2023 has emerged with new hopes and challenges for the China-Pakistan Economic Corridor (CPEC) in the backdrop of uncapping China’s zero covid policy, fresh commitments to pump up more Chinese investment, the rollout of new three CPEC corridors, resumption of cultural exchange programmes, galvanisation of the China Pakistan free trade agreement (phase I and phase II), catalysing Gwadar as a logistic powerhouse, activation of Special Economic Zones, Pakistan’s economic turbulence, security hazards and global evil eyes on Sino-Pak relations. CPEC is all set to take centre stage after 72 years of Pak-China diplomatic relations. After Pakistan Premier Shehbaz Sharif’s Beijing visit and meeting with President Xi Jinping in 2022, it is highly likely of frequent high-profile exchanges of visits between Chinese top dignitaries and Pakistan’s eminent decision-makers in 2023. A total of 36 more CPEC projects, with a projected expenditure of $27.5 billion, are in the works and it is believed that many of them will cross the finish line during 2023. According to information from the energy sector, 11 projects totalling $12 billion in investment have already been finished, while four additional projects totalling $6 billion in investment are now undergoing implementation and are anticipated to be finished soon. In the infrastructure sector, seven projects totalling $6.7 billion in investment have already been finished. Six additional projects totalling $0.9 billion will be finished in coming years, and 12 projects totalling $10.4 billion are anticipated to be finished as per their set deadlines from 2023 to 2030. Similarly, in Gwadar, where three $200 million projects have already been finished, two $230 million projects will be finished in the years ahead and two more $150 million projects will be finished by their culmination period. Moreover, five Special Economic Zones (SEZs) will make tangible headways in 2023 with an investment of $1 billion. Four of the nine identified Special Economic Zones (SEZs) would be completed in the coming years with an expenditure of $500 million. Six socioeconomic projects totalling $10 million have so far been completed; 11 projects totalling $90 million will be finished by 2025, and 10 projects totalling $900 million will be finished by 2030. The good news is that 27 projects worth $19 billion have so far been completed under the China-Pakistan Economic Corridor (CPEC) while 63 more projects with an investment of $35.2 billion are scheduled to be completed in coming years. 2023 also marks the beginning of the CPEC-Collaborative Research Grant (CPEC-CRG) which is one of the key components of the recently launched HEC initiative namely “Academic Collaboration under CPEC Consortium of Universities”. The overall objective of the said project is to understand and respond to the historic global geo-strategic and geo-economic transition and its impact on the region in general and Pakistan in particular, keeping in view the broad Chinese Belt and Road Initiative and its Pakistan-specific component—CPEC.

The collaboration of Pakistan and China on education and cultural cooperation and exchanges witnessed an upward trajectory with each passing day, as thousands of Pakistani students are currently studying in various universities in China. Similarly, exhibitions and Chinese cultural events in Pakistan are expected to increase further in 2023. This academic and cultural cooperation will further strengthen the bonding between the two brotherly countries. While briefing Pakistani media about the 2023 Happy Chinese New Year and upcoming events in connection with the celebrations of the Chinese Spring Festival, Xing Lijun, Second Secretary, Cultural Office of the Chinese Embassy in Pakistan told the media that The Chinese government is expected to resume the cultural exchange programs in 2023 after it relaxed COVID-19 restrictions at home. Similarly, a currency agreement between both nations is not only an economic masterstroke but is also tipped as a strategic move. It is hoped that, in 2023, Pakistan’s dependence on the dollar will decrease, as the central banks of Pakistan and China have signed a memorandum of understanding (MoU) to establish yuan clearing mechanisms.

Despite tough economic challenges, China remained at the top of the list of top foreign direct investors in Pakistan. The COVID-19 outbreak and the shift in Pakistan’s government both caused a slowdown in the CPEC. But those barriers are no longer present and work on CPEC is expected to pick up pace in 2023 in terms of China FDI in Pakistan. The second phase of the CPEC has broadened its scope to include collaboration on projects related to socioeconomic development, education, tourism, industry, oil and gas, research, and technology. Since China Pakistan Free Trade Agreement phase II and phase II are in full-on operation, 2023 will see new depth in the Pak-China trade landscape offering spiral leverage to Pakistan so that Pakistan can increase its export to China to cure its economic imbalances and development trajectory. A recent study conducted by the CPEC Centre of Excellence, Ministry of Planning, Development and Reform of Pakistan showed that indirectly, CPEC could help create even 1.2 million jobs under its presently agreed projects.