For most of the past decade, the economic story between China and Pakistan was written in concrete and steel — highways, power plants, and the sprawling infrastructure buildout of the China-Pakistan Economic Corridor (CPEC). In 2026, a year that marks 75 years of diplomatic relations between the two countries, that story is visibly turning a page. The relationship is still anchored by CPEC, but it’s increasingly being layered with new financial instruments, new sectors, and a broader industrial partnership that looks less like a construction project and more like genuine economic integration.

A Symbolic First: Pakistan’s Panda Bond

Perhaps the clearest marker of this shift came in May 2026, when Pakistan issued its first-ever Panda Bond — a yuan-denominated debt instrument sold directly into China’s onshore capital market. The three-year bond, worth $250 million, came backed by guarantees from the Asian Infrastructure Investment Bank and the Asian Development Bank, giving international investors added confidence in a market that has historically been seen as higher-risk.

Pakistani officials have described the move as more than a routine financing exercise. It represents the country’s relationship with China moving into an entirely new domain — from bilateral trade and infrastructure lending into China’s own domestic financial architecture. Some analysts have gone as far as to argue that this moment carries even greater long-term significance than earlier milestones in the broader China-Pakistan relationship, precisely because it signals financial integration rather than just aid or project financing.

CPEC’s Second Phase

None of this means infrastructure cooperation has taken a back seat — if anything, 2026 has been framed explicitly as the year CPEC enters its “second phase.” Where the corridor’s first decade focused heavily on energy generation, highways, and the development of Gwadar port as a logistics hub, this next phase is being positioned around expanding regional connectivity and unlocking Gwadar’s fuller potential as a hub for trade beyond Pakistan’s own borders.

High-level visits between the two countries’ leadership throughout the year — including meetings between Chinese President Xi Jinping and Pakistani Prime Minister Shehbaz Sharif in Beijing — have consistently reaffirmed commitment to accelerating this phase, with both governments describing the relationship as carrying growing strategic weight amid a shifting global economic landscape.

Widening Beyond Infrastructure: AI, Digital Trade, and Industry

The more structurally interesting shift is where new investment is actually flowing. Pakistan-China economic engagement, which for years was defined almost entirely by highways, energy, and ports, is now visibly expanding into artificial intelligence, digital trade, space technology, and broader industrial cooperation. Recent high-level visits have included direct meetings between Pakistani leadership and major Chinese technology companies, alongside participation in bilateral investment forums aimed specifically at expanding business-to-business ties beyond state-level infrastructure deals.

This is a meaningful evolution. Infrastructure investment, by its nature, tends to be front-loaded — once the roads and power plants are built, the flow of new capital naturally slows. Industrial and technology investment works differently: it’s ongoing, it creates recurring trade relationships, and it embeds itself into a country’s consumer economy in ways that infrastructure spending typically doesn’t.

This is also the backdrop against which developments like Deepal’s REEV vehicle rollout in Pakistan make the most sense — not as an isolated automotive story, but as one visible example of a broader pattern: Chinese manufacturers moving beyond exporting finished goods to Pakistan and instead establishing local assembly, technical capability, and long-term market presence within the country. The same logic that’s driving Panda Bonds and AI partnerships is showing up, concretely, in a Karachi factory building electric SUVs.

Security and Institutional Cooperation

Economic integration of this depth doesn’t happen in a vacuum, and 2026 has also seen the two countries formalize security cooperation alongside their financial and industrial ties. Both governments agreed to establish a dedicated China-Pakistan Security Partnership, expand counter-terrorism cooperation, and strengthen protective measures for Chinese personnel and projects operating within Pakistan — a recognition that sustained economic investment requires sustained security guarantees to match it.

On the multilateral stage, China has also expressed support for Pakistan’s role as the incoming rotating president of the Shanghai Cooperation Organisation for 2026 to 2027, giving Pakistan a more prominent platform within a regional bloc where China plays a leading role.

What It Adds Up To

Taken individually, none of these developments — a bond issuance, a CPEC milestone, a tech delegation, an EV factory — would necessarily signal much on its own. Taken together, they describe a relationship that’s maturing past its original template. CPEC built the physical foundation of China-Pakistan economic ties over the past decade; what’s happening in 2026 looks more like the beginning of the next layer being built on top of it — one defined less by construction and more by capital markets, technology transfer, and industrial partnership.

Whether that momentum holds will depend on factors well beyond either government’s economic ministries — regional security, global trade dynamics, and Pakistan’s broader macroeconomic stability among them. But for a relationship both countries have spent 75 years calling “all-weather,” 2026 has, so far, been a year of visible expansion rather than consolidation.

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KARACHI: In a significant engagement with Pakistani media, Yang Yundong, Consul General of the People’s Republic of China in Karachi, provided an in-depth briefing on Friday on the key takeaways from China’s recently concluded Two Sessions. Held during the sacred month of Ramazan, the event underscored China’s commitment to fostering understanding and cooperation with Pakistan.
The Two Sessions refer to the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), both of which play a crucial role in shaping China’s governance and policy direction. These gatherings bring together representatives from across China to discuss economic policies, legislative amendments, and social development plans. Established in 1959, the system has remained a pillar of China’s governance for over six decades.
The NPC, China’s highest legislative body, drafts laws and oversees major national policies. Its representatives are selected through a structured electoral process from the grassroots to the national level. Meanwhile, the CPPCC functions as a consultative body that includes members from different political parties, independent figures, and professionals across various sectors, such as culture, science, and technology. Together, these institutions embody China’s whole-process democracy, ensuring policymaking remains inclusive and responsive to national needs.
A key theme of the discussions was China’s economic resilience. The government’s work report revealed that China achieved a 5% GDP growth in 2024, maintaining its status as one of the fastest-growing economies. With a per capita GDP exceeding USD 13,000, China contributed approximately 30% to global economic expansion. Notable achievements included record-breaking grain production of over 700 million tons and a significant boom in the new energy vehicle industry, which produced over 13 million units.
Looking ahead, China has set a 5% GDP growth target for 2025. Despite external challenges and domestic economic adjustments, the leadership remains confident in achieving these goals through robust economic policies, high-quality development, and technological innovation.
Advancements in Technology and Innovation: China’s commitment to strengthening its technological capabilities was another major highlight. President Xi Jinping emphasized the integration of scientific and industrial innovation as a cornerstone of economic transformation.
• In 2024, the high-tech manufacturing sector grew by 8.9%, while the equipment manufacturing industry saw a 7.7% increase.
• Investments in research and development reached 3.6 trillion RMB, leading to groundbreaking advancements in artificial intelligence, integrated circuits, and quantum technology.
• Notable achievements included the emergence of China’s AI model “DeepSeek” and the global success of the animated film Nezha 2, showcasing China’s rising influence in technology and creative industries.
In 2025, China aims to enhance its self-reliance in science and technology by furthering digital transformation, promoting industrial innovation, and modernizing traditional manufacturing sectors.
People-Centric Development: Employment, Education & Welfare: China’s modernization strategy remains people-centric, focusing on employment, education, and social welfare.
• In 2024, the urban unemployment rate was maintained at a low 5.1%, with over 33 million individuals from poverty-stricken backgrounds securing jobs.
• National scholarships supported over 34 million students, while social assistance programs were expanded to aid vulnerable populations.
For 2025, the government has pledged to:
• Create over 12 million new urban jobs.
• Increase financial allocations for public welfare programs.
• Launch large-scale vocational training initiatives.
• Continue efforts in urbanization and rural revitalization to ensure balanced development across regions.
China’s Global Engagement and Multilateral Cooperation: The Two Sessions also highlighted China’s growing global engagement. Over 100 countries have expressed support for China’s “Three Major Global Initiatives,” while more than three-quarters of the world’s nations are now part of the Belt and Road Initiative (BRI). Notably, for the first time in 2024, trade between China and BRI partner countries accounted for over 50% of China’s total foreign trade.
Looking forward, China remains committed to an independent and peaceful foreign policy while opposing hegemonism and protectionism. The country aims to strengthen multilateral cooperation, promote mutual benefits, and play a constructive role in addressing global challenges.
As Pakistan and China mark key milestones — the 10th anniversary of President Xi Jinping’s visit to Pakistan this year and the upcoming 75th anniversary of diplomatic ties in 2026 — bilateral relations are poised for further growth.
Consul General Yang Yundong reaffirmed China’s commitment to expanding cooperation with Pakistan in trade, infrastructure, and cultural exchanges. He emphasized the China-Pakistan Economic Corridor (CPEC) as a cornerstone of shared prosperity, calling for its expansion and modernization.
“The successful conclusion of the Two Sessions signifies China’s unwavering commitment to high-quality development and international cooperation. We look forward to working closely with our Pakistani friends to create a brighter future together,” said the Consul General.
The briefing reinforced that Chinese modernization is not just a path to national rejuvenation but also a model that offers valuable insights for developing nations, including Pakistan. Through peaceful development and win-win cooperation, China aims to create new opportunities for global progress.
As both nations navigate the evolving geopolitical and economic landscape, the enduring China-Pakistan friendship continues to serve as a beacon of regional stability and shared prosperity. The session was attended by prominent media professionals from Karachi and Chinese envoys.

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ISLAMABAD: The China-Pakistan Economic Corridor (CPEC), a flagship project of the Belt and Road Initiative (BRI), has witnessed remarkable progress in Pakistan, attracting direct investments worth US$25.4 billion from China over the past decade.
A senior official from the Chinese Foreign Ministry stated that the CPEC has formed a comprehensive “1+4” cooperation layout, with the CPEC at the center and Gwadar Port, transport infrastructure, energy, and industrial cooperation as the four key areas.
The CPEC projects have contributed to job creation, generating 192,000 employment opportunities. Additionally, they have facilitated the production of 6,000 megawatts of electric power, the construction of 510 kilometers of highways, and the expansion of the national transmission network by 886 kilometers. The CPEC is considered a significant project in China-Pakistan cooperation and plays an essential role in the Belt and Road Initiative.
The 10th anniversary of the CPEC marks a decade of substantial achievements. It has not only contributed to Pakistan’s national development and regional connectivity but also explored new areas of cooperation, including agriculture, science and technology, telecommunications, and people’s well-being.
China is committed to building upon the past achievements and advancing high-quality development of the CPEC in line with the common understandings between the leaders of both countries.
Prime Minister Shahbaz Sharif acknowledged the pivotal role played by the CPEC in transforming Pakistan’s economic landscape. The implementation of multi-billion-dollar development projects under the CPEC has brought socio-economic benefits to Pakistan, elevating the country’s progress regionally and globally.
The prime minister expressed the commitment to expedite the pace of work on CPEC projects and enhance cooperation with China in various sectors such as agriculture, special economic zones, information technology, and mineral resource exploration.
Experts have praised the transformative impact of the CPEC on Pakistan’s development landscape. Over the past decade, the completion of numerous multi-billion-dollar projects, including power plants, mass transit systems like the Orange Line, and road infrastructure, has propelled the country forward.
The vision of the BRI, combined with Pakistan’s strategic location, aims to establish the nation as a regional hub for trade, commerce, manufacturing, and agriculture. The CPEC represents the unwavering commitment and collaboration between the leadership of Pakistan and China.

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ISLAMABAD: President Dr Arif Alvi on Friday said that the China Pakistan Economic Corridor was a strategic project having economic, financial, logistics and connectivity value for Pakistan and China as well as regional and other countries.

The president, in a meeting with China’s Ambassador in Pakistan Nong Rong, who called on him, at Aiwan-e-Sadr, said Pakistan would welcome other countries to partner and benefit from this project.

He said that full operationalization of CPEC and the planned Special Economic Zones (SEZs) was an important milestone and urged the Chinese IT sector to invest in SEZs and benefit from Pakistan’s cost-effective human resources, liberal investment regime, cyber data protection policy and tax incentives.

During the meeting, the president emphasized the need to fully operationalize road linkages between China and Gwadar port in all weather conditions, around the year, to fully utilize their capacity and achieve their fullest potential.

He further said that Pakistan had taken tangible steps to ensure the safety and security of Chinese workers and nationals who were contributing to the development of various strategic projects.

President Alvi said that Pakistan was learning from the steps taken by the Chinese leadership to bring millions of people out of poverty and provide health facilities at the grassroots level by adopting out-of-box solutions which multiplied the quality and efficiency of human resources and led China towards progress and prosperity.

He also made a special reference to the Chinese Barefoot doctors who were trained and equipped with the necessary skills and tools in a record period of six months and played a pivotal role in improving the health indicators of China.

While referring to the meeting of the higher leadership, the president said that during these meetings, the friendship and cooperation in the economic, financial, communication, trade and investments were further strengthened.

He appreciated that sizeable progress had been made to complete the already commissioned projects, launch new projects and move forward the ML-1 project to put the country on a fast trajectory of development.

The president said that in the current changing world scenario, China had assumed great importance in the region where Pakistan was a close partner of China to pursue peace and stability in the region.

He said that close cooperation between the two countries in marketing JF-17 Aircraft in the world market would help in expediting the export of state-of-the-art fighter aircraft and meet the security needs of the buying countries.

He further said that both countries should explore options to use local currency for bilateral trade and investment, which would not only reduce the cost but also increase the volume and quality of the trade and investment between the two countries.

The president appreciated the investment by the Chinese company in a garment factory in Lahore, which was producing garments for internationally reputed brands. The factory was established in a record period of 5 to 6 months and had started the exports of value-added products and is earning substantial foreign exchange.

He also emphasized the need for upscaling this facility and copying the project in other regions of the country as well.

President Alvi encouraged the Chinese companies to set up their outlets and manufacturing plans for semiconductors in Pakistan and benefit from the trained and cost-effective human resources, tax incentives and other benefits offered by the Government of Pakistan.

The Chinese ambassador conveyed greetings of the Chinese President Xi Jinping and Premier Li Keqiang to the president. He said that the Chinese government was fully committed to completing CPEC as fast as possible, envisaging new projects and reaching out to the Government of Pakistan to meet its immediate financial and economic needs.

The president also appreciated the continuous financial and economic support and assurances of President Xi Jinping and said that it would help bring financial stability to the country.

He also appreciated the project undertaken by the Chinese company to launch the Safe City Project in Lahore, which would provide the city with a much-needed secure environment.

President Alvi also expressed his gratitude for the generous support and sympathy extended by the Chinese government, army, corporations and the general public to alleviate the suffering of millions of affectees of recent super floods in Pakistan. – APP

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BEIJING: China Pakistan Economic Corridor (CPEC) energy projects have improved the power industry in Pakistan and contributed to economic growth by increasing power supply with high efficiency at lower cost, Tauseef H. Farooqi, Chairman National Electric Power Regulatory Authority (NEPRA) said.

In an interview with China Economic Net (CEN), the Chairman said, the total installed capacity of CPEC energy projects, including that of coal, wind, solar and hydropower, stands at 6570 MW. They generated 28549.94 Gwh and 25772.48 Gwh power respectively in FY2020-21 and FY2021-22, accounting for 22.03% and 18.37% of the total generation in Pakistan.

The average 20% annual addition to the national grid has alleviated rampant cases of load shedding within the country and especially powered the export-oriented industries in Pakistan.

Pakistan’s energy sector is mainly dependent on imported fuel (oil and LNG), which has caused a heavy burden on foreign reserves and confined the industrial development of the country.

“As the CPEC energy projects replaced the costlier energy production from furnace oil and diesel to coal and renewable energy resources in the last five years, the energy needs of Pakistan has been fulfilled at lower prices, driving growth in the export-oriented industries”, the Chairman revealed.

Regarding the power generation cost, in October 2021, CPEC projects based on imported coal produced electricity at Rs.8.0/kWh. While the cost of domestic projects based on FO and RLNG were Rs.21.5/kWh and Rs.20.0/kWh respectively, twice more expensive than CPEC projects, data provided by KASB Trade shows.

The cost has been rising over the last year due to surged fuel prices in the international market. Nevertheless, the CPEC projects still provide competitive rates. In October this year, the power generation cost of CPEC projects based on imported coal was Rs.18.5/kWh, and that of domestic projects based on FO and RLNG was Rs.34.0/kWh, Rs.31.0/kWh.

When it comes to electricity rate, the chairman told the CPEC projects (EPP) based on coal is Rs.22.13/kWh on average, and that of non-CPEC projects based on oil is Rs.36.61/kWh. This shows the CPEC energy projects, utilizing fuel with higher efficiency, are providing affordable electricity to millions of Pakistani households.

Rising fuel prices and a new energy landscape after the Ukraine war necessitate Pakistan to avail of its indigenous resources, and at the time being, the most efficient solution is Thar coal.

Data provided by NEPRA shows that proven coal reserves in Thar are approximately 175 billion tons. After the commissioning of phase II of Block II, the daily coal production is approximately 24,000 tons, sufficient to fire 1320 MWs. Based on current coal prices of South African Coal, the fuel saving is approximately Rs. 13.46/kWh and the annual fuel savings for 1320 MW will be approximately Rs. 121 billion from Thar coal.

CPEC projects have enabled Pakistan to utilize the Thar coal and produce electricity at around Rs.7-7.5/kWh, the report says. Currently, the 660 MW Engro Power Thar Limited, Lucky Electric, Engro Powergen Thar and Thar Energy are completely or partially running on Thar coal.

On top of that, another 1,320 MW Shanghai Electric coal power plant, together with an open-pit coal mine of 7.8m tons capacity in Thar Coal Block-1, has been completed recently and is in the process of synchronizing with the national grid. Once put into commercial operation, it will help double electricity generation based on Thar coal to 2640 MW and lower average electricity costs in Pakistan.

In December 2020, Pakistan announced that it would not build any new power projects that depend on imported coal, and pledged that by 2030, 60pc of its energy will come from clean and renewable sources. This coincided with China’s commitment to building a green CPEC, which entails not building new coal-fired power plants overseas, and increasing support for low-carbon energy.

In this connection, four hydropower projects have been completed or are in development under the CPEC Framework, including the biggest run of the river hydropower project 720 MW Karot HPP commissioned on 29th June 2022, 840 MW Suki Kinari HPP under construction, and a 640 MW project recently approved in Mahl.

According to the State of Industry Report 2022 issued by NEPRA, the HPPs have a comparatively long operational life which can be used as an advantage for reducing their tariff through a large spread of the cost over the life of the project.

Besides, CPEC projects have invigorated the once barren land in Jhimpir and transformed the region into a wind corridor in real. Four wind farms built here with a total installed capacity of 300 MW have supplied economical and clean energy to the national grid of Pakistan.

In Bahawalpur located the first ever solar power plant in Pakistan Quaid-e-Azam Solar Park. The plant was initially launched with a capacity of generating 100 MW of power. Since 2015, there has been addition of 300 MW power generation capacity, and there are numerous planned projects reported for the Quaid-e-Azam Solar Park by AEDB with a cumulative capacity of 1,050 MW.

The State of Industry Report 2022 by NEPRA shows the price of electricity from wind and solar power plants are less than half of the price of electricity currently being procured from thermal sources. – APP

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BEIJING: China and Pakistan have expanded cooperation under the China-Pakistan Economic Corridor (CPEC) and made notable progress in areas such as green, information technology, industrial development and health, Chinese Foreign Ministry Spokesperson, Mao Ning said on Monday.

“CPEC is the flagship project for China-Pakistan cooperation. It has made tangible contributions to the social economic development in Pakistan and regional interconnectivity,” she said during her regular briefing.

She remarked that in recent years, the two sides had expanded cooperation under the CPEC and notable progress had been made in such areas as green development, industrial development, Information Technology development and health.

Mao Ning informed that the first meeting of the joint working group on Information Technology (IT) was held.

China donated the solar equipment to Baluchistan province, and a green project in Gwadar port also made progress, she said and added, “We also made COVID containment jointly.”
The spokesperson said that the Chinese side was ready to work with Pakistan together to implement the important consensus of our two leaders and to follow through on practical cooperation to make CPEC a demonstrative project for high quality cooperation under the Belt and Road.

It may be mentioned here that Prime Minister Shehbaz Sharif’s maiden visit to China early this month was unprecedented, constructive and successful.

The two sides agreed to further build on the health, industry, digital and green corridors launched earlier this year and carry out relevant cooperation. – NNI

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