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PacNet #28 – CPEC decoded—Navigating domestic conundrums and external quandaries

Written By

  • Irfan Ul Haq Senior Research Fellow at the University of Kashmir, Srinagar India


South Asia stands on the cusp of a geopolitical metamorphosis. Historically, this region is a melting pot of diverse cultures, religions, and languages and has always been a focal point for empires and superpowers. The end of colonialism, Cold War politics, and the rise of regional powers shaped its post-colonial trajectory, resulting in a blend of cooperation and contention.

In recent decades, the strategic calculus of South Asia has been influenced by the ascendance of China as a global power. Beijing’s economic might and strategic ambitions drive it to seek partnerships and avenues that intensify its influence. One such partnership, forged in the crucible of mutual interests and regional politics, is with Pakistan. The two nations, often referring to their relationship as “deeper than oceans and higher than mountains,” have converged in their regional and global aspirations.

Enter the China-Pakistan Economic Corridor (CPEC), a flagship project that encapsulates this alignment of visions. More than its impressive infrastructure designs and economic projections, CPEC testifies to the evolving dynamics of South Asia. It is not just about highways, ports, and pipelines; CPEC represents a strategic pivot, a realignment of regional priorities. It is an opportunity for China to ensure energy security, bypass traditional chokepoints, and gain a foothold in the Indian Ocean region. For Pakistan, it promises economic revitalization and reaffirms its strategic relevance. However, while CPEC’s blueprints suggest seamless connectivity and mutual benefits, the project is embroiled in layers of geopolitics. Its pathways cut through contentious terrains, its ports overlook critical sea lanes, and its existence poses questions for other regional stakeholders.

The genesis of CPEC: A marriage of convenience

CPEC represents the epitome of Sino-Pak collaboration. This initiative, linking the Maritime Silk Road with the Silk Road Economic Belt, is intended to usher in a new era of trade and connectivity. With Beijing assuming the reins of the Gwadar Port in 2013, China signalled its maritime ambitions in the Indian Ocean. President Xi Jinping’s monumental 2015 visit to Pakistan translated into pacts totalling a staggering $46 billion originally, underscoring the project’s economic magnitude. However, the value was increased to worth $62 billion in 2020. In 2022, Chinese investment rose to $65 billion. This flagship project entails developing a long road and rail corridor to boost regional connection and convey goods, resources, and ideas between these two vital regions.

The undercurrents and strategic leverage: India’s apprehensions

From an Indian vantage point, CPEC is not just about infrastructure. Its trajectory through Pakistan-occupied Kashmir, challenges India’s territorial sovereignty. Beyond the territory, the broader question of China’s ambitions is encapsulated in the “China Dream.” India sees the project as part of China’s strategy to gain a stronghold in the region, thereby tilting the balance of power. Furthermore, CPEC’s alignment through the disputed region of Gilgit-Baltistan in Pakistan-occupied Kashmir is not just a matter of territorial integrity for India but of strategic leverage for China and Pakistan. This region is a fulcrum upon which several geopolitical interests pivot, making CPEC’s journey a hotbed for potential confrontations.

China’s balancing act: Economic ambitions vs. security concerns

Pakistani hopes, pegged on CPEC, are counterbalanced by the challenges emanating from Baluchistan. Though mineral-rich and home to the strategic Gwadar port, the province is a cauldron of socio-political unrest. Insurgencies and grievances against Islamabad’s policies have often led to violent confrontations, casting shadows on the corridor’s prospects.

China’s initial fervour for CPEC was evident, but the enthusiasm faced reality checks. With Pakistan’s changing political and security scenarios, Beijing has had to recalibrate its strategy and expectations. Ensuring the safety of its workers and securing returns on its massive investments remain at the forefront of China’s concerns.

The corridors of power in Washington have been abuzz with discussions on CPEC. Viewing it through the prism of global power play, the US sees the Belt and Road Initiative as a means for China to stamp its dominance. The “debt trap diplomacy” narrative underscores these suspicions, which allegedly allow China to gain access to Pakistan’s strategic assets. China’s growing strategic assets, like the Hambantota port in Sri Lanka, have further fuelled these apprehensions.

Conclusion and the Way Forward

CPEC represents a significant opportunity for economic development and regional connectivity. However, to maximize its benefits and address potential challenges, key policy recommendations can be made for the countries involved. For Pakistan, it is essential to strengthen governance and transparency mechanisms to ensure that CPEC projects effectively benefit local communities and the broader economy. Emphasizing skill development and technology transfer can further enhance the long-term positive impacts of CPEC on Pakistan’s economy. China, as a major player in the initiative, should encourage its companies involved in CPEC to adhere to international standards for environmental protection and labor rights. Additionally, fostering greater cultural and educational exchanges between China and Pakistan can deepen people-to-people ties and enhance mutual understanding. India could consider engaging with China and Pakistan on CPEC-related projects to ensure that regional connectivity benefits all countries in the region. Simultaneously, India could focus on developing alternative trade routes and infrastructure projects to enhance its connectivity with Central Asia and beyond. For the United States, it is crucial to monitor CPEC developments closely to assess their implications for regional stability and security. Exploring opportunities for collaboration with China and Pakistan on infrastructure development projects that align with US interests and values could also be beneficial. While CPEC holds promise for economic growth and connectivity, addressing governance, transparency, and environmental concerns is essential for ensuring its success and contribution to sustainable development and regional stability.

Having said this, in this complex web of interests, alliances, and contestations, CPEC emerges as more than a project; it becomes a barometer for the future of global geopolitics. As nations jostle for influence, partnerships, and security in the 21st century, corridors like CPEC will shape the destiny of nations involved and redraw the broader contours of international relations. Therefore, it is imperative for stakeholders to strengthen governance, ensure transparency, and promote sustainable development practices to maximize the benefits of CPEC for all involved parties. This approach would not only enhance economic growth and regional connectivity but also mitigate concerns related to environmental impact, debt sustainability, and geopolitical stability. By embracing these principles, countries such as India, China, Pakistan, and the US can turn CPEC into a model of cooperation and development, setting a positive precedent for future infrastructure projects in the region and beyond.

Dr. Irfan Ul Haq ([email protected]) is Senior Research Fellow at the University of Kashmir, Srinagar India.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Chinese workers pose for a picture with Pakistani soldiers at a ceremony to open a pilot trade project in Gwadar port, November 13, 2016. Aamir Qureshi—AFP/Getty Images

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