CPEC 2.0 to hail industrial phase

China-Pakistan ties are set to enter the 75th anniversary of diplomatic relations in 2026 with a renewed push to advance CPEC 2.0, centred on five pillars: growth, livelihood, innovation, green development and openness, speakers said at a seminar on economic diplomacy organised by the Economic Diplomacy Forum.

Addressing the gathering, Chinese Consul General Yang Yundong described the upcoming anniversary as both a milestone and a new starting point for deepening bilateral cooperation. He said the China-Pakistan Economic Corridor, a flagship Belt and Road Initiative project, had entered its second decade at a critical stage, shifting from large-scale infrastructure to industrial cooperation, sustainable development and people-centred initiatives. Yang said the upgraded framework aimed to transform the corridor into a platform that delivers tangible economic outcomes while strengthening connectivity and investment flows. He noted that Gwadar Port was accelerating its transformation into a regional logistics hub, while record volumes of trade and travel through the Karakoram Highway and Khunjerab Pass reflected growing economic integration between the two countries.

Highlighting the five pillars of CPEC 2.0, he said the corridor of growth would focus on industrial expansion and trade facilitation; the corridor of livelihood would prioritise social development and community-focused projects; the corridor of innovation would promote digital cooperation, technology transfer and industrial upgrading; the corridor of green development would expand renewable energy and environmentally sustainable projects; and the corridor of openness would enhance connectivity and economic integration with regional and global markets.

He added that CPEC projects had directly and indirectly created over 240,000 jobs in Pakistan, while vocational training, healthcare and clean drinking water initiatives were improving living standards in local communities. China, he said, remained committed to multilateralism, economic openness and inclusive globalisation, warning that tariff wars and rising protectionism were disrupting global supply chains and increasing economic uncertainty for developing countries.

Dr Muhammad Farooq Afzal said economic diplomacy had become a central instrument for attracting FDI, strengthening manufacturing capacity and integrating Pakistan into global value chains. He said diplomacy today must translate into capital inflows, technology transfer and industrial development rather than remaining limited to formal agreements. He noted that trade between Pakistan and China reached $25.2 billion in 2025, reflecting nearly 10% year-on-year growth, while Pakistan's exports to China were estimated at around $2.8 billion. These figures, he said, demonstrated both the depth of the economic relationship and the untapped potential for export diversification and value-added manufacturing.

Dr Afzal said the next phase of CPEC would prioritise special economic zones, export-oriented industries, joint ventures and industrial clusters, offering investors fiscal incentives, strategic connectivity and access to regional markets spanning South Asia, Central Asia and the Middle East. He added that sectors such as textiles with higher value addition, engineering goods, agribusiness, pharmaceuticals, information technology and renewable energy offered significant potential for bilateral cooperation.

He stressed that Pakistan's young workforce, geographic location and improving infrastructure could help position the country as a regional manufacturing hub, provided policies remained consistent and investment frameworks predictable. The Economic Diplomacy Forum, he said, aimed to bridge diplomacy and business by facilitating dialogue between investors and policymakers and promoting commercially viable projects.