CPEC 2.0: Pakistan, China shift focus to B2B investment

Pakistan and China are moving toward a more business-driven model of cooperation under the second phase of the China-Pakistan Economic Corridor (CPEC),

ISLAMABAD: Pakistan and China are moving toward a more business-driven model of cooperation under the second phase of the China-Pakistan Economic Corridor (CPEC), with greater emphasis on Business-to-Business (B2B) partnerships, industrial development, exports and productivity rather than large-scale Government-to-Government (G2G) financing.

The development emerged during a high-level Chinese delegation’s visit to the CPEC Secretariat, where discussions focused on strengthening industrial and commercial ties between the two countries.

According to an official statement issued by the Ministry of Planning on Tuesday, the Chinese delegation was headed by Sun Dongsheng, Senior Advisor, Economic Affairs Press. The delegation met Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, along with senior policymakers and development experts.

The talks centred on ways to advance B2B and industrial cooperation under CPEC 2.0, reflecting a broader shift in the corridor’s priorities from infrastructure-led development toward industrialisation, exports, technology and private-sector participation.

From infrastructure to industrialisation

During the meeting, Ahsan Iqbal briefed the Chinese delegation on the government’s Uraan Pakistan economic transformation programme and outlined Islamabad’s priorities for the next phase of CPEC.

The minister proposed closer cooperation with Chinese institutions, including counterparts of the National Centre of New Manufacturing, to benefit from China’s experience in advanced manufacturing, innovation, automation and robotics.

He said Pakistan needed to strengthen its productive capacity and adopt modern technologies to remain competitive in the era of Industrial Revolution 4.0 and prepare for the emerging Industrial Revolution 5.0.

Ahsan Iqbal identified Pakistan’s limited export base as one of the country’s major economic challenges. According to the minister, repeated attempts to accelerate economic growth have struggled to generate sustainable momentum because productive sectors have not been sufficiently integrated with export markets.

He stressed that the government’s priority was therefore to turn agriculture, manufacturing and other productive sectors into stronger sources of exports and foreign exchange.

Pakistan seeks greater access to Chinese market

The minister also called for greater facilitation of Pakistani exports to China, highlighting the considerable gap between the two countries’ trade potential.

He noted that China imports goods worth around $2.6 trillion annually, whereas Pakistan’s exports to the Chinese market remain close to $3 billion.

Ahsan said Pakistan needed to increase its presence in the Chinese market by improving production standards, competitiveness and the ability of domestic businesses to meet international demand.

He expressed the expectation that CPEC 2.0 could help Pakistan address what he described as its “export deficit”, just as the first phase of the corridor contributed to addressing the country’s energy shortfall.

CPEC enters a new phase

Under CPEC’s first phase, China committed substantial financing to infrastructure, energy and other development projects in Pakistan. Nearly $30 billion was invested in infrastructure and power-sector projects, including independent power producers.

However, the focus is now increasingly shifting toward private-sector-led cooperation. Islamabad continues to pursue financing for selected road and motorway projects, but China has yet to demonstrate readiness to finance the long-delayed Main Line-1 (ML-1) railway upgrade, which had previously been regarded as one of CPEC’s flagship projects.

The latest consultations indicate that CPEC 2.0 is expected to rely more heavily on commercial partnerships between Pakistani and Chinese companies.

The government has already been encouraging enterprises from both countries to explore joint ventures and investment opportunities in sectors including manufacturing, agriculture and mining.

Ahsan Iqbal said recent agreements between Pakistani and Chinese companies showed that B2B cooperation was beginning to gain momentum.

He expressed confidence that stronger business-to-business engagement would support the modernisation of Pakistan’s industrial and agricultural sectors while creating opportunities for investment, employment and exports.

China stresses productive capacity

Sun Dongsheng reaffirmed the importance China attaches to its longstanding relationship with Pakistan and highlighted the achievements of CPEC’s first phase.

He called for further cooperation in industrial and agricultural development, particularly in strengthening Pakistan’s productive capacity.

The Chinese delegation also stressed the importance of involving small and medium-sized manufacturing enterprises in bilateral economic cooperation. Greater enterprise-to-enterprise engagement, according to the delegation, could help create commercially sustainable partnerships and expand opportunities for businesses in both countries.

The discussions also focused on technology transfer, innovation, skills development and the creation of stronger industrial linkages.

Five Corridors aligned with Uraan Pakistan

Officials also discussed the strategic relationship between the Five Corridors of CPEC 2.0 and Pakistan’s 5Es framework under Uraan Pakistan.

The government’s 5Es framework focuses on exports, e-Pakistan, environment and climate change, energy and infrastructure, and equity and empowerment.

The participants stressed that alignment between the two initiatives needed to translate into concrete economic outcomes, including new enterprises, technology adoption, innovation, employment opportunities, skills development, increased exports and higher investment.

The delegation was also briefed on the progress achieved during CPEC Phase I and Pakistan’s priorities for the second phase.

The consultations suggest that the next stage of CPEC will increasingly be measured not only by the volume of infrastructure investment but also by its ability to improve Pakistan’s industrial competitiveness, expand exports, attract private investment and create sustainable employment.