As Pakistan navigates its challenges and emerges from diplomatic isolation, the Shehbaz Sharif government now seeks to convert economic stabilisation into inclusive growth to rebuild its political base.
Achieving this requires substantial investment in job-creating sectors like agriculture and industry, hence the plan to launch Phase II of the China-Pakistan Economic Corridor (CPEC) later this month in Beijing.
Official sources also said the prime minister will travel to Beijing at the end of this month to attend the Shanghai Cooperation Organisation (SCO) summit. Furthermore, he is expected to attend the Pak-China B2B Investment Conference.
According to media reports, preparations for the visit were discussed during Chinese Foreign Minister Wang Yi’s trip to Pakistan last week for the 6th Strategic Dialogue, where both sides reaffirmed their commitment to the high-quality development of the upgraded China-Pakistan Economic Corridor.
Without a clear roadmap, strong inter-departmental coordination, sustained security assurance and funding clarity, the reboot of CPEC Phase II may meet the same success as past efforts
This would, however, mark yet another relaunch of ‘CPEC 2.0’, which has already been announced multiple times over the past six years. It was first unveiled in April 2019 by then prime minister Imran Khan at the 2nd Belt and Road Forum in Beijing, with a focus on industrial and agricultural cooperation and socio-economic development.
It was then relaunched in July 2021 with renewed emphasis on Special Economic Zones (SEZs) and agriculture modernisation, and again in November 2022 by PM Shebaz Sharif during his 1st term in Beijing, where both nations agreed to revive momentum on key projects such as Gwadar Port, the ML-1 railway and SEZs.
However, earlier efforts failed to yield sustained progress due to a variety of reasons, including the pandemic, political instability, economic crises and persistent security challenges.
There are several elements creating a more conducive investment climate, but the success of Marka-e-Haq and Pakistan’s renewed recognition as a close ally by the US have shifted the tide, says Dr Ahmed
Now, Haroon Akhtar, Special Advisor to the Prime Minister on Industries and Production, has expressed confidence, citing a shifting global landscape that he believes currently favours Pakistan.
“With macroeconomic indicators stabilising, the time is right to inject fresh momentum into CPEC. The prime minister is visiting China for the SCO summit, but many business-to-business meetings are planned on the sidelines. There is a strong appetite on both sides to advance to the next phase of CPEC, especially as world trade dynamics continue to evolve rapidly,” he noted.
Another member of the economic team, speaking off the record, pointed to both internal and external factors aligning to accelerate progress on CPEC. “There are several elements creating a more conducive investment climate in Pakistan, but I believe the success of ‘Marka-i-Haq’ and Pakistan’s renewed recognition as a close ally by the US have shifted the tide. This has opened up greater space for the government to pursue its economic targets with support from its most dependable partner,” he observed.
Probably overwhelmed by the pace of global developments and preoccupied with recalibrating business strategies to navigate new challenges and seize emerging opportunities, business tycoons chose to stay silent on an issue that could spark controversy. “At a time when uncertainty is the only certainty, it’s wiser to avoid the risk of appearing overly aligned with either the East or the West. Besides, we already have more on our plates than we can chew,” a senior business leader remarked privately.
“Bulls are raging in the capital market. Pakistan’s credit ratings are being upgraded by agencies like Moody’s and Fitch, the government is celebrating its economic management, the US is easing additional tariffs, and China appears committed to continued support, yet I feel low. Why isn’t my business picking up?” remarked a CEO anonymously. “I am too busy trying to solve this riddle to risk upsetting anyone right now.”
Abdul Aleem, Secretary General, Overseas Investors Chamber of Commerce and Industry, shared his perspective: “We believe there is growing recognition, particularly on Pakistan’s side, of the need to capitalise on the economic and investment opportunities CPEC offers. With regional economic and political dynamics evolving, CPEC presents a valuable window of opportunity for both countries. Pakistan needs investment in large-scale manufacturing and infrastructure to boost exports, while China may view Pakistan as a strategic regional partner for relocating some of its mature industries.”
Experts generally expressed cautious optimism. They noted that without a clear roadmap, concrete targets, strong inter-departmental coordination, sustained security assurance and funding clarity, this latest ‘relaunch’ risks becoming the fourth rhetorical reboot of CPEC Phase II. “The difference lies not in intent, but in the sustained execution of the plan,” remarked an official who was previously part of the CPEC team in Islamabad.
Dr Manzoor Ahmed, Pakistan’s former World Trade Organisation representative, outlined several factors that could improve outcomes this time, including greater political stability, recognition of CPEC as the primary investment driver, stronger forex reserves and a favourable US tariff deal.
Reflecting on the past setbacks during the PMLN tenure, Dr Ahmed cited political instability, default fears, uncertainty around Trump’s stance, budget pressures and regional tensions as major distractions. “The environment has now improved, allowing the government to focus on achieving 4–5pc growth over the next two years,” he noted, nevertheless.
Published in Dawn, The Business and Finance Weekly, August 25th, 2025
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