The idea of economic corridor was given by China in 2013 to reconstruct the ancient trade and transport routes according to the need of 21st century. In April 2013, Chinese President Xi Jinping addressed to Boao Forum and stressed upon regional connectivity of Asia with rest of the World and urged that China will take active part for regional connectivity. China wants to connect its economy with Europe, Central Asia, Russia, South Asia, Persian Gulf and with ASEAN countries, Indian Ocean and Southeast Asia. The current trade routes are functional for a long time in spite of wars time to time but now these trading routes needs reconstruction according to the present day context of 21st century.
In 2010 China declared Kashghar an important transit route on the ancient silk route and an entrance point between Pakistan and China CPEC will be along the Karakorum highway which was constructed in 1970. China import 6.3 million barrel oil from the Middle East, from the Strait of Malacca by covering a distance of 9912 miles which accounting for 80% of Chinese oil needs. China spends $18 million per day for transportation cost and shipment charges for this imported oil annually spend $6.5 billion.
If China is connected by Arabian Sea at Gwadar from Khunjrab by a corridor then the distance will be cut short only 2295 miles to Western China and 3626 miles to central China and transportation cost and shipment charges will come down to one-third of current level. If China uses CPEC for its 50% oil supply then it will save $2 billion annually.
Chinese interest in deep water Arabian Sea increase in 1998 and 2002 during construction of Gwadar Port which was completed in 2006 by China. The current form of corridor was firstly purposed in a meeting among President of Pakistan Asif Ali Zardari, Chinese Prime Minister Li Keqiang and Prime Minister of Pakistan Mian Muhammad Nawaz Sharif in Islamabad in President House on 22 May 2013. In February 2014 President of Pakistan visit China to finalized the CPEC projects. After two months Prime Minister of Pakistan met with Chinese Prime Minister to discuss issues on CPEC. In April 2015 Chinese President Xi Jinping visit Pakistan in this regard and on 20th April 2015 Pakistan and China signed an agreement to commence work on CPEC a $46 billion project.