China-Pakistan Economic Corridor: Cautious Acceleration
(Baonghean.vn) - The China-Pakistan Economic Corridor (CPEC) project is considered to bring many benefits to both sides in terms of geopolitics and economics. After a period of stagnation, the project has accelerated again. However, to achieve the final strategic goal, China and Pakistan must make efforts to resolve many existing challenges.
REVIVAL OF INNOVATION
The China-Pakistan Economic Corridor (CPEC) project was announced in 2015 during the tenure of former Prime Minister Nawaz Sharif, with Pakistani officials excited about the potential success of the project. Pakistan's mainstream media was full of stories about CPEC. For a long time, the corridor lost momentum, and projects fell into a state of suspension, as Islamabad was concerned about accepting projects with high debt risks, while Pakistan was going through a serious and prolonged balance of payments crisis.
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| The China-Pakistan Economic Corridor (CPEC) is considered to bring many geopolitical and economic benefits to both countries. Illustration photo: Internet |
Recently, the CPEC story has once again revived and become lively again in the media ofPakistan. The $11 billion worth of CPEC projects recently signed include a $3.9 billion hydropower project in Pakistan's Kashmir region, and a $7.2 billion railway upgrade plan - China's most expensive project in Pakistan. Together with the establishment of a special economic zone in Pakistan's Faisalabad, these developments are expected to bring new energy to CPEC.
Beijingand Islamabad are pushing in the right direction to revive CPEC. While China previously blamed Pakistan's weak government for the project's implementation, Pakistan has now put aside its initial reservations and shown its determination to make a breakthrough. Pakistan has appointed a retired Lieutenant General as Chairman of the China-Pakistan Economic Corridor Authority (CPECA), despite criticism from the opposition.
CPECA allows the military to play a formal role in overseeing the projects involved, which will also serve the purpose of smooth running of CPEC projects in Pakistan. More notably, the current border tensions between China and India in Ladakh are also seen as a new impetus for CPEC projects in Pakistan.
During Pakistani Foreign Minister Shah Mahmood Qureshi’s brief visit to China in late August, both sides stressed that CPEC has entered a “new phase of rapid development.” They also agreed that the timely completion of planned projects under CPEC Phase 2 is one of the top priorities.
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| Pakistani Foreign Minister Shah Mahmood Qureshi (left) meets Chinese Foreign Minister Wang Yi during his visit to China in 2019. Photo: THX |
After a period of slowdown, CPEC has once again become Islamabad's top priority. Observers say that CPEC is back and stronger than ever thanks to both qualitative and quantitative developments. Pakistani officials clearly realize that CPEC is important for the country's economy, regardless of whether it will push Islamabad too far into Beijing's orbit or push Pakistan into a debt trap from loans.
Pakistan is an important gateway for China to access other regions.
CPEC is seen as a landmark element for Pakistan, and the implementation of the mega project will make Pakistan the largest cargo transit point in Asia along with Singapore and Shanghai. Pakistan is an important gateway for China to access other regions. Beijing believes that economic stability and security in its neighbor is a safe corridor for China to expand its influence in the world.
CPEC is an integral part of the “Belt and Road” initiative – a key initiative in China’s global strategy. Of course, CPEC is not without some challenges.
SECURITY AND POLITICAL CHALLENGES
Over the past few years, it has become clear that the Belt and Road Initiative has not only helped China-Pakistan bilateral relations to make progress, but it has also impacted Pakistan’s relations with neighboring countries, especially Iran. China has invested heavily in Pakistan, but Pakistan’s overall economic “health” seems to be a low priority for China. For example, the 18-page draft of the China-Iran economic and security agreement, if implemented, would have a significant impact on Pakistan. Beijing could spend $400 billion in Iran, much more than the investments it has made in CPEC projects.
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| Pakistani Prime Minister Imran Khan (left) holds talks with Chinese President Xi Jinping in Beijing, China, October 2019. Photo: AFP |
Tensions between Iran and Pakistan have been worsening with mutual suspicions. This raises the question of whether the China-Iran deal will push Pakistan and Iran further apart or bring them closer together under China’s wing. On the other hand, many say that Beijing is planning to develop ports in Iran, which will reduce the importance of the deep-water port of Gwadar, a key pillar of CPEC’s cargo transit.
With Pakistan's growing dependence on China, the US and India have drawn closer together.
Not only did Pakistan experience rifts with its neighbors, it also upset the United States by partnering with China. Independent analysts believe that with Pakistan increasingly dependent on China, the United States andIndiahave moved closer together. For Pakistan, both the US and China are important, and Islamabad needs to find a way to balance them. India, in particular, seems to want Pakistan to be divided between these two partners.
Serious obstacles to CPEC also lie within Pakistan itself, especially security, instability and the pervasive impact of terrorism. The biggest threat comes from Baloch separatist groups in Balochistan - the province where the deep-water port of Gwadar is located. These groups view CPEC as an anti-Baloch initiative because it allows foreigners access to Balochistan and changes the demographics to the disadvantage of the indigenous Baloch people. Therefore, Baloch separatists have targeted Chinese interests in Pakistan, such as attacking the Karachi Stock Exchange, which China owns 40% of, and attacking Chinese engineers and workers involved in the construction of CPEC.
Despite the thorny issues of regional geopolitical tensions and domestic security threats, CPEC is back in full swing. Can CPEC overcome these hurdles to succeed in Pakistan, or will the future of the initiative be sealed?!
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| Gwadar Port, Pakistan is a key pillar of CPEC. Photo: The Economic Times |
The reality is that the prospects of CPEC are huge, the advantages that the projects bring to China and Pakistan outweigh the obstacles. For Pakistan, CPEC at least has the potential to bring about desirable results such as providing jobs, better infrastructure, and energy security. More importantly, aiming at the goal of global connectivity, Pakistan will gain many benefits from CPEC such as diversifying forms of trade exchange, promoting domestic trade, expanding exports... It is a great opportunity that Pakistan will not want to miss.
CPEC is a test not only of Beijing’s grand strategy, but also of Islamabad’s influence in the region. What has changed now is that Pakistan wants to take advantage of this opportunity in a more cautious and patient manner. China, on the other hand, will closely monitor the situation in Pakistan and needs to better integrate its interests so that more and more Pakistani localities can benefit from CPEC./.