China-Pakistan Economic Corridor

 By Prachi Bhardwaj
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In the wake of the Presidential ordinance; promulgating on ensuring the timely completion of the ‘so-called’ China-Pakistan Economic Corridor (CPEC) and its related projects, in Pakistan, along with the contrasting media speculations of the slow-down of the projects it becomes instrumental to re-visit the progress of CPEC, so far. This article will briefly delve into the vision- China and Pakistan’s behind CPEC, its current status, along with stance of India as conjecture of new significant players joining the project arise, that India views as ‘illegal.’

De-Coding “China-Pakistan Economic Corridor:” A Critical Analysis

Home to approximately 25% of the world’s population,[1] South Asia, lacks cooperation and connectivity[2] impeded to divergent factors; political turmoil and regimes, turbulences from conflicts- ethnic or religious, economic regulations and barriers, weak infrastructures. It is reported that the total goods trade within South Asia amounts to mere $23 billion, although in accordance to the gravity model it can swell to worth $67 billion. One shackle to the growth is transportation and logistical infrastructure that causes such inefficiency.[3] The One Belt, One Road (OBOR)[4] Initiative was conceptualised to connect economic circles from one end to economic circles on the opposite end of the world, that is through enhancement of geographical linkages,[5] the same that are missing from South Asia. A flagship project under the umbrella of OBOR is the CPEC, which has been called the binding force between Pakistan and China.[6]

The CPEC aims to connect- business and co-operation, and build an integrated region of shared destiny, harmony and development.[7] But who gets to decide what is the nature of development- the two governments or people of Baluchistan, Gilgit-Baltistan or the Uyghurs? The idea of shared destiny is dictated by who- China or all stakeholders alike? Is CPEC creating harmony in the region or just distancing the two largest populous democracies- India and Pakistan?

Current Status:

CPEC is a multibillion-dollar connectivity project, based on a 1+4 cooperation structure; with economic corridor at the epicenter, and other assets- Gwadar Port, Energy, Infrastructure and Industrial Cooperation. Despite China’s narrative of CPEC having purely economic objective, it becomes difficult to refute having strategic and political ramification for the region when there is an expansion of military to ‘protect investments,’[8] ambiguity and no transparency in finances and projects, conflicts in Baluchistan and PoK, amidst ‘China first’ policy and a ‘mixed credibility’ as a loaner and collector. Even with uncertainties and potential unviability of projects CPEC was sanctioned. The planning commission of Pakistan had outlined three phases for development of CPEC: –

Phase I- addresses Pakistan’s social and economic bottlenecks.

Phase II- aims at implementation of projects- SEZs, industrialisation, tourism and other ventures.

Phase III- aims to stimulate and sustain growth in regions of South Asia and Central Asia through CPEC.

Recently, the Prime Minister Imran Khan, had inaugurated a coal power plant in the resources-rich province of Baluchistan, marking the successful transition to Phase-II with news of introducing new projects.[9] However, many have observed the slowing of momentum with the projects, part due to economy- Pakistan’s debt and stagnant economy, and part owed to the tug of dominance of US-China.[10] Although after recent visit to Beijing by PM Imran, there is exhaustive rejection of the perceived slow-down, much like claims of Chinese attempts to colonise Pakistan by stripling in a debt-trap.

After studying the progress of CPEC, Wolf classified it as a ‘Narrow Regional Corridor,’ that hardly has the potential to become bigger than a corridor for transport and logistics meant to exported goods from China and import materials to China.[11]

Noting the magnitude of challenges- domestic and international- are vital, from failure of opacity in financials and creation of national consensus, lack of transparency- fiber optics and underground tunnels, the projects enforcing- asymmetries and discrimination, question of sovereignty- PoK, skewed one sided economy- Chinese labor, resource and planning, etc. Until the challenges aren’t addressed, CPEC will have no positive ‘spill-over’ from the core to periphery and unable to be the ‘game-changer’ for Pakistan economy and a gateway for China to the Indian Ocean and Central Asia.

That said, CPEC has the potential of transitioning to ‘Broad Regional Corridor,’ if cross border economic zones are introduced, with multi-modal infrastructures. Is there scope of expansion with the CPEC projects?

Possibilities of Expansions?

Does the CPEC Projects potentially serve as an engine for further regional cooperation and integration—beyond the Pakistan-China nexus? With regards to South Asian states the expansion of CPEC seems far-fetched, on the contrary with nations like- Iran, Afghanistan, and Russia there might be potential as the reports speculate. With peace-making talks in Afghanistan, India’s U-turn with Iran policy, clubbed with Pakistan PM visit to Iran, deepening cooperation transnationally in the Northern, Western and Southern side, constructed off of the original CPEC, that will expand CPEC with the nations of Central Asia, West Asia (Mideast) and Africa through the models of N-CPEC+, W-CPEC+ and S-CPEC+ respectively can be a reality.[12]

The Chinese Ambassador to Pakistan, Yao Jing, remarked adding girth to the speculations, ‘CPEC will not only connect China with Gwadar, but it will also lead to Kandahar, Afghanistan, Central Asia and Russia as well. Gwadar is an emerging port of Pakistan, which is a long-awaited dream of Pakistanis and their government.’[13]

India is a direct or indirect stake-holder with all the nations above that can in the future associate and expand the CPEC initiative in this globalised world, what should the Indian stance be in case these expansive models come to fruition?

Indian Response:

India has explicitly observed its reservations on CPEC, while on whole of OBOR initiative it has remained passive. This lack of enthusiasm on Indian counterparts with OBOR, according to Hai Xiao, is owed to “…craves for benefits from China’s economic rise, at the same time hold prominence in the region.”[14] He further comments that the Indian strategy will in the long-term hinders India’s development. If India joins the CPEC the projects will develop into a ‘strategic cooperation economic belt’ that will be multi-win.

Although, one factor that scholars seem to undermine is that of India’s undisputed right over sovereignty over the territory of Pakistan occupied Kashmir (PoK), the flagship project goes through large section of the PoK territory even without taking into confidence the territorial integrity of a neighboring country. Further, by CPEC, China “seems to solidify and legitimise”[15] Pakistan’s illegal claim over the territory, and Aksai Chin has already been claimed by themselves. In light of this, how can this project harness ‘mutual benefits’ and ‘regional harmony’ as it aims to. Although, the narrative in India on the debate of CPEC has seen, ‘opponents’ and ‘proponents.’

Even if, India willingly attempts to collaborate with China and Pakistan, are the invitations to join genuine or, ‘superficial invitations?’ The latter seems to much truer. Both Sino-Pak has heightened their collusion which can only pose as a growing threat to India.[16] Maybe it is time for India to revisit its stance taking into consideration the evolution of CPEC as a potential international venture that will cease it as the supposed bilateral-initiative between China and Pakistan. Will this result in Sino-India relations to be strained?

Concluding Remarks:

Robert Kaplan had predicted that Sino-India would become rivals in the Indian Ocean given situations of energy security and geopolitics. Objectively, it comes off as true with China-Pakistan axis seems to be growing and intertwining socio-politically, economically. For the government of China, Pakistan is “…top priority as far as its peripheral diplomatic strategy is concerned.”[17]But the axis has its limitations- temporary FAFT ‘grey-listing’ of Pakistan.[18] Therefore, subjectively India-China are still one of the largest trade partners. There needs to be an exhaustive dialogue with stakeholders engaged with CPEC to vocalise its concern, and reiterate India’s right over the land. Also, India needs to re-examine its foreign policies with Afghanistan, Iran and Russia if the scope of CPEC is enlarging.

The dimensions of CPEC seem to be changing; which is why dialogue on feasibility of the project is vital. Afterall, a stable- socially and economically- Pakistan will benefit the South Asian region, not only India. In recent times, China has wished to build an image as a custodian of a responsible actor in the international arena, in case there is failure of CPEC or the reservations of it pushing Pakistan into a debt-trap, China can very well lose its credibility.

In light of these developments, if and when, India wishes to re-visit its stance, there are certain less scrutinised aspects of BRI, invariably CPEC that needs to be paid attention to- China’s Beidou satellite navigation system, role of Pakistan as it granted access to the system’s military service. In addition, there is the question of China dominated ‘dispute resolution mechanism,’ with underlying issues of Sinicization and promotion of ‘Chinese Standards’ across the globe. The potential of China, to institionalised Pax Sinica through CPEC is a likely possibility, which is why India must attempt to have a Constructive Approach than a rather Conventional Approach, that is to carry forward and forge new alliances along with exercising restraint, and seek opportunities. One aspect of India’s foreign policy that can be capitalised is that of ‘swing power.’

References

[1] The exact population size is 24.87%. (Worldometers 2019)

[2] The ‘Infrastructure Financing in South Asia’ states for the region to sustain its growth and tackle climate change, it needs to invest approx. 9% of its gross domestic product on infrastructure until 2030, the state of India alone will require $260 billion worth of investment. (Jha and Arao 2018)

[3] It is stated that the formal trade between India and Pakistan could become 15-fold. (Kathuria 2018)

[4] Although the previously known One Belt One Road initiative (OBOR) was rebranded as Belt and Road Initiative (BRI) the Chinese equivalent remains the same, ‘Yi Dai Yi Lu,’ therefore acronym of BRI will be henceforth termed as OBOR.

[5] (BRF 2017)

[6] Pakistan Foreign Minister Shah Mehmood Qureshi said that the CPEC was a binding force between Pakistan and China (PTI 2019)

[7] (CPEC Secretariat n.d.)

[8] The Special Security Division (SSD) that comprises of 9,000 Pakistan Army soldiers, also 6,000 para-military forces has been set up for the purpose of security of Chinese workers and the investments of the CPEC project.

[9] There are 27 new projects that will be introduced within the phase II of the CPEC projects. (Diplomat 2019) (PTI 2019)

[10] (Reuters 2019)

[11] (Wolf 2019)

[12] (Kobyko 2019) (Korybko 2019)

[13] (Report 2019)

[14] (Haixiao 2017)

[15] Statement by former National Security Advisor, SS. Menon. (Bhattacharjee 2017)

[16] (Ranade 2017) Retracement of Chinese Ambassador opinion

[17] (Zhaoli 2017) India by the

[18]  The Financial Action Task Force (FATF) has urged Pakistan to complete its action plan by February 2020 with regards to combat terror funding and money laundering and until then it will remain on the ‘grey list.’ (Khan 2019)