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China Pakistan Economic Corridor — A new route to trade.

April 2015 was a historic month for Sino-Pakistan relations when Chinese President Xi Jinping and Pakistani Prime Minister Nawaz Sharif signed an agreement worth $46 billion for the China-Pakistan Economic Corridor (CPEC), which is the considered to be the largest investment by China in a foreign country. This Corridor is of high significance, as it shall run through one of the most vital geostrategic locations in South Asia. It shall mainly act as a trade bridge between China, the Middle East and Europe through Pakistan but will generate thousands of jobs and revenue worth billions of dollars for both countries.
The major benefit of forming CPEC in terms of trade route will be that China currently relies on the shipping route that passes through the Strait of Malacca and it takes some 45 days to reach Europe via the Middle East but when the CPEC is completed, it would take approximately 10 days for Chinese shipments to reach their destination, as the Kashgar-Gwadar route will play  a pivotal role in reducing the staggering amount of time and distance.
However, despite the positive outlook of the CPEC, we also need to understand the potentially long run negative impact it shall have on Pakistan’s industrial sector. The goods from China will likely flood Pakistan’s market more rapidly, which will potentially slow down or in worse case cripple the local industry. Furthermore, Pakistan may only get royalties from CPEC and China may require Pakistan to open trade route for Chinese goods to pass into Afghanistan, Iran and India depending on the economic situation. Though Pakistan has never granted Most Favoured Nation (MFN) status to India, a possibility might become a need in the future that must be taken care of.
Pakistan needs to secure its own national interests and keep the balance of its relations with both China and the West for relying on one sphere of influence can damage relations with the other. By becoming a diplomatic balancer, as pointed out previously, Pakistan can get the best from both powers and bridge their sloppy relations. CPEC is indeed a great ‘game changer’ which should complete its short term goals but for long-term trade goals, Pakistan shall really have to explore all options so that its own economy doesn’t get trampled beneath.

 

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