Daily Times

Since the 1963 Sino-Pakistan agreement which settled the boundary shared by the two countries, Pakistan and China have been close strategic partners. Both countries entered the 21st century intending to become all-weather economic partners through a series of trade agreements and Memorandums of Understanding (MoU).

This plan took an interesting turn in 2015 when relations between the two countries took on a new dimension through the China-Pakistan Economic Corridor (CPEC) project. Today, CPEC is a well known but poorly understood project due to a number of underlying strategic challenges and governance concerns. CPEC’s success is subject to these challenges and Pakistan needs to address these issues on a priority bases. However, the entire regional scenario must be understood first.

CPEC is a part of The Belt and Road Initiative (BRI), a modern and more inclusive version of the ancient Silk Road — a network of trade routes across Eurasia which connected the East and West. The initiative to build the Silk Road was taken by the Han Dynasty around 200 BC. It provided routes for trade from 130 BC till 1453 AD, when the Ottoman Empire closed these routes and banned trade with the West.

The BRI consists of six economic corridors which cover more than 65 countries across the globe, accessing over 60 percent of the world’s population. Pakistan is just one of these countries but has the strategic advantage of being located at a strategically significant location. However, this also makes Pakistan one of the most vulnerable players in this game. If this country is to reap maximum benefit from CPEC, the Pakistan government will have to resolve various domestic and regional conflicts. This will be complicated by the bi-directional nature of these conflicts.

China’s motive behind this multi-billion initiative is multifaceted: utilise and export the excess capacity in key industries like infrastructure and high-value products while gaining economic and political dominance and paving a path for sustainable development in China.

China is exporting infrastructure services through BRI related construction and building projects of several economic corridors and Europe is the target group to whom China can export its high-value products. The mission is to use these road, rail and sea infrastructure networks to open a gateway to Europe and the Middle East.

If China cannot access Central Asia or Europe via CPEC, the corridor will lose its significance. However, access to Central Asia from Pakistan is not as easy as it looks on the maps because of Pakistan’s complicated relationship with Iran and Afghanistan

The role of the Middle East is critically important, because 80 percent of China’s current oil imports are transported from the Middle East to Shanghai via the Strait of Malacca. Not only is this route very long, it poses serious security threats in the Strait of Malacca. Once the Gwadar port becomes fully operational, it is estimated that the distance China’s oil imports will have to travel will be reduced to less than 5,000 km.

If China cannot access Central Asia or Europe via CPEC, the corridor will lose its significance. However, access to Central Asia from Pakistan is not as easy as it looks on the maps because of Pakistan’s complicated relationship with Iran and Afghanistan.

Pakistan is not on good terms with the Afghan government due political disagreements and the prevailing law and order situation in the Pak-Afghan border regions. China is playing its role to initiate dialogue with the Taliban and resolve strategic conflicts between the two parties. So far, it has not been successful to bring peace in Afghanistan, despite the quadrilateral talks between Afghanistan-China-Pakistan and USA.

The reason behind this unsuccessful attempt is the rigidness and conflicting interests of the participating countries. One economic factor that is responsible for this rift between Afghanistan and Pakistan is Kabul’s insistence that it will not provide access to Central Asia unless Islamabad allows them to have free trade with India via Pakistan.

With no solution to these conflicts in sight, and project deadlines approaching ever closer, China seems to be growing anxious about Pakistan’s ability and performance in this regard. Newly appointed Chinese Ambassador Yao Jing communicated these concerns to Pakistani Parliamentarians during the 26th In-Camera meeting of the Parliamentary Committee on CPEC. A number of China’s key reservations were highlighted during this meeting, including litigation issues, corruption scandals in CPEC projects and lags and delays due to bureaucratic procedures in the commencement of the Gwadar city development project.

Gwadar city holds the most significance for China; the other projects are merely supplemental. Beijing advised Pakistan to execute massive legal reforms that would help in accelerating the performance of these ongoing projects. Chinese media did not hesitate in pin-pointing the weaknesses of its Iron Brother. But when one Iron brother is spending billions of dollars on the other one, its critical evaluation of the party at the receiving end is justified.

The outcome or net gain for Pakistan depends on many ‘ifs’ and ‘buts’ and each one of them cannot be addressed in isolation because they are a result of a combination of issues including: regional peace, conflicts between federal and local authorities, provincial and ethnic friction, issue of corruption, good governance, economic evaluation of projects and transparency. Pakistan needs to resolve these issues because time is running out.

The writer is a PhD scholar at University of Bremen, Germany

Published in Daily Times, February 18^th 2018.