South Asia Center Nonresident Senior Fellow Claude Rakisits writes for World Affairs Journal on the $46 billion China-Pakistan Economic Corridor (CPEC), which consists of both transportation and energy projects:
When Chinese President Xi Jinping went to Pakistan on an official visit in April 2015, he brought with him a $46 billion gift that potentially could have very significant benefits for that country, as well as have a major impact on the region. And although there remain a number of unknowns on how this massive Chinese investment package will be implemented over the next 15 years or so, it is certain that it will pull Pakistan even deeper into Beijing’s geostrategic orbit. Even though China and Pakistan have had a long and fruitful relationship for well over 50 years, if all the projects associated with this deal are ultimately implemented, it will be a game-changer for the region—equal to all the foreign direct investment inflows into Pakistan since 1970 combined and dwarfing the $7.5 billion US aid package passed by Congress in 2009.
This $46 billion deal, known as the China-Pakistan Economic Corridor (CPEC), is essentially a package of major projects that fall into two domains: transportation and energy. On the transport side, there are about $12 billion in plans to build, among other things, a rail link connecting Gwadar, a Chinese-built deep-sea commercial port on Pakistan’s southern coast, to the western Chinese city of Kashgar, some 2,000 miles to the north. Other projects include widening the treacherous Karakoram highway, itself previously built with Chinese help; upgrading Gwadar airport; building a 125-mile tunnel linking the two countries; and upgrading a number of existing highways, including the critical Karachi-Lahore section.