CPEC Phase II and Beyond; Changing South Asia

CPEC Phase II:

The China-Pakistan Economic Corridor has completed its first decade and entered into phase II in the country. Its Phase ii comprises massive industrialization, building of numerous special economic free zones, social development, revitalization of railways transport system (ML-I), agriculture cooperation, health, culture and education cooperation, growth of renewables (wind, solar) and above all increasing of human capital enabling us to achieve the desired goals of socio-economic prosperity, eradication of poverty, generation of new jobs, earning of foreign reserves through more and more production and its subsequent exports in the days to come. It is predicted that the completion of these mega projects would be instrumental for the quick revival of our macro-economy and would also stimulate prospects of greater trans-regional connectivity.

Geopolitics of South Asia and CPEC:

On the other hand, it fears that the complex and complicated geo-economic and geopolitics of South Asia will also affect the pace and effectiveness of the CPEC Phase-II. The imminent political and electioneering trans-regional spillover repercussions of India’s upcoming elections in 2024, the immense economic rise of India, military alliance with the USA, geographical maneuverings in Nepal, Bhutan, and Maldives, proxies in Afghanistan, Iran, and even in Central Asia would directly or indirectly affect the execution, implementation, and completion of the CPEC Phase-II in the country.

Despite China’s close economic ties and political guidance to the interim set-up of the Taliban, the law and order situation has already increased cross-border firing and infiltration incidents in the country. Moreover, the massive repatriation of illegal Afghan refugees has serious security risks and resultantly faulty lines have already surfaced in the shape of terrorism menace in the country.

Hydro Hegemony Policy: 

Moreover, Afghanistan’s hydro hegemony policy has irked its six neighbors which are heavily dependent on the country’s water resources. The construction of the Qosh Tepa Irrigation Canal, which will divert large volumes of water from the dwindling transboundary Amu Darya River will badly affect Uzbekistan, Turkmenistan, and many other regional countries thus dreams of trans-regional connectivity will be compressed and comprised.

In addition to this, the reemergence of terrorism and an increase in suicidal attacks in the country would jeopardize economic prosperity, political instability, social harmony, and ethnic comfort-zoning in the country again Balochistan, KPK, and some parts of even Punjab areas would be in the line of fire because of anti-human and anti-development forces in the region.

These forces of darkness have foreign linkages and sponsorship to launch a new hybrid war against Pakistan and of course our strategic assets like CPEC, China-Pakistan friendship, and last but not least, economic sovereignty which needs to be rectified through joint and sincere efforts at every level from top to bottom because peace, prosperity and national dignity is at stake.

IMEC will be a challenge for CPEC?

Moreover, the building of numerous economic/transport corridors would also affect the CPEC Phase II. At the G20 summit, President Joe Biden announced that India, Saudi Arabia, and the United Arab Emirates (UAE), together with Israel, France, Germany, Italy, and the US, want to create an ‘India, Middle East-Europe Corridor’ (IMEC).

According to various sources, this rail and shipping route would include advanced fiber optics, clean hydrogen pipelines, and economic zones stretching from India, through the UAE, Saudi Arabia, Jordan, and Israel, to Piraeus Port in Greece. It would be the first giant step to fire up normalization with Saudi Arabia a diplomatic effort integral to US strategy in the Middle East.

Furthermore, Israel’s National Security Adviser, Tzachi Hanegbi, called the corridor “the most meaningful evidence” that both sides are moving from ‘a shot in the dark’ towards meaningful efforts to normalize relations between the two countries. However, ongoing Israel-Palestine or Israel-Hamas war has somehow delayed pace of Israel-Saudi normalization.

To achieve this strategic goal, the Biden administration has been pushing for a deal as part of a broader plan to contain Iran and check China’s expanding influence in the Middle East (A Beijing-brokered deal to restore Saudi-Iran diplomatic ties, announced in March, was a wake-up call for Washington).

Middle Eastern Geo-Economic landscape: 

The US plan aims to reshape the Middle East’s geo-economic landscape through connectivity projects like IMEC, helping to alleviate Gulf countries’ doubts about its commitment, reduce tensions with Iran and bolster its leadership in the Gulf. The corridor would complement other coalitions of friendly powers such as the India-UAE-Israel-US I2U2 and the G7-led Partnership  for Global Infrastructure and Investment seen as a rival China’s Belt and Road Initiative (BRI).

In summary, the policy makers of Pakistan and China should take all possible measures to ensure safety and security of the Chinese workers and CPEC projects in the country because emerging socio-economic, geopolitical and geostrategic war mongering would create serious hurdles for the projects of CPEC Phase-II in the country.

The joint hybrid security system would be pursued and implemented. Moreover, all pending deferred payments of the Chinese companies may also be resolved. The hangover of Pakistani bureaucratic model must be transformed for the early initiation, sanction, approval, implementation and completion of the CPEC Projects in the country.


Regional proxies have already hostage Pakistan, peace, stability, prosperity and harmony which should be handled with open eyes without creating unnecessary war hysteria through options of diplomacy, dialogue, dialogue and determination with all regional stakeholders convincing them that greater trans-regional connectivity would be game and fate changers for the whole South Asia in the days to come. The policy makers should activate rigorous economic diplomacy with Iran, UAE, and Saudi Arabia to sustain trans-regional utility and productivity of the CPEC.


The CPEC Phase-II would catalyst regional connectivity through the completion of ML-1, Gwadar seaport and even building of Sino-Pak Air Corridor between Gilgit Baltistan and Tashkurgan which must be pursued.

The policy makers should also accelerate the implementation of the Quadrilateral Traffic in Transit Agreement (QTTA) to build sustainable trade linkages with China, Pakistan, Kyrgyzstan and Kazakhstan. It is good omen that the first cargo assignment has been dispatched and reached to Kazakhstan by bypassing Afghanistan which has now provided an alternative route for regional connectivity and bilateral trade between Pakistan and Central Asian countries.

The CPEC further connectivity with Xinjiang region would be game changer in further enhancing the prospects of trans-regional connectivity between Pakistan and Central Asian countries in the days to come.

There is an urgent need to include projects of hydrogen power generation, lithium & sand batteries, hybrid agriculture, health cooperation, artificial intelligence development, re-allocation of higher industries in SEZs, transfer of technologies of wind & solar panels, disaster management capacity and last but not least, green transformation to combat climate change in the country.

The snakes of geopolitics are ready to create another game and end game theories in South Asia which may be avoided through rigorous economic sustainability, trans-regional connectivity, digitalization, diversification of economy, modernization and complete activation of the SIFC in the country. The Sino-Pak friendship is the natural balancing act in the region to mitigate schemes of imperialism and hegemony which should not be weakened for sake of personal linkages with others.

This Article is written by Dr Mehmood Ul Hassan Khan

Executive Director: The Center for South & International Studies (CSAIS) Islamabad

Regional Expert: China, CPEC & BRI 

China BRI

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