We (the authors) had the opportunity to take part in an International Academic Symposium on the China-Pakistan Economic Corridor (CPEC) held at Peking University, from May 21 to May 23, 2015. Scholars from both China and Pakistan shared their views on the CPEC. This article tends to identify certain opportunities offered by the CPEC. However, the proposed corridor is not without inherent and situational challenges. What are the potential benefits of the proposed corridor? What are the challenges that may hinder the development of the corridor? To what extent will Pakistan be capable enough to overcome these challenges? How do regional and international players view the proposed project?
China-Pakistan friendship has a long history of mutual cooperation. In 2006, the two countries signed the Free Trade Agreement (FTA), which came into practice in 2007. Since then, China has been trying to make itself visible in Pakistan’s economic sector. Parallel to this the governments of the two countries have been mulling over direct, unhindered road connectivity. The idea that turned into the CPEC was initiated by then military ruler General Pervez Musharraf. A formal memorandum of understanding (MoU) was signed in July 2013 to construct an economic corridor by linking Kasghar with Gwadar through Gilgit-Balitistan and the four provinces of Pakistan.
Infrastructuraly, under the terms of the CPEC, China will construct a 4,000 km long railroad network from Kasghar to Gwadar along with the construction of 12 to 13 special economic zones along the proposed corridor. Initially, the cost of construction of the economic corridor was estimated to be between $ 18-20 billion but was raised to $ 32 billion. The sectoral priorities of the project vary from the transport and communications sector, energy sector, investment and industry sector to people-to-people cooperation. China intends to link the CPEC with other regions such as Afghanistan, Iran, the Central Asian States to the west of Pakistan and (in the long run) with India to the east of Pakistan. It is expected that the CPEC will benefit over three billion people in the region.
The short-term goals of this project, referred to as ‘early harvest’, have a timeframe of up to five years for completion, while the long-term goals will take 10 to 15 years for completion. The short-term goals are specific in nature like the construction of a railway track from Havalian to Abbottabad to Xinjiang and the construction of a motorway between Lahore and Karachi. In addition, it also envisages the construction of a coastal highway between Karachi and Gwadar, and the construction of Gwadar airport among other projects.
In this respect, the CPEC is an alternative energy route to states like Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan. These countries are most dependent on Russian oil and gas exports through the Black Sea. People from across the region can be (in)directly employed in activities related to the corridor. Similarly, the corridor can benefit the Persian Gulf, particularly Oman. These states can conduct trade with China and the Central Asian Republics. The corridor will also provide showcasing services, trans-shipment, storage, transportation and manufacturing for Pakistan and China to the world market. Besides, different sectors such as banking, travel services, electrical, recreational and shipyard will flourish. Besides its enormous economic benefits, the CPEC serves the geostrategic interests of the two countries. The physical proximity of Xinjiang with Pakistan and the durability of Pakistan-China relations are the foremost facilitating factors in the provision of strategic choices for both Islamabad and Beijing.
Having outlined the economic and strategic opportunities, we now turn to the challenges in this respect. They are broadly of two types: internal and external. Internally, the 18th Amendment has transferred a lot of powers to the provinces. This has made it harder to develop consensus on vital national issues such as the CPEC. Both Balochistan and Khyber Pakhtunkhwa have expressed reservations over the proposed new route of the corridor, which may endanger the construction of the project. Moreover, the poor law and order situation in these provinces is another hindrance for the smooth functioning of the corridor. In addition, Pakistan’s unstable political system carries the potential to delay the implementation of the CPEC. Last year’s long sit-in is a case in point. Furthermore, since Pakistan’s governments have historically signed numerous MoUs with China and other countries; how many of them have been (or will be) accomplished is still to be seen. Besides, the proposed economic corridor project should be mindful of ecological concerns.
Externally, the CPEC has the potential to engage India and Iran competitively. Growing Indo-US relations after the nuclear deal and the growing Indo-Iranian influence in Afghanistan may be a cause for concern for both Pakistan and China. In order to secure its economic and strategic interests, India has developed closer relations with Iran and Afghanistan. India is developing the Chabahar port in Iran to get easy access to the Central Asian States. Pakistan and India are also competing for influence in Afghanistan in the wake of the US’s exit. Moreover, the US may join the Indo-Iranian nexus to encircle China in the long run. The former’s surveillance plane alerted Beijing the other day as far as the South China Sea is concerned.
Besides, Russian influence in the Central Asian republics may also be counted as a strategic concern for Moscow believes in the status quo with respect to the construction of a new pipeline in the Caspian region. Russia also enjoys monopoly over the existing routes from Caspian to Europe and beyond. The construction of new pipelines in terms of the CPEC and related economic corridors may challenge Russia’s monopoly. Experts in the US have already started referring to China’s cooperation in the corridor as China’s string of pearls strategy, which refers to China’s Sea Lines of Communication (SLOC). This strategy extends from mainland China to Pakistan, extending to the straits of Malacca, straits of Hormuz and straits of Ba-el Mandeb. Thus, the divergent and conflicting interest of different states in the region is one of the challenges to the construction and success of the CPEC.
To conclude, the CPEC is of vital national and regional interest, and can alone become a game changer for Pakistan and the (South) Asian region, at the least. It is incumbent upon the government of Pakistan to act beyond political exigencies to address internal challenges and be vigilant of external involvement. There is no iota of doubt, in our view, about China’s unflinching commitment in this respect.
Dr Ejaz Hussain is an independent political scientist and the author of Military Agency, Politics and the State in Pakistan. He tweets @ejazbhatty. Dr Ghulam Ali is a postdoctoral fellow at Peking University, Beijing. He can be reached at [email protected]