Posted on 8 May, 2018 at 02:00 PM
China Pakistan Economic is an important project reached by the two countries. It has great importance due to its strategic position. CPEC was executed in May 2013 and both sides agreed to promote a 1+4 pattern of economic cooperation. 1+4 projects are termed as CPEC and four major areas including the Gwadar port, transportation, energy and industrial cooperation.
During the visit of Prime Minister Imran Khan to China, both sides reaffirmed the future trajectory of CPEC and its ongoing projects with a focus on social economic development, job creation, livelihood and cooperation between industrial parks and agriculture. over the past 5 years, almost 11 projects have been completed under CPEC and 12 projects are under development. The total investment of 23 projects is 18.9 billion. There are 20 more projects are under consideration.
CPEC is one of the largest projects under CPEC and it is one of the great political, social and economic significance to Pakistan and China.
Both countries set up a Joint Cooperation Committee and there are 7 joint working groups under JCC namely energy, planning, energy, transportation, Industrial cooperation, Gwadar port, social economic development and international development. The JCC secretaries are established in the Ministry of Planning and National Development and Reform Commission. Both are responsible for communicating and coordinating with each other regarding CPEC projects.
Energy is the major power engine and economic development which provide the facility to industries and improve the lives of millions of people.
Pakistan and China-focused and highlighted the energy projects. There are 15 energy projects which are planned as the total generation capacity of 11,110 MW. Almost 7 projects are completed and are in operation while 6 projects are under construction with capacity of 6,910 MW.
CPEC energy projects include hydro, coal-fired and solar power plants. These energy projects are providing
Efficient transportation network is key to economic development. Currently, KKH Phase-II (Havelian-Thakot section), Karachi-Lahore Motorway (Sukkur-Multan section) and Lahore Orange Line are 3 projects under construction. The information highway for Laying of optical fiber cable (OFC) from Rawapindi to Khunjrab is in operation. These ongoing projects are funded by preferential loans from the Chinese government at around 2% interest rate with a total amount of 5.874 billion USD. The up-gradation of ML1 railway and the KCR are under discussion.
According to an agreement between China Overseas Ports Holding Company (COPHC), Gwadar Port Authority (GPA) and Singapore Port Authority in 2013, the development and operation of Gwadar Free Zone was handed over to the COPHC. Up to now, COPHC has invested 250 million USD in the port renovation. 5 new quay cranes, a 100,000 M2 storage yard, a seawater desalination plant with capacity of 220,000-gallon pure water/day, 2 sets of sewage disposal systems and cargo handling equipment have been installed and 80,000 M2 green space has been added to the port area. 400,000 tons of cargoes have been handled by Gwadar Port in 2017.
The federal government of Pakistan and each province have attached paramount importance to industrial development and the construction of SEZs. The work has been in progress with the joint efforts of both sides. In November 2015, Pakistan proposed to set up industrial cooperation working group under JCC, claiming that Pakistan has advantages such as adequate labour force and huge market potential to develop manufacturing. China agreed to strengthen cooperation in the following industries: steel, cement, automobile, construction materials, home appliances, textile, light industry and apparel, etc.
Localization is the principle that China adheres to in CPEC. According to the preliminary statistics, CPEC projects have created more than 75,000 direct job opportunities for Pakistani people. In order to promote economic development and employment of Pakistan, Chinese companies also subcontract a large number of projects to local Pakistani companies. This also develops relevant upstream and downstream industries, such as raw material processing, catering industry which also provide more employment opportunities for local people.
In line with the consensus reached between leaders, relevant ministries and departments of both countries have set up a cooperation mechanism to coordinate the development of CPEC and jointly formulated the Long-Term Plan for China-Pakistan Economic Corridor (2017-2030). China and Pakistan signed the Long-Term Plan at the 7th JCC after obtaining consent of both federal government and all the Pakistani provincial government. The plan provided the macro guidance for implementation of CPEC in the next phase, and could be adjusted based on the real situation as well as the consensus between the two parties during its implementation in the future.