The China-Pakistan Economic Corridor (CPEC), once heralded as a transformative infrastructure initiative and a cornerstone of China's Belt and Road Initiative (BRI), is now drawing mounting scrutiny over its financial performance, implementation failures, and strategic costs — for both Pakistan and Beijing, according to a report by the European Times. The analysis, cited in reports from New Delhi on 13 September 2026, paints a stark picture of a corridor that promised prosperity but has delivered deepening economic strain.

Financial Burdens Mount on Pakistan

Several CPEC-linked projects have proven expensive while failing to generate the anticipated economic returns, according to the report. Liabilities tied to CPEC-backed power projects have risen sharply, reportedly exceeding Rs 543 billion (Pakistani rupee) as of March 2026 — even as Pakistan continues to grapple with persistent energy shortages. The original $46 billion CPEC framework itself remains clouded by uncertainty, with questions surrounding the actual value and scope of financial obligations still unresolved.

Pakistani officials have reportedly sought more favourable debt-repayment arrangements from Beijing, but substantial concessions have yet to materialise. This comes amid Pakistan's worsening fiscal position, which has made servicing CPEC-linked loans increasingly difficult.

What the Report Said

The European Times analysis captured the frustration on both sides. 'While Pakistanis are frustrated by the poor performance and incapabilities of the CPEC projects to generate returns, the Chinese are worried about the repayment of huge CPEC loans amid the exacerbating financial condition of Pakistan,' the report noted. It further observed: 'So, what once was portrayed as the herald of modern infrastructure, the CPEC has itself become a source of economic difficulties.'

Gwadar Port: Flagship in Distress

The difficulties are most visible at Gwadar Port, considered the jewel of the CPEC project. Despite being projected as a major regional trade and logistics hub, Gwadar continues to lag behind expectations. According to the report, infrastructure gaps, civic shortcomings, administrative hurdles, policy inconsistencies, financial constraints, and local opposition have collectively stalled its development. Several other CPEC-linked transport and infrastructure projects have faced similar delays for comparable reasons.

Notably, Gwadar remains central to China's broader economic and strategic objectives — including securing access to the Arabian Sea and reducing dependence on the Strait of Malacca. The port's underperformance therefore carries implications well beyond Pakistan's borders.

Strategic Stakes for China and the BRI

Beijing is reportedly concerned about the slow pace of CPEC projects, security challenges, and the limited returns on its investments. The stakes are high: CPEC is widely regarded as the flagship of the Belt and Road Initiative, and its struggles risk denting the broader BRI narrative globally. 'China may see the entire narrative built around the BRI come crashing down if CPEC fails, given that it is a flagship programme,' the report warned. This is particularly significant as China courts BRI partners across Africa, Southeast Asia, and Central Asia, where CPEC's trajectory is closely watched as a reference point.

Wider Implications and What Comes Next

The CPEC situation reflects a broader pattern critics have identified in debt-financed infrastructure under the BRI model — where host nations accumulate liabilities faster than projects generate revenue. Pakistan's case, analysts argue, is among the most acute given the country's existing debt distress and IMF dependence. Whether Beijing will restructure CPEC loans or hold firm on repayment terms is expected to be a key test of the partnership in the months ahead. How that question is resolved could shape not only Pakistan's economic outlook but also the credibility of China's infrastructure diplomacy across the developing world.