An Insight into CPEC performance

A great game changer, the China-Pakistan Economic Corridor (CPEC), which was launched in its first phase in 2013, has since emerged as a flagship initiative of strategic significance, fostering regional connectivity, economic growth and socio-economic development while reinforcing the enduring partnership between Pakistan and China. Over the past decade, CPEC has transitioned from a vision of connectivity into a comprehensive development framework, delivering tangible progress across key sectors and contributing to Pakistan’s economic transformation.

After the quite successful completion of the first phase, brisk preparations are underway in Beijing and Islamabad at the appropriate high levels, under the leadership of Chinese President Xi Jinping and Pakistani Prime Minister Muhammad Shehbaz Sharif, for formally launching CPEC 2.0 during 2026.

According to the information gathered from the official sources concerned, on the Long-Term Plan, the 14th ICC formally agreed to review the CPEC Long-Term Plan (2017-30) in the light of the Memorandum of Understanding (MoU) on alignment of the CPEC five corridors with the National Economic Transformation Plan (URAAN Pakistan) and the action plan to foster an even closer China-Pakistan community.

The 14th ICC had further directed the adoption of the action plan for fostering an even closer China-Pakistan community with a shared future in the new era (2025-2029), signed in September 2025. The 14th ICC had also further directed the adoption of the action plan as the guiding document for CPEC 2.0, and an action matrix accordingly has been prepared by the official quarters concerned and shared with the ministries and divisions of the Federal Government. Inter-agency consultations on the revised Long-Term Plan (LTP) were underway.

As regards socio-economic development, about 15 out of 17 approved projects have since been quite successfully completed, while two remaining projects were reported to be at an advanced stage of execution and were expected to be finalized soon. Furthermore, seven new development initiatives have been proposed under the third batch and submitted to the China International Development Cooperation Agency for consideration and approval. These projects include the provision of modern agricultural machinery and equipment for agro-mechanization, the supply of fiberglass fishing boats to coastal communities, the construction of a fish-landing jetty at Gwadar to strengthen the fisheries value chain, the establishment of integrated cold-chain systems for horticulture and perishable products, and other livelihood-oriented interventions aimed at enhancing local productivity, food security, employment generation, and export potential in underserved regions.

During the year, efficiency improvement measures were taken in the power sector for enhancing operational performance, improving grid stability, and optimizing the utilization of existing generation and transmission infrastructure. Stakeholder consultations were also conducted for addressing issues related to bulk electricity supply for Special Economic Zones (SEZs), aimed at facilitating industrialization and investment under CPEC 2.0. A major achievement of the sector was the continued utilization of indigenous Thar coal resources, which contributed towards reducing dependence on imported fuels, strengthening energy security, conserving foreign exchange reserves, and ensuring reliable base-load electricity supply for industrial and domestic consumers.

As regards transport infrastructure, the upgradation of the Main Line-1 (ML-1) railway project, spanning approximately 1,872 km from Karachi to Peshawar, remained a strategic priority under bilateral cooperation. During the reporting period, third-party financing discussions by the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) advanced for the Karachi-Rohri section, while detailed financing and implementation proposals were also developed for the remaining sections up to Peshawar in close coordination with the Chinese side. Once completed, ML-1 was expected to substantially enhance Pakistan Railways’ operational efficiency by increasing train speeds from 65-105 km/h to nearly 160 km/h, improving freight-handling capacity, reducing transit times, and strengthening north-south economic connectivity across the country.

Significant headway was also achieved on the Realignment of Karakoram Highway (KKH-Phase II) Project under the Government-to-Government (G2G) framework. Both sides have operationalized a phased implementation strategy and reached broad consensus on an 85:15 financing ratio.

In Gwadar, the operationalization and consolidation of strategic infrastructure projects continued to gain momentum. The East Bay Expressway, a 19-kilometre, six-lane corridor connecting Gwadar Port with the Makran Coastal Highway, continued to improve port accessibility, reduce cargo transit time, and enhance logistics efficiency for commercial and port-related traffic. Further progress has also been achieved on Phase-II initiatives aimed at connecting Gwadar Port with the New Gwadar International Airport, including discussions on grant financing modalities and finalization of the draft Framework Agreement to strengthen integrated sea-air connectivity among Gwadar Port, Gwadar Free Zones, and the airport.

Gwadar Port and the Free Zones have made further progress toward operational maturity through improved infrastructure provision, enhanced utilities connectivity, investor-friendly fiscal incentives, and continued policy facilitation measures by the Pakistan Government. Increased focus has also been placed on attracting industrial relocation, export-oriented manufacturing, warehousing, fisheries processing, and logistics-related investments in Gwadar Free Zone. Parallel progress has also been achieved on multiple road infrastructure projects, including strategic expressways and motorways, through the mechanisms of the Joint Working Group (JWG) on Transport Infrastructure and the Joint Technical Working Group (JTWG), thereby reinforcing Pakistan’s long-term objective of developing an integrated multimodal transport and logistics network under CPEC.

Mining cooperation has also emerged as a major new pillar of CPEC 2.0, thereby reflecting the shared commitment of both countries to unlock Pakistan’s vast untapped mineral potential through bilateral cooperation, technology transfer, industrial cooperation, and investment partnership. During the period under review, both sides agreed to undertake a joint feasibility study for the proposed Mining Corridor connecting Nokundi with Gwadar Port. The proposed initiative was expected to substantially reduce transportation costs, improve supply-chain efficiency, and facilitate large-scale movement of copper, gold, rare earth elements, chromite, and other strategic minerals. The corridor would also complement ongoing developments in Reko Diq and other mining regions, while also laying the foundation for transforming Balochistan into a major mining, processing, and export-oriented economic hub.

The last year has also witnessed quite significant progress in industrial cooperation under CPEC, with continuous development of Special Economic Zones (SEZs) and expeditious provision of basic utilities, especially electricity. Phase-1 of Rashakai SEZ has been successfully operationalized, while development works at Allama Iqbal Industrial City (AIIC) and Bostan SEZ were advancing steadily, with approximately 30 industrial plots allotted to domestic and international investors at AIIC and 17 enterprises registered at Bostan SEZ. Dhabeaji SEZ continued to make progress on key enabling infrastructure, including natural gas, electricity, and water supply. In the mining sector, a Sub-Mining Working Group has been established under the JWG on Industrial Cooperation, and Siah Diq Copper Mine was identified as an early harvest project. China Minmetals Corporation has already initiated work on a feasibility study for a non-ferrous metals industrial park in Pakistan.

Pakistan-China Information Technology (IT) cooperation has witnessed institutional progress. A defining milestone was the signing of two Memoranda of Understanding (MoUs) in September 2025: (i) jointly building the China-SCO (Pakistan) Artificial Intelligence (AI) Application Cooperation Center, and (ii) enhancing AI cooperation between the Federal Ministry of Planning, Development & Special Initiatives and China’s National Development and Reform Commission. Technical Working Groups were established comprising representatives from the CPEC Secretariat and relevant Federal Ministries, with the National Centre of Artificial Intelligence (NCAI) assuming a leading implementation role. The ICT Cooperation Action Plan (2026-2030) was also finalized, establishing six Sub-Working Groups, 62 KPIs, and a US$320 million investment framework with a 65:35 contribution ratio between China and Pakistan, while preparatory work was also undertaken across digital infrastructure, cybersecurity, 5G readiness, and digital skills development.

Pakistan-China Science, Technology, and Innovation (STI) cooperation also witnessed significant progress across multiple dimensions. Two sub-centres under the Joint Laboratories Framework became operational, four joint research projects were approved under the open fund mechanism, and the China-Pakistan Joint Research Centre on Earth Sciences conducted eight international seminars while also establishing a hazard monitoring network at eight sites in northern Pakistan. In joint research, 101 proposals were placed under review and 707 met eligibility criteria across priority areas, including climate change, agriculture, health, and artificial intelligence. Capacity-building milestones included the development of 32 Science, Technology, Engineering and Mathematics (STEM) modules, the establishment of 31 STEM laboratories, and the training of 200 teachers. The Talented Young Scientists Programme (TYSP) facilitated 402 Pakistani scientists for engagements in China, with 123 additional cases under process, while the first joint marine research cruise was successfully completed.

Note: May be published in two parts in view of its being rather lengthy due to coverage of all aspects of CPEC, please. M.Z.R.