By Moaaz Manzoor

Strengthening governance frameworks, removing regulatory bottlenecks, and expanding private sector participation will be critical to unlocking the full potential of CPEC Phase 2.0, speakers said at a policy dialogue in Islamabad.

The event, organised by the China Programme at the Institute of Regional Studies, brought together policymakers, diplomats, and analysts to discuss governance and implementation strategies for CPEC 2.0. It also marked the launch of two research reports titled “From Infrastructure to Impact: Conceptualising the Strategic Corridors (5Cs) under CPEC 2.0” and “Unlocking CPEC Phase II: Building Capacity for Business-to-Business Cooperation with China and Central Asia.”

Speaking on the occasion, Federal Minister for the Board of Investment (BOI) Qaiser Ahmed Sheikh said CPEC 2.0 can become a source of development and industrialisation in the region, noting that the initiative is transitioning from infrastructure-led development to a model centred on industrial cooperation and private sector engagement.

He said improving the ease of doing business remains a priority, adding that efforts are underway to streamline regulations, simplify licensing procedures, and facilitate investors through institutional coordination. He highlighted that a one-window facilitation centre has been established in Islamabad, where focal persons from relevant ministries have been designated to resolve investor issues.

The minister also pointed to incentives offered in Special Economic Zones (SEZs), saying that land is being made available to attract investors. He said around 6,000 acres in Bin Qasim, Karachi, have been opened for investors, adding that industrial expansion under CPEC 2.0 will depend on how effectively Pakistan can convert policy intent into practical facilitation on the ground.

Earlier, IRS President Ambassador Jauhar Saleem said Pakistan’s economic direction is shifting towards regional connectivity and integration, but structural challenges continue to limit outcomes. He noted that while CPEC Phase 1 helped address major infrastructure and energy gaps — including adding over 10,000 megawatts to the national grid — its broader economic impact in terms of exports and industrialisation remained below expectations.

He stressed that Phase 2.0 provides an opportunity to move towards export-led growth through industrial upgrading, technology transfer, and deeper private sector participation, provided governance gaps and coordination issues are addressed.

Deputy Head of Mission at the Chinese Embassy Shi Yuanqiang said CPEC has entered a stage of “high-quality development,” structured around key areas including growth, innovation, green development, and openness. He said cooperation is expanding beyond infrastructure into sectors such as industry, agriculture, and technology.

Pakistan's former ambassador to China Masood Khalid highlighted the importance of policy continuity and institutional alignment, warning that excessive regulation and fragmented decision-making processes discourage investment. He said prioritising a limited number of fully functional SEZs would be more effective than spreading resources too thinly.

Presenting the research findings, Senior Research Analyst and Head of China Programme at IRS Nabila Jaffer said CPEC 2.0 represents a shift towards a B2B-driven model, with emphasis on capacity building, industrial collaboration, and integration with regional markets. She noted that governance weaknesses, regulatory inefficiencies, and skill gaps remain key constraints to achieving meaningful economic transformation.

Meanwhile, speaking with Wealth Pakistan on the sidelines, Qaiser Ahmed Sheikh said Pakistan is actively promoting B2B engagement with China, recalling that around 300 Pakistani businessmen participated in an investment conference in Beijing last year, where multiple memorandums of understanding and joint ventures were signed.

He said the strategy going forward is to involve more entrepreneurs from both sides, adding that Pakistan-China relations remain strong and provide a solid foundation for economic cooperation. He emphasised that foreign direct investment should be focused on value addition so that it translates into industrial growth, exports, and employment generation.

Participants at the dialogue agreed that while CPEC Phase 1 laid the groundwork for connectivity, the success of Phase 2.0 will depend on governance reforms, effective implementation, and the ability to translate strategic partnerships into tangible economic outcomes.

Credit: INP-WealthPk