Strategic synergy in Pakistan-China industrial cooperation

Editor's note: Saud Faisal Malik is founder and CEO at the Daily CPEC. The article reflects the author's opinions and not necessarily those of CGTN.

Pakistan and China launched the Industrial Cooperation Action Plan (2025–2029) on November 2, a strategic move that not only shifts the China-Pakistan Economic Corridor's (CPEC) focus from infrastructure to industrial growth but also deliberately paves the way for synergy with China's upcoming 15th Five-Year Plan (2026-2030). 

The visit of a 15-member Chinese delegation to Pakistan's Board of Investment and Special Economic Zones (SEZs) underscored China's intent to build a partnership that aligns with its next-phase national priorities, testing Pakistan's industrial capacity, policy stability, and strategic vision in the process.

CPEC's strategic expansion

The action plan's focus on manufacturing, technology, mining, and emerging sectors like clean energy, media, and transport robotics is a clear effort to broaden CPEC's economic footprint. This expansion is strategically timed to dovetail with the anticipated goals of China's 15th Five-Year Plan, which is expected to emphasize high-quality development, technological self-reliance, and green transition. 

By prioritizing these industrial sectors, the plan aims to integrate Pakistan into China's evolving industrial and supply chains, create skilled employment, and facilitate the technology transfer essential for sustainable growth.

Geo-economic synergy

This shift from infrastructure to industry creates profound geo-economic synergy. 

For Pakistan, it is a pathway to attract foreign direct investment, boost export competitiveness, and leverage its strategic location to become a regional manufacturing hub. For China, the partnership offers a strategic solution to several key objectives likely central to its 15th Five-Year Plan.

· Industrial upgrading and cost diversification: As China moves up the value chain, it seeks to relocate certain production phases to manage rising domestic costs. Pakistan's SEZs offer an ideal destination for this diversification, allowing Chinese firms to maintain competitiveness.

· Resource security: Access to Pakistan's untapped mineral resources, including copper, lithium, and rare earths, directly supports China's strategic push in technology, electronics, and green energy – sectors that will be pillars of its 15th Five-Year Plan.

· Regional market access: SEZ-based joint ventures provide a gateway to markets across South Asia, Central Asia, and the Middle East, helping Chinese companies internationalize their operations in alignment with the Belt and Road Initiative's deepened integration.

SEZs: The crucible of cooperation

SEZs are the physical platforms where this strategic alignment will be tested. Their success hinges on Pakistan's ability to provide:

1. Regulatory stability: Clear, consistent policies are critical to assure Chinese investors whose long-term planning cycles are synchronized with China's five-year plans.

2. Skilled workforce: Vocational training, ideally developed in partnership with Chinese institutions, is needed to prepare a workforce capable of meeting the demands of advanced manufacturing and robotics.

3. Local integration: Ensuring local small- and medium-sized enterprises can participate in the supply chains of Chinese firms will be key to inclusive growth and long-term partnership stability.

4. Reliable energy and logistics: Industrial-grade, preferably renewable, energy and efficient transport are non-negotiable for the high-value production envisioned.

A foundation for the next phase

The 2025–2029 Industrial Cooperation Action Plan provides a blueprint for Pakistan to evolve from a transit corridor into a competitive, integrated node in regional value chains. For China, it establishes Pakistan as a reliable partner for securing supply chains, accessing critical resources, and fostering technological collaboration in a key region.

A transformative decade ahead

The action plan marks a pivotal moment for CPEC. The success of next decade will be measured not in kilometers of roads, but in industrial output, technology absorption, and human capital development – metrics that resonate with China's own development agenda. 

If both nations sustain this momentum, CPEC will evolve from a corridor of transit into a corridor of transformation, firmly embedding industry, innovation, and shared prosperity at the core of a partnership aligned with the strategic trajectory of China's future.