CPEC | Global Trade Impact

China-Pakistan Economic Corridor (CPEC) is a massive infrastructure that includes roads, pipelines, and railways, those will pass through the entire length of Pakistan which includes KPK, Azad Kashmir (PoK), Punjab, and Baluchistan. CPEC will shrink the distance for Chinese goods bound for Europe, Africa, and the whole western hemisphere, substantially by almost 3000 km/13,000 km and vice versa. Goods trade by CPEC will not only provide safe route but also avoide the unsafe Strait of Malacca in Southeast Asia by many km. CPEC has global trade implications, for example, if the Chinese ships were to be unloaded at New York rather than California, it would travel less by two thousand miles through the Suez Canal route. There is also an existence of anticipation that when the CPEC is completed, a reduction in the voyage of merchandises from the western hemisphere may also become the same distance route and compete with the Panama Canal.

Consequently, CPEC has global trade implications, and even if Northwestern Indian states use the port of Gwadar to do business, it would be cheaper and quicker through the corridor. You never know, it could be possible because precedence exists for the use of Fazilka-Amruka-Bahawalpur route was known as "The Golden Route" before 1947.

Whereas, there are undeniable facts that, there are some other geopolitical considerations with multiple competing political interests relating to CPEC. About a 120 km west of Gwadar, the Iranian port of Chahbahar was built by Pakistan's rival India to bypass Pakistan to reach its interests in Afghanistan in the early nineties. Despite US and EU pressure, India conducts a trade of about 15 billion dollars with Iran and imports about 15% of its oil needs from Iran as India is the world's fourth largest consumer of petroleum. Furthermore, India is building the railway links from Chahbahar to connect to the Iranian Railway to tap the mineral-rich Afghanistan and to reach the Central Asian markets.

While these regional dynamics seem to have threatened Indians as if the Chinese were encircling them. Pakistan also feels surrounded by India, while Indians are extending the Iranian railway into the mineral-rich Afghanistan. India also hopes to increase their commercial and strategic interests in the former Soviet Central Asian Republics (CARs) through Afghanistan.

While troublesome for a few, many countries are observing the CPEC with interest. Recently, Pakistan's President welcomed the wish of Central Asian states to join CPEC. Even Russia, which has had a cooled relationship with Pakistan, is now warming up and has shown interest into the economic corridor, besides building Karachi to Lahore gas pipeline.

With the possible inclusion of these new states in the deal, the possibility of CPEC becomes more tangible and resilient. However, for Pakistan, Iran's inclusion in the deal will increase and multiply the corridor's advantages. For this reason, Islamabad extended an invitation to Tehran, which Iran has agreed to consider.