The ambitious project, part of Chinese President Xi Jinping’s signature Belt and Road Initiative, was originally estimated to bring in $46 billion of investment into Pakistan. But it’s now estimated to have increased to about $65 billion. 

During the first phase of CPEC, dozens of projects, mainly related to power and transport infrastructure, were carried out with the help of Chinese money. The second phase of the initiative, which began last December and comprises 27 projects, has focused on boosting manufacturing capacity and job creation. 

And Beijing has been pumping money not only to Pakistan’s economic hubs, but also to places like Pakistan-administered Kashmir and northwestern Khyber Pakhtunkhwa province. Many Pakistanis remain euphoric about the growing Chinese investment in the country, arguing that it’s needed to pull Pakistan out of a severe ongoing economic crisis. 

Compounding the economic turmoil is the COVID pandemic, which has caused tens of thousands of small businesses to shut down and resulted in over 20 million people losing their jobs. Pakistan’s Khyber Pakhtunkhwa province was badly hit by Islamist terrorism between 2004 and 2015. Tribal areas in the region were considered a hub for Islamists, including those affiliated with terror outfits like al-Qaeda and the Haqqani network. Given this terrible law and order situation, many Western countries and businesses were not willing to invest in the province. 

Qaiser Ahmed Shaikh, a former president of the Karachi Chambers of Commerce, said that China has moved in to fill the gap left by the West. Anila Khalid of Khyber Pakhtunkhwa Women’s Chambers of Commerce believes that Chinese investment is a “source of blessing” for the Pakistani economy. 

“First, China invested in our province under CPEC, working on various power and infrastructure projects,” she told DW, adding that “now it is also investing in sanitation and other projects.” In the southern province of Sindh, Chinese firms have not only completed several CPEC projects but have also bought a 40% stake in the Pakistan Stock Exchange (PSX) company. 

Ahmed Chinoy, a prominent businessman from the port city of Karachi and director of the PSX, told DW that the Chinese now have the powers to appoint the managing director, chief financial officer and chief regulatory officer of PSX. 

Such appointments, nevertheless, have to be endorsed by the board of directors, he added. Last June, the stock exchange was attacked by Baluch insurgents, who resent the Chinese investment in the insurgency-hit Baluchistan province. 

But Beijing seems to be undeterred by these threats. Multiple sources told DW that China is planning to buy a power utility in Karachi, which is one of the largest energy companies in the country. 

“The Chinese are trying to invest everywhere in Sindh,” said a regional government official on condition of anonymity. He pointed out that recently, sanitation contracts in five districts had been given out to Chinese companies. A number of businessmen, the Karachi Metropolitan Corporation and various trade union members corroborated the official’s claim. They expressed anger at the government for giving away such lucrative contracts to Chinese firms, which they believe undermines the authority of civic bodies. Khurram Ali, secretary-general of the Awami Workers Party in Karachi, claims that various oil exploration blocs in Sindh have also been given to Chinese companies. Western companies like British Petroleum had been operating such blocs in the past, he added.