China-Pakistan Economic Corridor

Written by Mona Hadi Naeem
3 · 05 · 18
China-Pakistan Economic Corridor

The China Pakistan Economic Corridor (CPEC) is an extensive, multidimensional project. It involves the construction of a complex network of roads, ports, power generation projects, and railways from Pakistan’s southern port city of Gwadar right up to Kashgar in China’s northwestern Xinjiang province. It covers a distance of 3218 kilometers.

China-Pakistan Economic Corridor

Map showing major projects of China-Pakistan Economic Corridor

A 2017 report published in the Financial Times describes CPEC as the cornerstone project of China’s One Belt, One Road infrastructure initiative. It extends through 65 countries across Asia, Africa, and Europe. It is an estimate that each year in Pakistan, between 2 to 3 million people enter the marketplace for jobs. CPECis quite a challenge for the government to create adequate jobs. After all, GDP growth has been between 5% and 6% for several years without improvement. In this scenario, CPEC jobs may be exactly what Pakistan desperately needs to improve its economic performance.

How Big is the China Pakistan Economic Corridor?

The entire investment from China has exceeded $55 billion. In the medium term, it is likely that the infrastructure development alone could generate GDP that would make up one-fifth of the country’s entire GDP. Given these facts, it is clear where most of the China Pakistan Economic Corridor jobs in the next few years will come from.

The News, the biggest newsgroup of Pakistan reported that various CPEC projects already underway have created 30,000 jobs for local people. Almost half of these are jobs in the power generation projects. The Dasu hydropower project alone has created jobs for 8000 local people. Moreover, by 2023, there will be almost 800,000 new jobs. However, we cannot rely on these figures to be exactly accurate. Nevertheless, there is no doubt that there will be numerous new jobs for Pakistani job seekers. At least in the semi-skilled sector, there will be more jobs for the next several years.

The Most Attractive Sectors for CPEC Jobs

Considering the areas where China is focusing its efforts, Chinese investment in the China Pakistan Economic Corridor will create jobs in the heavy engineering, construction, and energy sectors. This means that graduates, technicians, and laborers in these fields will find jobs more readily. The largest cement company in Pakistan is planning to triple its production capacity to meet the expected surge in demand.

However, these are not the only sectors expected to create jobs for excited Pakistanis. Language interpreters will also experience an increase in CPEC jobs. Chinese language centers have already opened up in major towns and cities of Pakistan. According to a report in the Business Recorder newspaper, there will be an estimated 40,000 jobs for Chinese interpreters in the next five years. These professionals will most likely facilitate communication between the Chinese managers of CPEC projects, their local staff, and workers.

CPEC and Tourist Industry

There will be the creation of new CPEC jobs in the hospitality and tourism sectors, as reported in The Guardian. Counterterrorism operations have resulted in a modest increase in tourism into Pakistan, which will most likely increase as China Pakistan Economic Corridor activities mature. Jobs in hotels, restaurants, and the retail sector will increase as Pakistan tries to attract Chinese and other foreign businesspersons and investors during their visits to the country.

In the long term, many other sectors are expected to pick up the pace and offer more CPEC jobs due to improved connectivity by road and rail between the two countries.

CPEC and Health Sector

China Pakistan Economic Corridor has plans to have SEZ’s or Special Economic Zones. These zones would focus on one enterprise at a time, but there will be multiple SEZs. They will spread across all the provinces in Pakistan. These SEZ’s will comprise of the following CPEC projects:

  • Pharmaceuticals
  • Food industry
  • Engineering
  • Packing

CPEC Agriculture and Food

Agriculture and the food sector are important sectors. In May 2017, Pakistan exported two tonnes of seafood, including lobsters and bass, from Gwadar to China. This reported was as a major feat in the local and Chinese media. The special thing about this export was that the cargo plied across the CPEC route, covering the distance in 34 hours. Gilgit-Baltistan is an autonomous region of Pakistan that borders China. It is a major producer of a variety of fruits including apples, apricot, and cherries. There is potential for farmers, traders, and exporters to cultivate this sector and increase job creation for young people and entrepreneurs.

CPEC and Real Estate Sector

The real estate sector will also create new CPEC jobs on the back of the boom in the construction industry. It will be important to create new housing and commercial complexes in Gwadar and along the major road networks. This would accommodate the needs of Pakistanis with housing needs. Property developers and builders are going to have a field day in these areas, which were nothing more than modest towns until a few years back.

Local Business Opportunities from CPEC

International businesses in various countries have taken notice of the rising CPEC projects in Pakistan and are testing the waters by sending frequent trade delegations and diplomats to discuss investment opportunities.

In February 2018, a business delegation from the UK visited Pakistan to discuss opportunities for infrastructure investment. According to the Russian Trade Representative to Pakistan, Russian companies are considering investing in the energy and agriculture sectors of Pakistan. The biggest project from Russia is the construction of a gas pipeline with an investment of $2 billion. Italian companies like Renault have also shown interest in setting up assembly plants in Pakistan to exploit the demand. This is likely to happen after the construction of the heavy infrastructure and road network under CPEC projects.

Pakistan is Making New International Friends

Even countries with whom Pakistan has had very small trade volumes are taking interest in CPEC and are expressing a desire to expand investment in Pakistan. Brazil, for instance, recently expressed interest. It wants to create joint ventures between Brazilian and Pakistani businesspersons. This would extend to the fields of agriculture, renewable energy, and fertilizers. All of these events serve to show that CPEC is slowly gaining the confidence of local as well as foreign investors. These developments can help to make CPEC a job creator for Pakistan’s economy.

CPEC appears to have the potential to transform the economy of Pakistan. It may help address most of its economic woes such as high unemployment, poverty, energy shortage, and reducing exports. Pakistan needs to improve on all these counts in order to improve its competitiveness in the region. CPEC projects can help Pakistan do that by increasing job and business opportunities for the local people as well as foreign investors. Those with experience or qualifications in engineering (civil and electrical, especially), power generation, hospitality, auto manufacturing, real estate, agriculture and tourism sectors can hope to benefit from the increase in job creation.

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Mona Hadi Naeem