CPEC Phase 2 isn’t about flashy launches or big promises anymore. It’s more about fixing what’s been left half-done and finally doing what matters: creating jobs, building industries, upgrading agriculture, and making everyday life a bit easier. Phase 1 gave us roads, power plants, Gwadar port too, now Phase 2, it’s more about actually making all that useful, turning it into real economic work. In simple words, Pakistan now needs economic results not just shiny highways.

Brief recap of Phase 1

Phase 1 of CPEC (2015–2021) focused mainly on energy and transportation. Pakistan was going through serious electricity shortages, so most of the early projects like Sahiwal coal plant, Karot hydropower (720 MW), and Port Qasim terminal were about producing power fast. Over 8,900 MW was added. Highways like Multan–Sukkur Motorway and roads leading to Gwadar were constructed. It did help reduce load-shedding and improved connectivity across provinces. But the economic impact—jobs, exports, and long-term trade—remained weaker than hoped.

Source: CPEC.gov.pk

Transition into Phase 2 and strategic importance

In 2024, both Pakistan and China agreed that the next step isn’t about just laying more concrete. It’s about using what’s already there to build industries, digital zones, and agriculture that actually earns money and creates jobs. The Joint Coordination Committee (JCC) finalized a new direction Phase 2 would include Special Economic Zones (SEZs), agricultural modernisation, vocational training, IT infrastructure, and better logistics (Business Record). Geoeconomic analysts have pointed out the larger purpose: “for China, it means a shorter trade route to the Arabian Sea via Pakistan, for Pakistan, a potential route out of economic stagnation” (Sites gatech edu)

Key Objectives of CPEC Phase 2

Three things stand out: 1) Build SEZs to attract foreign and local industries, 2) Improve agriculture by using Chinese tech and modern methods, and 3) Provide skills to people so they can get real jobs—not just road construction contracts. Rashakai SEZ in KP is already partially operational. Technical institutes are being set up in Balochistan. And discussions are ongoing about food processing zones and smart irrigation in Sindh and Punjab. The idea is to connect the rural economy to national output.

As confirmed in a policy briefing by the Institute of Policy Reforms (IPRI), these are the core pillars of CPEC Phase 2: SEZ development, agri-modernisation through Chinese collaboration, and vocational training—especially in underdeveloped regions.

Major CPEC Phase 2 Projects

Some projects under Phase 2 include Dhabeji SEZ in Sindh (expected $3 billion investment), ML-1 railway track upgrade (1,872 km from Karachi to Peshawar), the new Gwadar International Airport, and hydropower projects like Azad Pattan. There are also IT parks planned in Islamabad and Karachi, with fibre optics expansion for faster internet. In minerals, cooperation between Chinese and Pakistani firms in Thar and Chagai is starting to take shape. These aren’t just showpiece projects—they’re supposed to actually bring business.

Impact on Pakistan’s Economy and Infrastructure

Experts say CPEC Phase 2 could create around 1.2 million jobs by 2030 (APP). That includes roughly 100k from ML-1 construction, 320k from SEZs, and many more in agriculture and tech. Rashakai alone is expected to generate up to 250,000 indirect jobs when it reaches full scale. Exports might finally go up if industries like auto parts, food processing, and textiles take off in these zones. For daily life, it could mean better internet, smoother rail travel, and more balanced growth in smaller towns—not just big cities.

China’s Role in CPEC Phase 2

China’s still fully involved—not just with money but also with technical support. Their banks like the Silk Road Fund and institutions like China Development Bank are financing many of these second-phase projects. But they’re being more cautious now, focusing on returns and proper planning. Teams from China regularly visit Pakistan to monitor progress and troubleshoot issues with local authorities. It’s no longer just about “brotherly” ties—it’s business, with expectations from both sides. This was reaffirmed during President Zardari’s 2025 visit to Beijing, where China pledged continued technical and financial cooperation on CPEC Phase 2, including Gwadar Port, ML-1, and new mineral and energy projects.

As China’s Foreign Ministry stated in February 2025, “China will encourage Chinese companies to invest in Pakistan’s Special Economic Zones in accordance with the market and commercial principles”.

The Pakistani Deputy Prime Minister echoed the tone, saying, “As we enter CPEC Phase 2, we look forward to corridors of growth, livelihood, innovation, green development, and inclusivity”.

Challenges and Opportunities Ahead

Security remains the biggest issue—attacks on Chinese workers in Balochistan and interior Sindh have raised serious concerns. Pakistan has stepped up protection, but risks are still there. Land disputes, slow paperwork, and changing political environments also delay work. On the flip side, if done right, Pakistan could become a trade and industry bridge between China, Central Asia, and the Middle East. But that’s a big “if” that depends on policy stability, transparency, and capacity of institutions.

Conclusion

CPEC Phase 2 is Pakistan’s second chance. The roads have been built, the ports are there, and electricity is flowing. Now it’s time to make all of that mean something for the economy. The pressure is on—to convert promises into progress, and infrastructure into income. China is watching, investors are cautious, and the Pakistani people are waiting for real benefits. Whether this phase succeeds or fizzles out will depend on how seriously we treat it—not just in speeches, but in action.

FAQs

Who started CPEC?
CPEC was officially launched in 2015 during Chinese President Xi Jinping’s visit to Pakistan. It was initiated under Prime Minister Nawaz Sharif.

How many jobs will CPEC Phase 2 create?
It is estimated to create around 1.2 million jobs by 2030, mainly through SEZs, railway projects, and agriculture tech.

What is the full form of BRI?
BRI stands for Belt and Road Initiative.

Who invested in CPEC?
Investments came mainly from Chinese banks like China Development Bank and Silk Road Fund. Pakistan provides land, co-financing, and policy support.

Is CPEC done?
Phase 1 is mostly complete. Phase 2 is ongoing and will likely continue until at least 2030.

What is the ML-1 Project?
It’s a railway upgrade from Karachi to Peshawar covering 1,872 km. It aims to double track capacity and increase train speeds up to 160 km/h.