Governance reforms and priortizing skills development crucial for effective CPEC 2.0 implementation

ISLAMABAD: Speakers at a high-level policy dialogue were of the view that the governance reforms and priortizing skills development are crucial for effective CPEC 2.0 implementation.

The dialogue brought together senior policymakers, experts, and representatives of the Chinese diplomatic mission to assess governance and regulatory reforms required for effective implementation of CPEC Phase II.

Discussions focused on facilitating business-to-business (B2B) investment, enabling technology transfer, and strengthening coordination between public and private stakeholders. The session was moderated by Ms. Nabila Jaffer, Lead of the China Program at IRS.

In his opening remarks, Ambassador Jauhar Saleem, President of IRS, noted that while CPEC 2.0 offers Pakistan an opportunity for economic transformation we need to ensure that the best value is obtained for the mega investment that would be made.

While Phase I addressed key infrastructure and energy deficits, it fell short of generating broad-based economic spillovers due to structural and institutional constraints. As CPEC becomes B2B focused rather than G2G, as was the case earlier, it will expand into new sectors which need to be selected thoughtfully.

He emphasized three essential pillars for success: institutional coherence, human capital development, and a stable, credible investment environment anchored in private-sector participation.

In his keynote address, Federal Minister for Investment, Qaisar Ahmad Shaikh, highlighted lessons from China’s development model, underscoring education, technology, and skills as its core drivers. He stressed the urgency of addressing Pakistan’s trade imbalance by enhancing export capacity and leveraging Special Economic Zones (SEZs) to attract foreign direct investment (FDI).

He noted that Pakistan is offering significant land for industrial development, including coastal sites, and that nearly 70 percent of regulatory reforms aimed at reducing red tape have been completed. Referring to a recent delegation of Pakistani business leaders to Beijing, he emphasized the need for Pakistani firms to move beyond import dependence toward technology partnerships and joint ventures with Chinese counterparts.

Mr. Shi Yuanqiang, Deputy Head of Mission at the Chinese Embassy, highlighted the achievements of CPEC Phase I in addressing Pakistan’s infrastructure and energy gaps, and outlined the five-corridor framework of CPEC 2.0—Growth, Livelihood, Innovation, Green, and Open.

He cited key developments, including progress in Special Economic Zones, expansion of energy investments, and growing cooperation in health and space sectors. He also noted the alignment between China’s 15th Five-Year Plan and Pakistan’s “Uraan Pakistan” initiative, reaffirming China’s commitment to deepening cooperation in industry, agriculture, and mining.

Ambassador Masood Khalid, former envoy of Pakistan to China also emphasized the need to remove administrative and regulatory barriers to attract investment into SEZs and called for stronger coordination between federal and provincial institutions. He also highlighted the importance of advancing the ML-1 railway project as a cornerstone of economic connectivity.

Asim Khan Niazi, former Project Director MPD&SI and advisor on BRI, argued that CPEC 2.0’s success will depend on governance quality rather than infrastructure alone. He proposed aligning China’s five corridors with Pakistan’s “five Es” and called for digitalized approvals, real-time monitoring, and stronger accountability to address persistent implementation gaps.

Amna Munawwar Awan, President of the Centre for Pakistan and International Relations, underscored the shift to a business-to-business model under CPEC 2.0, highlighting key challenges such as financial facilitation gaps, lack of single-window trade mechanisms, and workforce skill deficits. She also emphasized greater inclusion and investment in value-added sectors.

Shehryar Khan, Executive Director of the National Dialogue Forum, identified Pakistan’s credibility deficit—stemming from policy inconsistency and weak enforcement—as a major constraint. He stressed the need for cluster-based industrial development, inclusive resource management, and aligning Pakistan’s geopolitical gains with credible economic performance.

The dialogue concluded with a strong consensus that Pakistan’s recent diplomatic gains must be translated into tangible economic outcomes. Achieving this will require sustained governance reforms, improved policy coherence, and a shift toward enterprise-led cooperation to fully realize the potential of CPEC 2.0.