Usman Talat Msc Finance3rd SemesterThe China-Pakistan Economic Corridor Analysis1. IntroductionChina and Pakistanhave developedstrongbilateraltrade and economi ct i es andcooperati onovertheyears.ChinahasgraduallyemergedasPakistansmajortradingpartnerbothintermsofexportsand imports.Bilateraltradeandcommerciallinksbetweenthetwocountrieswereestablished inJanuary!"# when bothsignedthefirstbilaterallong$termtradeagreement%&inistryof'inance()*+,)"-..nderthe'ree/rade0greement%'/0-betweenthetwocountries1signedon2ovember)+()**" andimplemented fromJuly( )**3 1 Pakistan secured market accessforseveralproductsofimmediateexportinterest. 4ater(bothcountriessignedthe'/0on/radein5erviceson'ebruary)()**!thatbecameoperationalfrom 6ctober * thatyear%7bid-.0ccordingtostatistics providedinPakistan8conomic 5urvey )*#$)*+(the volumeoftrade between Pakistanand China has increasedfrom.59+.billioninthe year)**"$*3to.59!.)billionin)*)$#(representinganincreaseof)+percent.:hileChinasexportstoPakistan increased byonepercent during thisperiod( Pakistansexportsincreasedby+**percentfromaround9"**millionin)**"$*3to9)."billion in)*)$#. 0saresult( Chinasshare inPakistans totalexports hasgradually picked upfromfourpercent in)**;$*! to* percent during thefiscal year)*#$+./heChina$Pakistan8conomicCor r i dor %CP8C-isexpectedtofurtherstrengthentrade a n d economi ccooperationbetweenthetwo countries.ChinesePremier4iedtheconstructionoftheCP8Cduringhis&ay)*#visittoPakistan%/ie>>i()*+-./heincumbentPakistanigovernmenthasalsoshownmuchenthusiasmfortheprojectsincethen./hecorridorwillconnect?wadarPortinBalochistan%Pakistan-to%P&4$2-governmentinPakistanrestartedthe countryspolitical and economic engagementwith China fromthepointwheretheoutgoingPakistanPeoples Party%PPP-$ledgovernment hadleft it.0tthesametime(astherevised alignment of thecorridor( oreasternalignment which willbediscussed at length laterinthereport( willnotrunthroughmostpartsofBalochistanandations agenda %Pakistan$China 7nstitute( )*+-.:hilecooperationamongallcountriesintheregion(atleastintermsoftrade and economy(wouldbean idealscenariowith changingregionaldynamics(there is a stronglikelihoodthatpersistingbilateralconflictsandanenvironmentofmistrustwillkeep them polari>edandpartofallianceswherePakistan wouldcertainlyremaincloserto China(withemergingregionaldynamicshavinglittle impacton the constructionoftheCP8Candfunctioning of the?wadar Port.Butit stillremains tobeseenwhetherornotthe CP8Cand?wadarcouldbecomeinstrumental inforgingandenhancingregionalcoordinationandcooperation(althoughtheyaredesigned to haveregional connectivity with7ndiaand0fghanistan.!. "ecurity-related threats/herearecertainlysecurity$relatedthreatslinkedtotheChina$Pakistan8conomicCorridorandwhilemostmightori gi nat einPakistan(theBinjiangprovinceinwesternChinaisalsofacingsecuritythreatsfrom.ighur militants andthe8ast/urkestan 7slamic&ovement %8/7&-..ighurand8/7&militants havelong sought shelter inPakistans tribalareasalongwiththelocalmilitants.@owever(Pakistanssecurityforceshave foughtforeign militants in2orth:a>iristan 0gencyincluding 8/7&and.ighursinrecentmonths with thecommencementofthemilitaryoperationJarb$e$0>bwhichhas alsoweakenedthe operationalcapacityof8/7&%ens(workersandengineersinpast./he.ighur militantslinkswith the/aliban in'0/0posea majorthreat toChinese interests inPakistan.0n.>bek$speakingmilitantleader&ufti0buJaral$Burmirecentlyreleasedavideomessage directingall/aliban groups tocarryoutattacksonChinese embassies andcompanies andkidnap orkillChinese nationals%Iehman()*+-./hesecondsourceofthreattosecuritycouldbeBalochinsurgent groups whoareagainst mega development projects inBalochistan(including?wadarPortcurrentlybeingdevelopedbyChinese companies./hirdly(themilitant$criminalnexusincertainareasalsoposesathreattoChineseengineers(workersandciti>ensintheformofkidnappingandrobberies.7nthepast(therehavebeenmanyincidentsofkidnappingandkillingsof Chinese citi>ens working andlivingin Pakistan./hispartofthereportdiscussesthenatureandlevelofpotentialsecuritythreatstothe China$Pakistan8conomicCorridor(whichcanappearindifferentpartsofPakistaninformofprotractedviolence(terroristattacks(kidnappingandcriminalactivities./hethreatassessmentfordifferentregions1throughwhich the CP8Cwillpass1isbased onthefre=uencyofterrorist attacksreported fromtheseareasoverthepastfew years(andalsothepresence of militant( insurgent andcriminal groups in thoseregions.#. Geogra$hy o% the CPEC/heCP8Cisahugeprojectthatwillundertakethe constructionofhighwayandrailwaylinksrunningthroughmostofPakistanstartingfrom?wadar inBalochistan andculminating inar Baloch(is predominantlyfocused inthesoutherncoastal&akranbeltalthoughitoperatesacross Balochistan./hegrouprepresentsdisgruntledmiddle$classandlowermiddle$classBalochyouths./he4BledbyJaved&engalisconcentratedinsouth$westerndistrictsofBalochistan%Panjgur(?wadar(iristan havebeendestroyed. /hiswillcertainly reduce security threats fortheCP8Cprojectemanatingfrom'0/0.0sfarasBalochistanisconcerned(theprovinceisalreadyunderstrictsecurity scrutinyinthepresenceof the 'rontierConstabulary(policeand4evies.7nrecentmonths(attacksbynationalistinsurgentsandmilitantshavedecreased./hestatessecurityapparatus in Balochistan( if utili>ed effectively(is capable to deteranythreats to CP8C$linked projectsandactivities.@owever( thereis animmediate needtoaddress security problems in