Islamabad, August 25, 2025 — Pakistan is preparing to launch the second phase of the China–Pakistan Economic Corridor (CPEC–II), signaling a renewed commitment to its long-standing strategic partnership with Beijing. The announcement comes ahead of Prime Minister Shehbaz Sharif’s scheduled visit to China later this month, where new agreements are expected to be finalized.
CPEC–II: A New Phase of Cooperation
The first phase of CPEC, launched in 2015, focused primarily on infrastructure projects, including highways, energy plants, and Gwadar Port development. With many of those projects either completed or in advanced stages, CPEC–II will emphasize industrial cooperation, agriculture modernization, digital connectivity, and renewable energy projects.
Government officials have stated that this new phase will particularly prioritize Special Economic Zones (SEZs), aimed at boosting industrial growth and creating jobs, while also improving Pakistan’s export potential. Investments in green energy projects such as solar and wind power are also expected to feature prominently, reflecting a shift toward sustainability.
Strategic Balancing in a Global Context
The launch of CPEC–II comes at a time of heightened global geopolitical competition, particularly between the United States and China. While Washington has sought to strengthen ties with Islamabad in areas like trade and counterterrorism, Pakistan’s reliance on Chinese financing and infrastructure support makes a complete pivot unlikely.
Analysts believe Islamabad will attempt to maintain a delicate balancing act, continuing its security and diplomatic engagement with the U.S. while deepening its economic and strategic alignment with China. For Pakistan, the challenge lies in securing maximum benefits from both partnerships without alienating either side.
Economic Hopes and Concerns
Supporters of CPEC–II argue that it could provide a much-needed boost to Pakistan’s struggling economy. With inflation and unemployment remaining key concerns, large-scale Chinese investments in industry and agriculture are seen as opportunities to stimulate growth.
However, critics have raised concerns about debt sustainability, transparency, and sovereignty. Pakistan already carries significant financial obligations from the first phase of CPEC, and opposition voices have warned that further borrowing could deepen economic dependence on Beijing.
Gwadar Port and Regional Connectivity
Gwadar, the flagship project of CPEC, is expected to receive fresh attention in CPEC–II. Plans include upgrading port facilities, expanding road and rail links, and strengthening energy pipelines. These measures are designed to transform Gwadar into a major regional trade hub, linking Pakistan with Central Asia, the Middle East, and beyond.
The corridor also holds strategic importance for China, providing it with direct access to the Arabian Sea and reducing reliance on longer maritime routes through the Strait of Malacca.
Looking Ahead
As Pakistan prepares to unveil CPEC–II, the government has emphasized that the new phase will be more inclusive, transparent, and focused on long-term sustainability. Officials have also hinted at inviting third-party investors from the Middle East and Central Asia to diversify funding sources and reduce overreliance on Chinese loans.
With the official agreements expected during Prime Minister Sharif’s visit to Beijing, the coming weeks will be crucial in shaping the next chapter of Pakistan’s economic and strategic trajectory. For Pakistan, CPEC–II represents not just a continuation of a flagship project but a test of its ability to balance domestic needs with international realities
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