Author: Bushra Nizar

Length of paper (including abstract, tables and references): 5,239 words

Tables: 4 | Figures: 5

13 November 2026

Abstract

Purpose. The paper explores how the nature of the China–Pakistan relationship has changed over the seventy-five years of its existence and asks whether the China–Pakistan Economic Corridor (CPEC) is really a change from geostrategic to geo-economic or a re-branding of the old strategic agenda into economic terms.

Design/methodology/approach. A qualitative, theory-informed documentary design is used in the study. Twelve relevant peer-reviewed articles from the period 2018 to 2026 were identified from a structured search on Scopus, Web of Science, JSTOR and Google Scholar filtered with a set of explicit inclusion criteria. They were coded deductively on political, economic, social and technological dimensions, and an inductive code was also applied to capture data on geopolitical continuity. The results were triangulated across sources and analysed using Garlick’s (2018) concept of geo-positional balancing.

Findings. The geo-economic turn is real and tangible. Bilateral trade increased from USD 628 million in 1999 to USD 16.8 billion in 2017, while some USD 46 billion was pledged in 2015 and revised to USD 62 billion by 2017; and new institutions like the Joint Cooperation Committee and the CPEC Authority were not found in previous stages of the relationship. The turn is not, however, a substitution. Chinese planners quietly put aside the overland pipeline that provided the initial energy-security rationale, and put substantial effort into providing security for the most vulnerable nodes along the route. The four constraints most likely to influence whether or not the corridor’s economic promise is realised are debt exposure, insurgent violence in Balochistan, provincial inequity and environmental cost.

Originality/value. The paper provides a synthesis of seventy-five years of bilateral relations, periodised and based on evidence, and provides an explicit analytical approach in which the economic and the geopolitical motivations are complementary rather than competing explanations.

Keywords: China–Pakistan relations; Belt and Road Initiative; China–Pakistan Economic Corridor (CPEC); geo-economics; geopolitics; South Asia; documentary analysis

1. Introduction

1.1 Background

The ties between China and Pakistan are one of the most enduring relations in the modern world, having withstood changes of government, global shifts in power and a number of security crises (Hussain, Hussain, & Qambari, 2020).

The interesting thing about this relation is its change of nature. For several decades it was basically geostrategic, based on mutual aversion to India and propped up by relatively small military and financial aid rather than extensive commercial relations. Even in the 1990s, bilateral trade was a few hundred million dollars a year, which is very little considering the political significance that the two capitals attributed to each other.

However, that gap reduced significantly after the China–Pakistan Economic Corridor (CPEC) was announced in 2013 and formally inaugurated in April 2015 during President Xi Jinping’s visit to Islamabad, when China pledged a first-phase investment of USD 46 billion in the energy, transport and infrastructure sectors, which was later increased to USD 62 billion (Garlick, 2018; Hilali, 2019).

1.2 Problem statement and research gap

There is a significant amount of scholarship available on CPEC, though mostly scattered. One strand of research considers the corridor as an economic intervention in terms of its contributions to energy security and infrastructure in Pakistan (Ahmed, Ali, Kumar, Malik, & Memon, 2019; Surahio, Gu, Mahesar, & Soomro, 2022). A second view is that it is a geopolitical tool, with the economic element subordinate to China’s positioning in the Indian Ocean Region (Garlick, 2018; Hilali, 2019). The third explores the interface of CPEC with centre–periphery and federal dynamics within Pakistan (Boni & Adeney, 2020; Abb, 2023; Adeney & Boni, 2024; Zhang, 2026).

1.3 Research questions

The study has four questions:

RQ1. What was the nature of China–Pakistan relations from 1950, how did these relations evolve till 2000, and what factors influenced the relationship in the absence of any substantial economic interdependence?

RQ2. How exactly is CPEC important as a “turning point” and not just a continuation of the previous trajectories of cooperation?

RQ3. What political, economic, social and technological changes in the relationship does the published record of CPEC’s first decade verify?

RQ4. What are the most likely constraints in deciding the sustainability of the geo-economic reorientation?

2. Literature Review and Theoretical Framework

2.1 Scholarship on the bilateral relationship

There is an overlap between the periodisations of the different historical treatments. Hussain, Hussain and Qambari (2020) used the theory of complex interdependence and conclude that by the 1980s the two states had multiple channels of communication, with none having precedence within the hierarchy. Boni (2019) rightly points out that the Pakistani military has been the main source of institutional continuity throughout the post-9/11 period, including in the management of Gwadar and CPEC.

The most sobering is the federalism literature. Boni and Adeney (2020) demonstrate, based on fieldwork conducted in 2015, 2018 and 2019, that CPEC centralised power in Islamabad instead of devolving capacities to the provinces, and Adeney and Boni (2024) report that this trend has continued over the first decade of CPEC. However, outcomes are not to be interpreted as a top-down Chinese influence, as they have been altered by contestation between the centre and the peripheries in Pakistan. Based on over eighty interviews carried out between 2019 and 2024, Zhang (2026) situates the coordinating position in China’s National Development and Reform Commission (NDRC) and sketches a Chinese state-led development logic that is distinct from traditional foreign-aid paradigms, yet also shares some traits with them.

2.2 Complex interdependence as a descriptive lens

Here, the concept of complex interdependence, as applied by Hussain, Hussain and Qambari (2020), is helpful for description and not prediction. Its three markers, namely multiple channels of contact, no fixed hierarchy among issue-areas, and the reduced utility of force between the parties, are consistent with the relationship after the late 1970s. It fails, however, to account for why the economic channel remained narrow for so long and why it thickened when it did.

2.3 Geo-positional balancing

Garlick (2018) offers another lens. He examines the notion that a land route from Gwadar to Kashgar would mitigate China’s “Malacca Dilemma” and finds that, economically and geographically speaking, such a route is implausible. He then reveals that, by the end of 2017, Chinese planners had quietly set aside serious pipeline plans. What is left is geo-positional balancing: investment whose principal return is a durable Chinese presence in the Indian Ocean Region and a limit on Indian and United States freedom of action.

The notion debunks a false dichotomy. A corridor can be both economically important and geopolitically driven; the economic element is not a smokescreen. Khan and Guoqing (2023) arrive at a compatible conclusion, that China occupies a combined core and semi-periphery position in CPEC, where its development investment is joined with strategic interest.

2.4 Analytical framework

In this paper, CPEC is understood through a framework (Figure 1) that treats it as a fulcrum between three sets of drivers and four fields of change. The corridor is shaped by structural drivers, including Sino-Indian rivalry, Cold War alignments and China’s Belt and Road Initiative; domestic drivers such as the energy deficit, infrastructure gap and federal contestation; and institutional drivers such as the Joint Cooperation Committee, the CPEC Authority, NDRC coordination and military continuity. The corridor in turn generates political and institutional, economic, and social and technological change, while its geopolitical role remains.

Figure 1

Analytical matrix of the explanatory drivers, CPEC as a pivot and the four domains of change observed.

3. Research Methodology

3.1 Research design

The nature of the study is qualitative and interpretive, and the method used was a theory-guided documentary analysis of secondary scholarly sources. The research questions are historical and interpretive, and the relevant primary material, such as agreements and project contracts between the two parties and security arrangements, is difficult for outside researchers to access and therefore not suitable for testing hypotheses.

The design of this study is a single-case, longitudinal interpretive study, with the case being the relationship between China and Pakistan and the evidence base being the published scholarly record. The initial coding structure was provided by Garlick’s (2018) geo-positional balancing proposition and the PEST dimensions suggested by Surahio et al. (2022), and was adjusted according to the material. The design is summarised in Figure 2.

Figure 2

The research design of this study has four phases, namely corpus construction, screening and appraisal, thematic coding, and synthesis.

3.2 Data sources and search strategy

The sources were identified using the following string in Scopus, Web of Science, JSTOR and Google Scholar: (“China–Pakistan” OR “Sino-Pakistani”) AND (“Economic Corridor” OR “CPEC” OR “Belt and Road”) AND (geopolitic* OR geo-econom* OR “energy security” OR federalism OR “centre–periphery”). Only English-language materials were searched, during the period [month] to [month] 2026.

3.3 Evidence base

Twelve works were kept (Table 1). The method of the overall corpus, comprising a meta-analysis, two interview-based field studies, a framework-based assessment, a critical evaluation of local effects and a number of interpretive geopolitical studies, is deliberately heterogeneous, so that consistency across the corpus serves as a more robust basis for inference than consistency among studies that follow a single method.

Table 1

Composition of the core evidence base

3.4 Analytical procedure

The analysis was performed in two passes. In the first, each source was coded according to dimensions defined a priori from the PEST structure; in the second, an additional, inductively defined dimension, geopolitical persistence, was added, as strategic continuity was reported by a number of sources and could not be coded under the PEST dimensions. This fifth code supports the paper’s main argument and is reported in Section 6.4.

4. Historical Evolution of the Relationship, 1950–2000

4.1 Alignment out of necessity, 1950–1962

In 1950, Pakistan was the first Muslim nation to recognise the People’s Republic of China, and relations between the two countries were formalised in 1951 (Hussain, Hussain, & Qambari, 2020). The first decade was cool: Pakistan’s membership of the American-led SEATO and CENTO alliances put it on a collision course with Beijing, and border incidents in 1959 exacerbated the issue.

The rationale for the two states coming together was the decline of Sino-Indian relations over Tibet and the Sino-Indian border war of 1962, which made the main opponent of Beijing’s main opponent useful (Hussain, Hussain, & Qambari, 2020). From its inception, the alignment was derivative of a third relationship.

4.2 Consolidation, 1963–1979

Consolidation was rapid. The two states signed a border pact in March 1963 laying out the frontier between Chinese-controlled Xinjiang and Pakistani-controlled Gilgit-Baltistan, which New Delhi considers null and void. Diplomatically, China supported Pakistan in the war of 1965, and after the 1971 war China exercised its veto power in the Security Council in favour of Pakistan, while Washington provided limited support (Hussain, Hussain, & Qambari, 2020).

Economic cooperation was real, but instrumental. The first trade agreement was signed in 1963, and bilateral trade increased from approximately USD 18 million in 1960 to approximately USD 148 million in 1979. China provided interest-free loans, helped construct fertiliser factories and sugar mills and, most importantly, built the Karakoram Highway along with Pakistan from 1959 to 1979, which took over a thousand lives and paved the way for the later corridor (Garlick, 2018; Hussain, Hussain, & Qambari, 2020). Military supplies started in the mid-1960s, and nuclear-related cooperation started in the 1970s.

4.3 Multi-channel cooperation, 1980–1999

By the 1980s the relationship had become multi-faceted, characteristic of complex interdependence, and military force had become a non-starter between the two states (Hussain, Hussain, & Qambari, 2020). Economic integration nevertheless lagged, as trade increased from approximately USD 389 million in 1980 to USD 628 million in 1999, a small amount compared to Pakistan’s trade with other Asian economies.

The message of the time was clear. Pakistan saw China as a counterweight to India and a supplier of arms without American strings attached, while China saw Pakistan as a safe western neighbour, a link to the Islamic world and, as in Henry Kissinger’s secret visit in 1971, a conduit to the United States.

Table 2

Phases of China–Pakistan relations, 1950–2025

Figure 3

China’s bilateral trade with Pakistan, 1960–2018, on a logarithmic scale. Values are as reported by Hussain, Hussain and Qambari (2020).

There are two interesting aspects of Figure 3. During the peak years of the strategic relationship (1980–1999), trade expanded by some sixty per cent, which is close to stagnation in real terms. In addition, the steep rise in trade began after 1999, well before 2013, so the corridor did not create the commercial relationship but gave institutional form to an expansion already underway.

5. CPEC as a Turning Point

The journey towards economic institutionalisation began with the joint declaration signed by President Musharraf and President Hu Jintao in 2003 and the Free Trade Agreement (FTA) in 2006; however, progress remained incremental (Hilali, 2019).

The break came in 2013, when a corridor between the deep-water port of Gwadar on the Arabian Sea and Kashgar in Xinjiang was announced. CPEC was formally launched in April 2015 and presented as the flagship of the BRI and as a “game-changer” in Pakistan that would solve the energy crisis, replace the worn-out transportation system and speed up industrialisation through special economic zones (SEZs) (Garlick, 2018; Hilali, 2019; Surahio et al., 2022).

The makeup of the commitment (Figure 4) is telling. About USD 34 billion was allocated to energy and USD 12 billion to infrastructure, including over two dozen generation projects with a total capacity of some 17,000 megawatts as well as road, rail and fibre-optic works (Hilali, 2019). In other words, almost three-quarters of the pledge went towards the domestic electricity needs of Pakistan and not China’s transit needs.

Figure 4

Breakdown of the sectoral allocation of the CPEC pledge and the changes in the overall investment portfolio from 2015 to 2017.

What was unique about CPEC was that it was institutional as well as financial. Previously the partnership ran through project-specific assistance and defence agreements, while CPEC established a multi-sectoral partnership on commercial investment principles, underpinned by loans, joint ventures and mechanisms like the Joint Cooperation Committee, which is involved in resolving implementation disputes (Surahio et al., 2022). It was the first time that there was a standing economic framework for Chinese involvement in Pakistan.

However, the geopolitical framing was not overturned by the economic reframing. Garlick (2018) argues that the main justification, an overland pipeline and transport route as an alternative to the Malacca chokepoint, was so impractical that by the end of 2017 Chinese planners had given up on serious pipeline plans. The overland movement of oil across the Karakoram would cost more than sixteen times the tanker equivalent, and Gwadar, which had three berths for vessels up to 30,000 DWT in 2017, is far too small for the volumes implied.

If the explanation for the investment is impractical and the investment has nonetheless been made, this indicates that the investment is not really about what was promised; rather, according to Garlick, the return on the investment is presence itself.

6. Findings: From Strategic Alignment to Geo-Economic Connectivity

6.1 Political and institutional change

A civilian- and military-led CPEC Authority is unprecedented in the relationship (Surahio et al., 2022). Nor is there any precedent for Beijing’s participation in Pakistan’s internal distributive politics, through meetings of the Joint Cooperation Committee where federal and provincial government officials meet to divide up projects. A foreign state acting as a go-between among the levels of government of a host state is a new mode of involvement.

From China’s side, Zhang (2026) demonstrates how the NDRC formulated the bilateral agenda of CPEC in a state-led manner that does not necessarily take into account the situation on the ground. Though CPEC has the potential to correct the imbalance between provinces, Boni and Adeney (2020) conclude that it has actually been a centripetal force in the federation of Pakistan. The institutional change is real, but it is concentrative rather than devolutionary.

6.2 Economic change

The economic dimension is the most quantifiable. Trade volume, in the hundreds of millions of dollars until the 2000s, increased to USD 16.8 billion in 2017 and USD 16.1 billion in 2018, a twenty-five-fold increase in a span of twenty years (Hussain, Hussain, & Qambari, 2020). However, the increase in Pakistani exports to China has been small, and the growth has been mostly in Pakistani imports, resulting in a persistent and growing trade deficit.

Twenty-five “mega projects” have been funded by CPEC. By the early 2020s, the energy portfolio was largely complete, with the Sahiwal and Port Qasim coal plants alone producing more than twenty billion kilowatt-hours. The reorientation is materialised through the China–Pakistan Fibre Optic Project, the upgraded Karakoram Highway and the Peshawar–Karachi motorway, which employed some 9,800 workers (Ullah et al., 2021; Hilali, 2019).

There is disagreement on the employment impact. While official figures show direct job creation of around 75,000 by the early 2020s (Surahio et al., 2022), the local workforce may not be equipped with the necessary technical skills, and outsourcing and migrant labour absorb much of the benefit, as documented most starkly at Gwadar Port (Deng, Yeo, & Du, 2018, reviewed in Ullah et al., 2021).

The most evident economic outcome is energy security. Ahmed et al. (2019) identified 18 studies published from 2014 to 2018, of which 89 per cent concluded that the energy projects of CPEC will make significant contributions to Pakistan’s energy security. Using Spearman’s rank correlation on five recurring concerns, they found that economic burden was strongly and negatively correlated with energy security (ρ = −0.759, p < 0.001) and that completion delays were moderately and negatively correlated with it (ρ = −0.500, p = 0.035). The entire pattern is shown in Table 3 and Figure 5.

Table 3

Concerns reported in the CPEC energy-security literature and their association with energy-security outcomes

Figure 5

The number of studies (out of the 18 meta-analysed by Ahmed et al., 2019) in which each concern was identified.

The economic-burden correlation is the most important finding in this dimension because it reveals a trade-off intrinsic to the corridor’s design: energy security comes at a fiscal price, and this price undermines energy security.

6.3 Social and technological change

Social impacts run in two directions. There is an overall positive perception among locals of the development projects in the corridor, with reports of better connectivity and access to education and business, and the expansion of Gwadar Port has been linked to less social unrest in Balochistan (Ullah et al., 2021). However, the Baloch people have not received benefits commensurate with resource extraction, in-migration from other provinces has resulted in demographic change, and some scholars have termed CPEC a tool of internal colonisation (Ullah et al., 2021).

The technological record is mixed, as seen in Table 4. Railway and road quality improved between 2014 and 2019, with the railway ranking rising from 72nd to 47th and the road quality ranking from 75th to 70th in the world, whilst the innovation ranking deteriorated from 48th to 94th (Surahio et al., 2022).

Table 4

Movement in Pakistan’s governance, infrastructure and innovation indicators, 2014–2019

6.4 The persistence of the geopolitical dimension

The fifth, inductively derived code captures what the PEST dimensions miss: economic change has been added to the relationship, but it is not a replacement for the strategic core of the relationship. In terms of security provision, the Special Security Division (SSD), estimated at more than 12,000 personnel, protects Chinese nationals and corridor infrastructure (Surahio et al., 2022). States do not commit standing forces of this size to schemes valued primarily for their commercial return.

The investment trend points in the same direction. The allocation corresponds better to Garlick’s (2018) assessment that Beijing’s main goal is a “geo-positional foothold” in the Indian Ocean Region, constraining India and U.S. naval freedom of action, with most of the investment going into generation and transport within Pakistan and comparatively little into the pipeline links that would serve China’s stated energy interest. The facts reveal not a shift from strategic partnership to geo-economic connectivity, but an extension of the strategic partnership’s toolkit.

7. Discussion: Constraints on the Geo-Economic Turn

The corridor has produced a new form of relationship without displacing its function. The new form will live or die based on five constraints.

7.1 Debt exposure

Pakistan’s external debt increased from USD 60 billion in 2014 to USD 108 billion by 2019. The contribution of CPEC to the total lending is less than ten per cent, and it is on concessional rates of approximately 2.34 per cent over a repayment period of twenty years (Surahio et al., 2022); thus, the fiscal problem of Pakistan cannot be attributed to CPEC.

Nevertheless, there are two reasons to be concerned. Debt-financed infrastructure is coupled with a growing bilateral trade deficit, so Pakistan borrows in a currency it is unable to earn through the relationship; and the debt-to-equity conversion at Sri Lanka’s Hambantota Port is the reference point for all serious discussion of the risk of BRI loans (Garlick, 2018; Surahio et al., 2022). The meta-analytic finding in Section 6.2 gives this concern an empirical rather than just an inferential basis.

7.2 Security threats

Security is likely to be the binding constraint in the near to medium term. The most symbolic points of the corridor have been targeted by the Balochistan Liberation Army (BLA) and other separatist groups, as in the attack on the Chinese consulate in Karachi in 2018 and on a hotel in Gwadar in 2019, and in September 2016 forty-four Pakistanis working on CPEC projects were killed (Ullah et al., 2021).

In the early 2020s, Chinese interviewees reported a lack of security outside their compounds and little preparation for local security or culture (Surahio et al., 2022), and security threats were found in 38.9 per cent of the studies reviewed by Ahmed et al. (2019), second only to provincial conflict. The two go hand in hand, the security issue being largely a symptom of the distributive issue raised below.

7.3 Provincial inequity

Various studies report claims that the corridor’s route was manipulated in favour of Punjab at the cost of Khyber Pakhtunkhwa and Balochistan, exacerbating Baloch and Pashtun grievances over resource extraction without benefit (Ullah et al., 2021); the federalism literature further finds that the distribution of projects is persistently skewed and management increasingly centralised (Boni & Adeney, 2020; Adeney & Boni, 2024). There is also a skills mismatch: because local populations lack the necessary skills, sponsors hire from outside the region, creating the very situation that these populations deplore and turning an economic issue into a political one.

7.4 Environmental and public-health cost

Seasonal smog has been attributed to the coal complex at Thar, which makes a major contribution to CPEC generation, with pollution levels and hospital admissions increasing in Sindh and Punjab (Ullah et al., 2021). In a country where the environmental regulatory framework is relatively weak, construction has also cleared over 54,000 trees in several northern districts, which has hurt the habitat of endangered species such as the markhor and the snow leopard.

7.5 The structural limits of the transit premise

Lastly, the corridor’s original transit concept is complicated by extreme topography, the expense of any high-altitude pipeline, an area that is disputed by India, and a port that is far too small for the large-scale hydrocarbon transshipment that might be envisaged (Garlick, 2018). Its grand transit plans are likely to continue to fall short of public expectations, even as smaller energy and transport projects are realised.

8. Conclusion

8.1 Answers to the research questions

On RQ1, the relationship between 1950 and 2000 was driven by a third party. It was established as a result of the Sino-Indian split, was maintained because of Pakistan’s importance as a counter to India, and developed multiple avenues of contact without much substantive trade: trade rose from USD 18 million in 1960 to USD 628 million in 1999, a volume not commensurate with the relationship’s political significance.

On RQ2, CPEC is a pivot point in both magnitude and nature, if not a clean break. The novelty lies in the commercial-investment architecture, the institutionalised bilateral relations and China’s participation in the domestic distributive politics of Pakistan. What is familiar, however, is the strategic rationale, and the corridor itself was constructed on foundations laid 40 years earlier for strategic purposes, first and foremost the Karakoram Highway.

On RQ3, there is evidence of a significant shift in all four coded dimensions, with qualifications for each. Trade increased about twenty-five-fold, albeit asymmetrically. Several tens of billions of dollars were spent on energy and transport, all on debt, with fiscal costs that are negatively correlated with the energy security being bought. Transport indicators improved, while the innovation ranking dropped from 48th to 94th. Positive perceptions of corridor infrastructure go hand in hand with longstanding complaints about who benefits.

On RQ4, debt, security, provincial equity and environmental cost are not parallel constraints; each depends on the others. Provincial inequity drives insurgent violence, which in turn increases security costs; security costs increase the corridor’s effective price, which aggravates the debt problem, the strongest negative correlate of energy security identified in the meta-analysis.

8.2 Implications

The idea of having to choose between geo-economics and geopolitics is a flawed one, at least in the case of the corridor. Geo-economic connectivity is the key means of achieving older strategic goals: Pakistan’s desire for a counterweight to India and for investment without Western strings attached, and China’s desire for a lasting presence in the Indian Ocean and to prove that the Belt and Road works.

For Islamabad, provincial equity is not something to be addressed downstream of delivery; as the evidence presented here shows, it is upstream of the security costs that pose the greatest threat to delivery. Transparent province-level reporting of project allocation and local employment, with technical training linked to project pipelines in Balochistan and Khyber Pakhtunkhwa, would address both the distributive and the skills issues at a far lower cost than the current level of security provision.

8.3 Directions for further research

Three areas call for further exploration. The trade series in the scholarly corpus extends only to 2018, so continuing it to the present, with imports and exports differentiated, would make it possible to determine whether the deficit has persisted. Comparing official job creation with local employment at the project level would answer a question that aggregate figures cannot. Finally, the pattern found here should be tested on other BRI corridors, as one case supports analytical but not statistical generalisation.

The issue for the next phase of the relationship is not whether China and Pakistan will continue to be strategically aligned; that seems settled. The question is whether the geo-economic instruments that bind them can be turned toward development that is broad-based, fiscally sustainable and acceptable to the provinces that absorb the bulk of the corridor’s costs.

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Prof. Engr. Zamir Ahmed Awan 全球丝绸之路研究联盟创始人兼主席

Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…