By Dr M Amanullah & Muhammad Usman Khan
China has undertaken the One Belt-One Road (OBOR), which is the path for increased connectivity through diplomacy, trade and economic cooperation. While global trade talks have stagnated, China seeks new trade routes and refurbishes old ones, helping developing countries restore physical and human infrastructure.
In this emerging dynamics of a post-globalisation world, China is the adhesive that is resuscitating ancient trade routes, including more countries and regions, honing each country’s comparative advantage, promoting mutual interests, and setting an example for cooperation.
Joseph Nye’s concept of ‘soft power’ is most applicable to China today winning hearts and minds, people and communities through an interwoven route, the Silk Road. Pakistan has embraced the historic Initiative wholeheartedly. The China-Pakistan Economic Corridor (CPEC) is an unprecedented package of co-operation and development.
It is reshaping the geo-economic landscape and will prove to be a game-changer not only for Pakistan but the entire region. Never have investments through a bilateral cooperation framework been done with such speed and effectiveness.
Pakistan’s industrial sector
CPEC provides the industrial sector of Pakistan with an opportunity to modernise and become more efficient and competitive. Various energy projects, coupled with improvements in infrastructure and road networks, would help address some of the key constraints to growth. More importantly, the development of Special Economic Zones (SEZs) would enable industries to smoothen supply chains, enhance collaboration and innovation capabilities, and help reap significant economies of scale.
However, this process will take time to materialise, and the nature of its trajectory would depend, at least in a short to medium term, on two main factors: 1. how the industrial transformation currently under way in China creates potential opportunities for Pakistan; and (2) how prepared Pakistan’s economy is to take advantage of this opportunity.