Routes as Value: China-Pakistan Economic Corridor (CPEC)

The first thing I noticed when flying back home to Karachi from Singapore was the stark advancements and numerous container ships present around Karachi Port. Perhaps it is my increased observation about the environment around me which led me to notice this, but it still made me wonder how such an underdeveloped nation would compare to the tiny nations of UAE and Singapore (not even considering the size of Chinese ports).

Figure 5.1 and 5.2: Overhead shots of the Karachi Port from the flight.

Figure 5.3: Map of the Karachi Port

When reading more about the recent expansions of Karachi Port, there was an increased amount of focus on investment onto creating corridors linking the port traffic to the Shahrah-i-Bhutto motorway, national highway link torad, and a dedicated frieght corridor to the Pipri Marshalling Yard (Qasim Town, near Port Qasim) as well as a Multimodal logistics park [1] funded by DP World.

DP World’s involvement was astonishing; what were Dubai investments doing in Karachi’s port? What was even more surprising was the President of the United Arab Emirates making his first visit to Pakistan on 26^th December. According to the Ministry of Foreign Affairs of Pakistan, the visit of His Highness reflects the depth of bilateral relations between the two countries shared commitment of both sides to further enhancing collaboration in key areas, including trade, investment, energy, development and regional stability[2].

This sounds similar to the objectives that China has in terms of economic relations with Pakistan.

The inauguration of Pakistan’s first ferry terminal in January 2026 is symbolically more important than it appears. Passenger services to Iran and the Gulf signal intent to grow this busy port (although my concerns regarding this will appear later on).

On the cargo side, proposals to route Bangladesh China trade through Karachi under the China-Pakistan Economic Corridor help position Pakistan as a place to also act as an intermediary for economic relations between nations. 

Furthermore, the long-term agricultural bulk facility agreement between AD Ports Group and Louis Dreyfus reinforces this.

Why AD Ports Group and Louis Dreyfus Group?                     

AD Ports Group has signed multiple long-term concessions, including a 50-year deal for the Karachi Gateway Terminal (containers) and a 25-year agreement for East Wharf (bulk and general cargo). These involve hundreds of millions in investments to upgrade infrastructure, boost capacity to over 1 million TEUs annually, and handle Post-Panamax vessels[3][4][5].

This gulf capital does not enter Pakistan for efficiency, but rather it benefits from Pakistans operational challenges.

Operationally, Karachi Port is stretched. It runs close to full capacity. Delays, demurrage, and congestion are not temporary frictions. They are structural features. Yet capital continues to flow in. That contradiction is the signal. Over $1 billion from Hutchison Ports and hundreds of millions more from Gulf operators would not be deployed if the thesis were purely operational. It is a completely geographic based strategy.

Figure 5.4: Trade Routes in the Arabian Sea Region, Source: Plutus IAS 

Hutchison’s presence is particularly telling. It has operated the Karachi International Container Terminal since 2002 and continues to expand despite delays and tariff increases. This is not optimism about Pakistan. It is confidence in trade lanes. Karachi sits on the Arabian Sea, adjacent to Gulf markets, and downstream from Chinese industrial output. That positioning compensates for almost everything else.

What struck me personally, returning from Singapore, was not that Karachi looked advanced. It clearly does not. It was that it looked busy. Container traffic, ship density, and corridor construction suggested motion, not polish. Pakistan does not resemble Singapore or the UAE, and it never will. The comparison is misplaced. The correct comparison is with China in its earlier, messier phases, where inefficiency coexisted with relentless throughput growth.

This is why Karachi Port matters in my broader research. Not because it works well, but because it works enough. Pakistan’s opportunity, if it exists at all, exists in these partially functioning systems that global capital still finds worth engaging with. Karachi Port is one of the few places where that engagement is visible, sustained, and growing.

Once again, on my flight from Karachi to Dubai, I overheard two businessmen speak about Port Qasim and Gwadar Port; two gems of Pakistan’s trade. While I could barely hear them, watching them step onboard the first-class lounge and speaking about business partnerships in Dubai made me wonder, ‘so… there is development in Pakistan?’.

Gwadar Port is Pakistan’s deep seaport in Balochistan. It holds strategic importance as the terminus of the China-Pakistan Economic Corridor (CPEC), enabling trade links between China, Central Asia, and global markets while bypassing chokepoints like the Strait of Malacca.

Figure 5.5: Pakistan Railway, from Shanghai to Kashgar to Gwadar

Gwadar holds key geostrategic value due to its location near the Strait of Hormuz, facilitating access to 20% of global oil trade and serving as a gateway for China, Central Asia, and the Middle East via CPEC. It reduces China's shipping distances by up to 4,000 km from the Persian Gulf, bypassing vulnerable Malacca Strait routes.

The Distance from Shanghai to Kashgar (in Xinjiang, China) combined with Kashgar to Gwadar would be 4,375 miles in total. Whereas, through current trade routes, it would be 9,307 miles. Using the Shanghai-Kashgar-Gwadar route would cut the distance of the route by 2.13 times and would be less prone to any vulnerabilities of the trade route as it only involved Pakistan as a nation. Strong military is important for the protection of trade routes, and Pakistan being a nuclear-powered nation noted as the 12^th most powerful army in the world, China has a strategic advantage with this CPEC project.

China has invested $1.62 billion specifically in Gwadar Port development via China Overseas Port Holding Company, while total CPEC investments have reached $25.93 billion, generating over 261,000 jobs and adding more than 8,000 MW of electricity capacity nationwide. Consistent infrastructure across Pakistan's four provinces; Khyber Pakhtunkhwa (KPK), Punjab, Balochistan, and Sindh; are essential for enabling CPEC trade routes, as the corridor upgrades highways, railways, and energy projects linking Gwadar to Xinjiang. However, one of the fundamentals that would enable the trade routes to be prosper is the consistency of infrastructure in all four provinces in Pakistan. Pakistan's linguistic diversity, with over 70 languages spoken (including major ones like Punjabi, Sindhi, Pashto, and Balochi, plus numerous indigenous and tribal dialects), underscores the need for inclusive development to mitigate regional disparities and security challenges.

Figure 5.6: CPEC Routes across Pakistan                

 

Figure 5.7: CPEC routes (provinces labelled)

Looking at Pakistan through this lens changed how I view the country’s role in global systems. Pakistan may not be a major oil producer, but its geography places it directly along critical trade routes. Observing developments at Karachi Port, Gwadar Port, and across the China-Pakistan Economic Corridor reinforced the idea that relevance does not come from efficiency alone. Capital continues to flow into these assets not because they are perfect, but because they sit in the right place. 

Original on duazafar.com