfalls: financially, it is adding burdens to an already strained economy; institutionally, it suffers from opacity that undermines accountability; and strategically, it could curtail Pakistan’s room for maneuver. These concerns do not negate CPEC’s potential benefits, but they do illustrate why the project is far more complicated than the initial rosy PR campaign suggested.
Internal Challenges: Provincial Grievances and Environmental Costs
Beyond the balance sheets and geopolitics, CPEC has triggered significant internal challenges within Pakistan. The grand plans, as implemented, have affected different regions and groups in uneven ways – sparking political grievances, social discontent, and environmental anxieties. These internal dynamics are crucial, because they determine how sustainable and inclusive CPEC’s benefits really are for Pakistan’s populace.
1. Provincial Inequities and Resentment: Pakistan is a federal country of four provinces (plus territories), and development projects are often viewed through a lens of regional parity. CPEC, unfortunately, has become entangled in Pakistan’s inter-provincial suspicions. From the early days, leaders in smaller provinces like Balochistan and Khyber Pakhtunkhwa (KP) complained that the corridor’s route and investments were overly concentrated in Punjab – the most populous province and political heartland. When the initial highway master plan showed an “eastern alignment” (passing through major Punjab and Sindh cities) being built first, critics derisively dubbed the initiative the “China-Punjab Economic Corridor.” They argued that Punjab’s dominance in federal decision-making meant it was cornering the immediate gains (new motorways, power plants, industrial parks), while peripheral areas would wait years for their turn. Balochistan’s politicians protested that the “western route” through their underdeveloped region was sidelined, thus denying Baloch people the potential benefits of new roads and infrastructure. Although the government later funded some western route projects to quell the criticism, the perception of unequal distribution persists. Statistics indicate that well over half of CPEC’s completed projects (by value) have indeed been in Punjab and Sindh, where existing infrastructure made implementation easier and returns on investment more secure. Meanwhile, poorer provinces feel they got a smaller slice of the CPEC pie – perhaps a new highway here or a coal plant there, but not the diversified projects and industries that Punjab enjoys. This sense of marginalization feeds into longstanding grievances those provinces have toward Islamabad, exacerbating internal discord.
2. Local Communities and Environmental Impact: Large-scale construction invariably affects local communities, and CPEC is no exception. Throughout Pakistan, there have been pockets of protest and frustration among people directly touched by CPEC projects. For instance, in the fishing town of Gwadar – the showcase port – residents have staged repeated demonstrations complaining that promised improvements to local living conditions haven’t materialized. Much of Gwadar still lacks reliable drinking water, electricity, and health facilities, even as shiny port edifices rise. Fisherfolk have protested that port expansions and a new expressway along the coast have restricted their access to the sea, threatening livelihoods. There is anger over reports of large trawlers (some allegedly Chinese) overfishing in Gwadar’s waters, depleting stocks that local fishermen depend on. In 2021, Gwadar saw a month-long popular sit-in movementSit-In Movement
Full Description:A tactic of nonviolent direct action where protesters occupy a space and refuse to leave until their demands are met. Sparked by four students in Greensboro, NC, in 1960, it became the defining tactic of the student-led wing of the movement. The Sit-In Movement targeted segregated lunch counters and public spaces. Well-dressed students would sit quietly while being refused service, often enduring verbal abuse and physical attacks from white patrons without retaliating. This tactic spread rapidly to hundreds of cities, leading to the desegregation of many private businesses.
Critical Perspective:The Sit-Ins represented a generational shift. They moved agency from the courts (lawyers) and the pulpit (ministers) to young students. Economically, they were highly effective because they disrupted business as usual; a lunch counter filled with non-paying protesters meant lost profit. It forced business owners to choose between segregation and solvency.
Read more where thousands demanded basic services and an end to outsider exploitation – a rare mass protest in a region known for tight security control. The environmental footprint of some CPEC projects is another flashpoint. Consider the coal power plants built under CPEC: while they alleviated electricity shortages, they also bucked Pakistan’s commitments to cleaner energy. Plants like the 1,320 MW Sahiwal coal plant were built in fertile agricultural areas and have been cited for contributing to air pollution. Local farmers and health advocates worry about air and water quality, noting higher levels of particulate pollution since the plants began operation. In Tharparkar (Sindh province), the open-pit coal mining for a CPEC power project has uprooted villages and altered the arid landscape, sparking debate about environmental justice for the impoverished indigenous communities there. Across several project sites, land acquisition for highways or transmission lines has at times been contentious – some communities say they were inadequately compensated or relocated without proper rehabilitation.
Another aspect often raised is the influx of Chinese workers and contractors. By design, many CPEC projects rely on Chinese expertise; thousands of Chinese engineers and laborers work on construction sites and in power plants. While they bring skills and speed, their presence can sideline local labor. It is estimated that upwards of 30,000–40,000 Chinese personnel have been employed in CPEC ventures over the years. Some Pakistani workers complain that they are passed over for jobs or that working conditions under Chinese firms are harsh. In a few cases, labor disputes have flared – such as Pakistani construction workers striking for better pay. The cultural and language gap can also breed minor resentments on the ground, even if overall people-to-people relations remain friendly. The Pakistani government emphasizes that tens of thousands of local jobs have been created by CPEC, which is true, but the perception of inequity in employment opportunities still generates local heartburn.
3. Security and Insurgency Threats: Perhaps the most severe internal challenge is ensuring the security of CPEC infrastructure and personnel in areas roiled by conflict. Balochistan, home to Gwadar and a significant stretch of the corridor, has faced a nationalist insurgency for years. Militant groups like the Balochistan Liberation Army (BLA) see CPEC as a fresh avenue of what they consider exploitation – they argue that outsiders (first the Pakistani state, now the Chinese) extract Balochistan’s resources and profits without benefiting the local people. These militants have targeted CPEC repeatedly: attacking construction sites, derailing trains, and most horrifically, conducting terrorist strikes on Chinese targets. There have been incidents of gunmen storming a luxury hotel in Gwadar frequented by Chinese officials, suicide bombings on buses carrying Chinese engineers, and even an attack on the Chinese consulate in Karachi. Scores of Chinese nationals and many more Pakistanis have been killed or injured in such attacks. Each incident rattles the confidence of those working on CPEC and at times has temporarily halted projects as security is re-evaluated. Similarly, in northwestern Pakistan (Khyber Pakhtunkhwa province), terrorist groups like the Tehreek-e-Taliban Pakistan (TTP) have resurfaced in recent times and issued threats against Chinese interests. The TTP, ideologically different from the Baloch separatists, has its own reasons – including anger at China’s treatment of Uyghur Muslims – to oppose the Sino-Pak partnership. They too have attacked Chinese workers in the region. The upshot is that Pakistan has had to deploy thousands of troops and police in protective duties, and even that hasn’t prevented all incidents. The security challenge not only increases the costs of CPEC (funds spent on fencing, guards, convoys, etc.), but also frays the nerves of investors. If parts of the corridor are unsafe, the envisioned connectivity and commerce cannot thrive. In the worst case, persistent insecurity could deter China from fully realizing some projects (for instance, private Chinese investors might be reluctant to set up factories in an unstable province, no matter the tax incentives).
In sum, the internal hurdles confronting CPEC highlight a critical reality: mega-projects must ultimately deliver for the local population if they are to succeed. Neglecting community inclusion, environmental stewardship, and equitable development among regions can turn even well-intentioned investments into sources of discord. Pakistan’s policymakers are increasingly aware of these issues – we see more rhetoric now about “inclusive CPEC” and initiatives to train local workers or allocate more projects to neglected provinces. However, these course-corrections are still in early stages. The long-term success of CPEC will depend not just on building roads and power plants, but on winning the hearts and minds of Pakistanis across all provinces, so that they feel it is their corridor, not just China’s or the central government’s.
Regional Reactions: The Geopolitical Landscape
CPEC may be unfolding within Pakistan’s borders, but its ripple effects extend across South Asia and beyond. By virtually any measure, CPEC is as much a geostrategic venture as an economic one, and other countries have been recalibrating their policies in response. This section looks at how key regional players view CPEC – notably India, as well as other neighbors and global powers – and how the corridor is influencing the broader geopolitical chessboard.
India’s Opposition: No country has been more openly hostile to CPEC than India. From New Delhi’s perspective, CPEC is problematic on multiple levels. First and foremost is the issue of sovereignty: the CPEC route from China to Pakistan cuts through Gilgit-Baltistan, a territory administered by Pakistan but claimed by India as part of the disputed Kashmir region. Indian leaders argue that by building infrastructure in what they call “Pakistan-occupied Kashmir,” China is infringing on India’s territorial integrity. Every few months, India lodges formal diplomatic protests, and it pointedly boycotts the Belt and Road Initiative summits citing this concern. But aside from legal objections, India sees CPEC as a strategic power play by China in India’s backyard. The prospect of a Chinese-supported Pakistani port at Gwadar, possibly with dual-use (commercial and military) capabilities, rings alarm bells in New Delhi. It feeds into India’s fear of encirclement by China – often referred to as the “string of pearls” theory, where China acquires a network of ports in the Indian Ocean. With CPEC, that “string” has one very valuable pearl on India’s western flank. Indian military planners have to consider scenarios where, in a future conflict, China could use Pakistani infrastructure to its advantage or even base naval assets at Gwadar. This has driven India to respond in several ways. Diplomatically, India has drawn closer to the United States and other Indo-Pacific partners who share concerns about China’s expanding influence. Joint statements by U.S. and Indian officials have subtly alluded to ensuring regional connectivity projects are “responsible and sustainable” – coded language critiquing BRI/CPEC without naming them.
Economically, India has promoted alternative routes and partnerships. One prominent project is the development of Chabahar Port in Iran, which India has helped finance. Chabahar lies just along the coast from Gwadar (around 70 km away) but crucially, it is outside Pakistan’s control. India’s goal is to use Chabahar to access landlocked Afghanistan and Central Asia for trade, bypassing Pakistan entirely. This initiative is part commercial, part strategic – it provides an answer to Gwadar and ensures India isn’t left out of regional trade loops. Moreover, India has invested in international North-South Transport Corridor (involving Iran and Russia) aiming to link Indian Ocean ports to Central Asia and Europe. While these aren’t one-for-one “counter-CPEC” projects, collectively they indicate India’s effort to present a non-Chinese connectivity vision. On the security front, some analysts suspect India might indirectly support insurgent elements in Balochistan as a way to bog down CPEC (India denies this, but Pakistan has accused Indian intelligence of abetting Baloch militants). At the very least, India leverages the troubles in Balochistan on the world stage, highlighting human rights issues there to embarrass Pakistan and cast CPEC in a negative light.
China’s Perspective and Global Response: For China, CPEC is a test case and symbol of its BRI ambitions. Success in Pakistan would demonstrate that China can be a net provider of prosperity and stability in other countries, not just an export-driven giant. However, the pushback from India and some Western nations has compelled Beijing to defend and adjust its BRI narrative. Chinese officials emphasize that CPEC is purely an economic initiative intended to benefit the people of Pakistan, and that China has no hidden military agenda in Gwadar or elsewhere. They also have engaged in a charm offensive with neighboring countries – for instance, extending invitations to Afghanistan and Central Asian states to potentially link up with CPEC, in hopes of broadening the project’s appeal. There is talk of rail links from western China through the Wakhan corridor into Afghanistan, or roads from Gwadar into landlocked Central Asia, which if realized could assuage concerns that CPEC is a Pakistan-only elite club. However, these plans remain conceptual for now, given Afghanistan’s instability and broader regional distrust.
The United States and other Western countries have watched CPEC with a wary eye. During the Trump administration, high-level U.S. officials openly criticized CPEC as a debt trap and warned Pakistan of the financial risks. The U.S. also has strategic reasons: CPEC solidifies Pakistan’s alignment with China at a time when Washington was hoping to peel Pakistan away from Chinese influence (especially as U.S.-Pakistan ties frayed post-Afghanistan). American think-tanks and diplomats often highlight the lack of transparency in CPEC and question whether Chinese financing adheres to international standards of debt sustainability and environmental protection. The U.S. even floated alternatives – for example, the Blue Dot Network, a proposed certification scheme for quality infrastructure, and the International Development Finance Corporation (DFC) to offer developing countries non-Chinese funding options. In reality, though, Western nations haven’t offered anything matching the scale of CPEC to Pakistan. Europe’s stance is less vocal, but there is a general skepticism in EU capitals about BRI projects; they worry about governance standards and geopolitical influence. Interestingly, some Gulf Arab states, traditionally close to both the West and Pakistan, have shown interest in CPEC. Saudi Arabia and the UAE have pledged investments in Pakistan (including possibly in Gwadar’s refinery and oil storage facilities). Their involvement could provide much-needed capital to Pakistan and also diversify the partnership beyond just China. However, it could also be seen as them trying to gain a foothold in a Chinese-led project, which adds another dimension to the power interplay.
For smaller neighbors like Afghanistan, Nepal, Bangladesh, or Sri Lanka, CPEC is often viewed through the prism of China-India competition. Nepal and Bangladesh have their own BRI projects and they observe CPEC to gauge how dealing with China works out for Pakistan. Afghanistan, under its previous governments, expressed a desire to join CPEC for the economic benefits, but the turbulent politics and now the Taliban’s rule make its integration difficult. Iran, somewhat isolated due to sanctions, actually welcomed CPEC – it said it complements Iran’s own aspirations to be a trade corridor (Iran even offered Pakistan and China use of Chabahar in tandem with Gwadar). This suggests that not all regional response is adversarial; some see connectivity as a tide that could lift all boats if managed cooperatively.
Overall, CPEC has clearly altered South Asia’s geopolitical calculus. It has deepened the China-Pakistan axis, much to India’s dismay, and has become a new factor in Indo-Pakistani tensions (already high due to Kashmir and other issues). It has also inserted China more directly into the region’s affairs, meaning regional issues from Kashmir to Afghan stability now have a Chinese stake. Some worry that South Asia could become more polarized: on one side, a China-Pakistan bloc; on the other, an India-U.S. (and maybe partners like Japan/Australia) understanding – with smaller countries choosing sides or trying to stay neutral. For Pakistan itself, aligning so closely with China comes at a time when its earlier alliance with the U.S. has weakened. Islamabad must perform a delicate balancing act: reaping the fruits of Chinese partnership without completely burning bridges with the West or provoking India into open hostility. How well it manages that will influence regional peace and Pakistan’s own security. As we turn to the conclusion, it’s evident that CPEC’s story is not just about trucks on a highway or megawatts on a grid – it’s about Pakistan’s place in a changing world order.
Conclusion: Weighing the Balance – Game-Changer or Trojan Horse?
A decade into the China–Pakistan Economic Corridor, Pakistan stands at a crossroads shaped by both hope and uncertainty. On one side of the ledger, the gains from CPEC are visible and undeniable. Critical infrastructure that Pakistan sorely needed – highways, power plants, ports – now exists because of this partnership. Blackouts have eased; travel times between key cities have shortened; a neglected port city (Gwadar) has a chance, at least on paper, to become an international trading hub. In the short term, CPEC delivered an economic stimulus, creating jobs in construction and related industries, and contributed to Pakistan’s GDP growth during its early years. It also fortified Pakistan’s alliance with a superpower-in-the-making, China, offering a measure of strategic reassurance at a time of regional volatility. These are the elements of the “New Silk Road” narrative: connectivity leading to commerce, commerce leading to prosperity, and an ancient partnership rejuvenated for the 21st century.
On the other side of the balance sheet, however, are the accumulating costs and risks that have become increasingly apparent. The “New Dependency” fears are not unfounded: Pakistan’s external debt repayments have risen, and a sizable chunk of its economic future is now tied to decisions made in Beijing. The country’s elites may feel confident in Chinese goodwill, but true economic sovereignty is tested when tough choices arise – for example, if Pakistan ever needs to renegotiate terms or seek debt relief, it will have far less leverage dealing with a single large creditor (China) than it would in a more diversified investment scenario. The burden of expensive power agreements, if left unaddressed, threatens to squeeze Pakistan’s budget for years, meaning ordinary Pakistanis could pay more for electricity or face cutbacks elsewhere. Internally, CPEC’s uneven impacts have aggrieved some citizens and regions, which could worsen social cohesion if not managed. Externally, Pakistan’s entanglement in great-power rivalry has increased; it could face punitive actions or lost opportunities with the West and regional isolation from India and its partners, who view Pakistan now firmly through a China-tinted lens.
So, is CPEC ultimately a boon or a bane for Pakistan? The evidence suggests it is both, depending on the time frame and the lens of analysis. In the immediate term, Pakistan very much needed what CPEC brought: energy and infrastructure. No other partner was offering anything on remotely the same scale, and the country’s developmental delays were exacting a heavy human and economic toll. CPEC filled that gap decisively – perhaps too decisively, as the oversupply of energy indicates. But the longer term is murkier. The “game” has indeed changed, yet not all Pakistan’s old problems have vanished. Economic growth remains patchy and heavily contingent on external factors. The hoped-for surge of foreign investment outside of CPEC hasn’t materialized strongly; some investors still hesitate, concerned about Pakistan’s stability and, ironically, about Pakistan being too tied to Chinese standards or preferences. The “dependency” question will ultimately hinge on Pakistan’s economic management and diversification going forward. If Pakistan can use the CPEC infrastructure as a foundation to build a more self-reliant, export-oriented economy – one that generates the resources to pay off loans and improve living standards – then the equation can turn out positive. In that scenario, CPEC’s roads and power plants would indeed serve as an engine for broad-based growth, justifying the debt incurred. If, conversely, Pakistan fails to undertake necessary reforms, remains noncompetitive, and treats CPEC as a one-time windfall without follow-up, then the liabilities will mount without the means to discharge them – a troubling scenario of dependency and even diminished sovereignty.
Policy choices made in Islamabad (and to an extent in Beijing) will determine which way the pendulum swings. On the Pakistani side, several steps can help tilt CPEC toward a sustainable boon rather than a bane:
Strengthening Transparency and Accountability: Pakistan would benefit from openly reviewing and renegotiating any CPEC agreements that are deemed unfair or too burdensome. Sunshine can be a great disinfectant; if some power purchase deals are strangling the energy sector, acknowledging that and seeking to amend terms (even if it means hard talks with China) is better than denial. Going forward, new projects under CPEC’s umbrella should be evaluated with rigorous cost-benefit analyses and open competitive bidding where possible, to ensure Pakistan gets value for money.
Economic Reforms and Diversification: CPEC on its own can’t fix structural issues like low tax revenue or a narrow export base. Pakistan needs to reform its fiscal policies – broaden the tax net so it can service debt without crippling austerity, and invest in education and skills so its workforce can take advantage of new industries. The government must also actively court investors from other countries to set up in the SEZs, ensuring China isn’t the only game in town. If European, Middle Eastern, or Southeast Asian companies also invest in Pakistan, it will create a healthier balance and reduce overreliance on any single partner.
Inclusive Development: To quell internal tensions, CPEC’s benefits have to be shared more evenly. That means prioritizing projects in neglected provinces in the next phases – for instance, accelerating infrastructure and social projects in Balochistan and KP, and ensuring locals there are employed and trained. It also means consulting local communities more in project planning to avoid trampling on livelihoods and the environment. When people feel ownership of projects, they are more likely to support and protect them. Pakistan’s unity and internal stability are prerequisites for CPEC’s success, so addressing provincial grievances is not just a political nicety but an economic necessity.
Security and Political Stability: A proactive approach to security is needed that goes beyond deploying troops. Pakistan will have to continue delicate talks with insurgent-prone communities, maybe offering political dialogue or economic packages to undercut militant narratives. Additionally, a stable political environment in the country – smooth transitions of government, and consensus around CPEC’s importance with proper oversight – will reassure China and other investors that Pakistan is a safe bet. Political infighting in the past slowed CPEC; a shared national vision would help it stay on track without abrupt policy reversals.
For China’s part, if it wishes to dispel the image of a neo-colonial patron, it could consider debt relief measures for Pakistan, such as extending loan maturities or lowering interest rates on some CPEC loans, especially given Pakistan’s recent economic distress. Chinese companies can also do more to engage in technology transfer and hiring of local talent, which would answer critics who say CPEC is too insular. Such gestures would strengthen the narrative that CPEC is a collaborative partnership rather than a transactional arrangement.
In closing, the story of the China–Pakistan Economic Corridor is still being written. The metaphor in the title – Silk Road or Dependency – suggests two divergent outcomes, but reality might land in a nuanced middle. CPEC has undeniably woven Pakistan more deeply into the fabric of the Belt and Road’s new silk routes, bringing opportunities that were once out of reach. Whether this weaving leads to a strong tapestry of shared prosperity or an entangling web of dependence will depend largely on how the involved parties steer the project from here. Pakistan’s challenge is to harness CPEC as a catalyst – to build upon it with sound policies and diversified ties so that, eventually, the country can stand on its own economic feet. Success would mean Pakistan evolving from an aid-dependent nation to a trade and transit hub that can leverage its geographic position without compromising its autonomy. Failure, on the other hand, would resemble the cautionary tales of overreliance, where immediate relief gave way to long-term relapse.
As of 2025, the balance remains delicate. The new highways are built, but the journey towards sustainable development is ongoing. In the years to come, Pakistanis and observers alike will watch closely: Will CPEC fulfill its promise as a new Silk Road to prosperity, or will it serve as a sobering lesson in the perils of unchecked dependence? The answer will reveal itself in the lived experience of Pakistan’s economy and governance – in whether the lights stay on not just because of new power plants, but because the nation can pay the bills and use that power productively; in whether Gwadar thrives as a bustling port city or lingers as a fenced enclave; and ultimately, in whether Pakistan can confidently call itself the master of its economic destiny while reaping the benefits of friendship with China. The stakes could not be higher, and the world will be watching this pivotal experiment in international development with keen interest.
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