Since it was first proposed by President Xi Jinping in 2013, the Belt and Road Initiative (BRI) has become the most popular public good and the biggest cooperation platform of the 21st century.

After five years of groundwork and development of comprehensive framework, the BRI has entered into the next phase of solid progress and sustained growth. The BRI has been incorporated into the outcome documents of international organizations including the United Nations, the Shanghai Cooperation Organization, and the Forum on China-Africa Cooperation.

Among different initiatives under the umbrella of the BRI, the China-Pakistan Economic Corridor (CDEC) is the flagship project.

The CPEC is an economic partnership project with the potential to transform Pakistan into a geo-economic hub. Upon completion, the CPEC will optimize Pakistan’s geographical position at the crossroads of Central Asia, Middle East and South Asia. The CPEC aims to connect Kashgar in Xinjiang to Pakistan’s seaports of Gwadar and Karachi via a 2,700-km stretch of road and rail networks. Along the route, industrial parks, logistics centres and Special Economic Zones are proposed to be built.

Since its inception, the CPEC has made great progress. In the first phase of the CPEC, tangible progress has been made in priority areas such as Gwadar port, infrastructure, energy projects, industrial parks and Special Economic Zones. Over the past five years, 11 projects have been completed under CPEC, and 11 are in construction stage. Total investment of these 22 projects are worth about $18.9 billion and there are 20 more projects in the pipeline.

In the energy sector, there are around 21 projects. A total of 15 prioritized energy projects will add around 11,110MW of energy into the national grid. Seven energy projects have been completed and six are under construction. CPEC energy projects include hydro, solar and coal-fired power plants. The major coal-based projects are based on super-critical technology.

Among infrastructure projects, there are two big road projects: the KKH

Phase-II (118 km), and Peshawar-Karachi Motorway (Multan-Sukhur Section, 392 km), which are in the completion phase. Both sides are also working on details of a dry port at Havelian, up-gradation of existing 1,872 km of railway line, also called the Main Line-I or ML-I, and the Karachi Circular Railways (KCR). A 27-km urban mass transit system in Lahore will also be completed this year. These projects account for $5.87 billion of preferential loans from China.

In addition to building the Gwadar port, there are different auxiliary projects. The Gwadar East Bay Expressway and the Gwadar Free Zone are in implementation phase and Phase-I of Gwadar Free Zone has been completed. Around 30 companies have committed investment of $400 million in the Free Zone.

Further, the New Gwadar International Airport, Gwadar Friendship Hospital and Gwadar Technical and Vocational Institute are expected to be launched this year. In Sept 2016, China-Pakistan Friendship School was established in Gwadar that accommodates around 500 students. China is also providing a large number of scholarships to Pakistani students, and around 25,000 are currently studying in China. Both countries have also established linkages in the field of science, technology and education.

In economic ties, both sides have identified nine Special Economic Zones under the CPEC. Three of them, Rashakai Economic Zone, Dhabeji Economic Zone and Faisalabad M-3 Economic Zone, are at advanced stage and expected to be launched this year. These economic zones are an important part of second phase of the CPEC that will lead to industrial relocation and development, job creation and skill development in Pakistan, which lays a good business foundation for small and medium-sized Chinese enterprises.

Additionally, a cross border fiber optics project with total length of 820 km has already been completed. China will also set up six poverty alleviation demonstration zones in Pakistan under socio-economic development and poverty alleviation cooperation. Both sides have also established frameworks for cooperation in fields such as agriculture, industry, oil and gas as well as education.

The CPEC projects have already realized Chinese investments and are creating local jobs in Pakistan. China has become the largest trading partner of Pakistan and the biggest source of FDI, and the bilateral trade crossed $20 billion last year.

As the CPEC enters into its next phase, Pakistan and China view with satisfaction the development of the CPEC and its projects in the first phase. For the next phase, both countries are working closely for timely completion of the agreed projects and to chalk out a course for realization of the full potential of the CPEC. This phase will have more focus on socio-economic development, job creation and livelihood. For that purpose, both countries have outlined socio-economic development and poverty alleviation, industrial development and agriculture cooperation as the priority areas.

It is important to note that the development trajectory of the CPEC fully dovetails with local conditions and requirements. Five years ago, Pakistan was an energy and investment deficient country. With the CPEC, and in a short span of time, we have been able to meet the investment gap to generate energy, build infrastructure and create jobs. Energy generation and infrastructure building have played an important role in starting economic activity in Pakistan, paving way for the industrialization that needed.

It revitalized Pakistan’s economy with stable growth of 5.8 percent last year. In the next phase, our focus is to address the structural problems by shifting the economy from "foreign-funded consumption-led growth" to "productivity-led export oriented growth". For this, the next phase of the CPEC will fill the capacity and the productivity gaps through industrial expansion, skill development, exports growth and poverty alleviation.

How did the CPEC make such progress and achieve such tangible outcomes in a short period of time? It is because: One, the CPEC is based on the spirit of win-win cooperation and shared benefits. It is in the interest of both countries to develop the CPEC, enhance connectivity and promote trade. Two, the CPEC is an open, inclusive and transparent economic partnership project. It is not directed at any third party or third country. Three, our approach is based on mutual respect, consultations and cooperation. Pakistan and China are good neighbors, good friends and good partners. Both sides are guided by the spirit of mutual understanding and cooperation. Last, it is a futuristic and forward-looking initiative.

As said earlier, in its first phase, the CPEC focused on the priority areas of infrastructure, energy and port building. As the BRI moves ahead, the need for a comprehensive framework for third-party cooperation will further increase. More emphasis will be on green, environment-friendly and sustainable development.

The BRI is creating its own norms of global cooperation in addition to existing global norms and laws of participating countries. There is a need to further strengthen policy coordination, improve financial integration, streamline the legal apparatus, enhance people-to-people bonds and boost regional connectivity.

Masood Khalid is ambassador of the Islamic Republic of Pakistan in Beijing.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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