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Discourse on the once-shiny CPEC initiative has arguably become dismal in Pakistan the last one year. As with rest of the economic discourse among the public, the current somber mood on CPEC is most likely an overreaction. Just as it was a cheerful exaggeration when CPEC was being championed some years ago as the magic tonic for all that ails this country.

It’s not all gloom and doom, though. CPEC is neither a Trojan horse now; nor was it a messiah circa 2016. Broadly, the initiative seems to be on track. Step one was plugging energy and infrastructure gaps – there is some notable progress in those two bottlenecks. Many of these projects are completed and some are under completion. There is, however, a visible slowdown in fresh Chinese financing.

But the slowdown is likely linked more to Pakistan’s project financing and import capacity than its new government’s past soft criticisms over CPEC last year. The PTI government is now eager to start the next phase anyway. That will take CPEC towards industrial cooperation (mainly SEZs) and market access (including the revised Pak-China FTA). This phase will require time to level up, and it is taking time.

For one, Pakistan itself is undergoing a tough phase of economic stabilization; there has to be progress on the structural reforms that are needed to avoid the boom-bust cycles in the future. And CPEC cannot thrive in a sputtering economy. In addition, China also seems to be calibrating its development approach in line with the early experience of its Belt and Road Initiative (BRI) in different countries.

However, both countries seem committed to commence the phase-2 as early as possible. The Chinese foreign minister was in Pakistan earlier this month where he underscored CPEC’s leading role in the BRI plan. The dignitary received assurances from the top leadership that CPEC projects would finish on time. PM Khan underlined the need for Chinese companies to bring investments in the industrial sector.

For its part, the government is addressing outstanding issues. For instance, the ECC recently approved amendments in clauses relating to income tax, sales tax and customs duties so that exemptions contained in the Gwadar Port Concession Agreement can be made into law. These exemptions, which will reportedly last until 2039, will be legalized either through an ordinance or an act of parliament.

After some gap, a CPEC Review meeting was held in Islamabad two weeks ago where Chinese ambassador reportedly said that CPEC was heading in right direction. Pakistan reportedly assured China of progress in areas like tariff approval for Gwadar 300MW power project, new master plan for Gwadar city, expedited work on Gwadar Eastbay Expressway, and inauguration of Multan-Sukkur Motorway.

Meanwhile, the federal government looks committed to the idea of forming a CPEC Authority. Currently, the proposal is reportedly going through administrative structuring and legal vetting. This proposal has received its share of criticism from internal and external stakeholders. But the need to streamline the projects, policies and bilateral exchanges that mark various aspects of CPEC cannot be denied.

Based on recent developments, it appears that both sides are trying to invoke some rigor into this bilateral cooperation of significance. There are, however, challenges related to local financing and timely implementation. For that, much depends on how CPEC is modeled from here on. In that context, an informed discourse on CPEC would avoid amplifying the slowdown that is visible to all.