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History of China-Pakistan Economic Corridor

The plan to have a corridor connecting Chinese border with Pakistan through port dates back in 1950’s when Karakoram Highway was constructed. In 2002 China’s interest in Pakistan Port Gwadar reemerged and China started the construction of Gwadar port which finished in 2006. The expansion stopped due to the political instability of that time in Pakistan, the fall of General Pervaiz Musharaf, and the conflict between Pakistan Government and Talibans.

In 2013Asif Ali Zardari, the President of Pakistan at that time and Chinese Premier Li Keqiang came to a mutual understanding of taking this connectivity to a further level. As a result, a memorandum of understanding was inked for the long term plan of CPEC was officially signed by Shahid Amjad Chaudhry and Xu Shao

Pakistani President Mamnoon Hussain in February 2014 visited China for a detailed discussion on plans for CPEC. After this meeting Prime Minister Nawas Sharif and Premier Li Kequiang met to discuss the plans further, which resulted in the completion of scope of project planned in PMLN tenure. Furthermore, in 2014 Chinese Government announced that it will invest $45.6 billion in the infrastructure and energy projects being developed in Pakistan under CPEC by Chinese companies.

Official Announcement of CPEC

In April 2015 Xi Jinping wrote in an open editorial during his visit to Pakistan, “This will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother.” In the same month Pakistan and China officially signed an agreement to start the work on the $46 billion worth of projects which is almost 20% of annual GDP of Pakistan; there are $28 billion worth of projects which are stated to be as “Early-Harvest” projects which are to be completed by year 2018.

Further Developments

In 2015 China and Pakistan agreed on 20 more projects worth $1.6 billion in order to further expand the corridor and plan of CPEC, all being officially signed in the month of August in Karamy city, China. The details of plans are not shared but are said to be focused on the capacity improvement of energy generation. Pakistan and China have agreed to cooperate in space research as well.  

United Kingdom Government announced two separate grants in September and October of 2015 to the Government of Pakistan under which roadways are to be constructed in Pakistan which supports the corridor of CPEC. Not just this but china included CPEC in its five-year development plans on 13th number in November 2015. In December 2015 plan to setup Information and Technology park was made and the agreement worth $1.5 billion was signed.

For the development in the sectors of solar power, logistics and infrastructure an additional agreement worth $2 billion were signed in April 2016 during the visit of Xinjiang’s visit. First team from China reached Gwadar in November 2016 commencing the operations of CPEC. In December 2016, the first cargo train departed from Yunnan, officially launching the sea freight service directly between China and Pakistan. The newly developed sea and rail shipping will make the logistics and transport cost decrease by 50 percent.

In November China announced to invest in the infrastructural development in Pakistan’s main railway line which goes from Karachi to Peshawar, it will focus on the tracks, improvement in speed and signaling the investment is worth $4.5 billion. Additional $4 billion was invested in LNG terminal and transmission to Improve the shortages in energy generation.

In February 2017, Ambassador of Egypt also showed his interest in CPEC to Pakistan where as in January 2017 Chief Minister Khyber Pakthunkhwah, Mr. Pervez Khattak said that Chinese investment companies have assured that they will invest almost $20 billion for development Projects in CPEC.

In March 2017 some agreements were signed for projects which included oil refinery project worth $1,5 billion, $2 billion worth irrigation projects, $2 billion worth motorway project between Chitral and Dera Ismael Khan and $7 billion worth project of hydro-electric.

In September 2017 projects worth more than 14 million were in the phase of construction. In 2018 Pakistan announced the completion of those under construction projects.