The launch of CPEC Phase II reflects one of the most important economic transformations in the recent development of the country in Pakistan. The first phase of the China-Pakistan Economic Corridor was mostly about energy sources, road networks, highways, ports, and transportation infrastructure developments; the second phase will shift the attention towards a more ambitious goal of industrialisation, export competitiveness, technology transfer, agricultural modernisation and sustainable growth in Pakistan. It is crucial as Pakistan’s long-term economic problem is never just about a lack of roads or electricity, but about the weakness of its productive base, the lack of value-added exports, low level of industrial diversification and the reliance on imports. Structural problems are directly addressed in CPEC Phase II through incentivizing manufacturing, Special Economic Zones, innovation, green technologies, regional trade connectivity etc.

The focus of CPEC Phase II on moving from the creation of infrastructure to industrial usage is most promising. The first phase paved the way for economic activity in the region through the construction of highways, energy development and transport corridors. The second round aims to turn it into factories, jobs, exports and technology-based production. In this capacity, CPEC is no longer just a connectivity initiative, it’s turning into a policy on industrialization for Pakistan. This is an ambitious goal, as the number of SEZs grew from 7 to 44 by January 2026. These are not just slabs of land that are set aside for factories, but are meant to be centres of production, investment, skills development and export expansion throughout the country.

The CPEC Phase II has a national development character as evident from Special Economic Zones like Rashakai (Khyber Pakhtunkhwa), Allama Iqbal Industrial City (Punjab), Dhabeji (Sindh) and Bostan (Balochistan). Such zones can be used effectively to help to balance the regional economy by providing industrial opportunities outside the........

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