China’s population is shrinking and aging. This demographic shift leads to fewer workers and falling employment rates. Additionally, household spending in China remains low, which impacts overall economic growth. In 2025, China’s fixed investment turned negative, signaling deeper issues within its economy.

The CPEC initiative has seen significant investment from China. An estimated $25.9 billion has been invested in large transport and energy projects under this initiative. President Asif Zardari’s recent visit to China aimed to attract further Chinese investment and expand trade between the two nations.

As both countries adapt to these changes, the semiconductor industry plays a crucial role. China is focusing on self-reliance in this sector due to US export curbs on advanced chips. Currently, China has captured a roughly 30% share of the global market for legacy chips. However, experts indicate that achieving chip self-sufficiency remains a significant challenge.

Key insights from recent discussions:

• Commentators note a deliberate shift towards sub-national diplomacy, where provinces act as engines of trade and technology transfer.
• Ambassador Mansoor Ahmad Khan highlighted that China is significantly affected by its oil imports originating from Iran or transiting through the Strait of Hormuz.
• Experts like Ryu Yongwook emphasize that while Beijing aims for chip self-sufficiency, it is far from achieving this goal.

The long-term impact of China’s economic slowdown on global trade is unclear. Whether Pakistan’s evolving economic ties with China will lead to a full-scale revival of CPEC also remains uncertain. As both nations navigate these challenges, they will need to reassess their strategies in light of changing geopolitical dynamics.

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Before this development, expectations for trade cooperation were high but lacked tangible progress. The backdrop of the China-Pakistan Economic Corridor (CPEC) set a promising stage for collaboration.

During his visit, Zardari met with leaders from SANY Heavy Industry. He promoted collaboration in construction machinery, digital manufacturing, and clean energy. SANY reported an impressive operating revenue of 11.27 billion US dollars in 2024, showcasing its robust position in the industry.

Zardari also invited Hunan Party Secretary Shen Xiaoming to visit Pakistan for the 75th anniversary of diplomatic ties. This invitation underscores the commitment to deepen bilateral relations. Yet, it also highlights the need for ongoing dialogue and partnership.

In addition to industrial technology, Zardari discussed agriculture, health, education, and trade with Hunan leaders. His focus on agro-processing and value addition at Hunan Tea Group reflects a strategic approach to economic growth.

Zardari emphasized joint ventures and skills development as essential components for advancing industrial cooperation. Such partnerships can significantly support Pakistan’s infrastructure and industrial growth.

Mao Weiming of Hunan stated that his region would continue to contribute to the development of CPEC 2.0. This commitment suggests a long-term vision for collaboration that could yield substantial benefits for both nations.

This week-long trip is not just about immediate gains; it sets a foundation for future cooperation under CPEC. The outcomes of these discussions may pave the way for enhanced trade relations between China and Pakistan.

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