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More Troubles Along the China-Pakistan Economic Corridor

Oct 16 , 2014

On October 10, during a meeting of Pakistan Senate’s Standing Committee, a few members expressed reservations over the re-routing of the China-Pakistan Economic Corridor, threatening to hold demonstrations in front of the Chinese embassy in Islamabad. The news, in fact, comes with little surprise. In a country afflicted by long-lasting political troubles, an Islamist threat, and endemic energy shortages, China’s help is perceived as vital. Yet as short as the blanket is, China is requesting assurances and imposing conditions.

The China-Pakistan Economic Corridor (CPEC) represents a massive project comprised of a 2,000 km route connecting Pakistan’s Chinese-built port of Gwadar with Kashgar, in Xinjiang, but also rail links, special economic zones, dry ports and other infrastructures to be realized in Pakistan mostly with the help of Chinese soft loans. The Corridor strategy can be traced back to the 1960s as part of an attempt to develop Balochistan. The main cornerstones of the project were – and are – the Gwadar port and the trans-Pakistan pipeline, both later endorsed by General Musharraf’s regime. Partly following the route of the Karakoram Highway, the CPEC is thus meant to provide China with a new energy supply route, but also enhance trade and cooperation, thus redefining Pakistan as an energy corridor between South Asia, China and Central Asia. The Gwadar port in particular, eventually, will give China and entry point into the Arabian Gulf, thus widening its geopolitical influence and, possibly, military presence in the region.

The gesture of a few senators follows China and Pakistan’s decision to re-route the Corridor mostly through Punjab – Nawaz Sharif’s home province – and thus avoiding some of the country’s most restive areas in both Khyber-Pakhtunkhwa and Balochistan – where the Gwadar port is.

The decision to re-route the Corridor signals that security is the main obstacle to the realization of the project. Chinese ambassadors in Pakistan have repeatedly stressed the need for Pakistan to guarantee the safety of Chinese workers in the country, while the difficulties of conducting business in Pakistan has brought to the cancellation of several contracts, and to the delayed completion of many other projects. Perhaps the most notorious incident involving Chinese citizens in Pakistan is the 2007 kidnapping which led to the Lal Masjid (the Red Mosque) conflict. A year before, in 2006, three Chinese engineers were killed by in an attack claimed by the Baluchistan Liberation Army in Hub, a town west of Karachi. Since then regular incidents have threatened the good relations between the two countries, and led to numerous apologies and promises by the Pakistani authorities to their Chinese counterparts. Many have started to question the feasibility of the China-Pakistan Economic Corridor as well, often highlighting the troubles in managing the already built Gwadar port.

Political instability in Pakistan is another major concern for the realization of such mega-projects. In September Chinese President Xi Jinping’s visit to Pakistan was cancelled in light of the ongoing protests in Islamabad led by Imran Khan’s Tehrik-e-Insaf (PTI) and Pakistan Awami Tehrik (PAT). Officially postponed, the visit has not been rescheduled yet, while recently Pakistan Minister for Railways suggested that Prime Minister Nawaz Sharif could visit China in November to urge investments in infrastructure development programmes, thus highlighting once again how unbalanced this relation is.

China is also concerned with potential Islamist spill-over in its Muslim province of Xinjiang. Although, since the early 2000s, Beijing continuously evoked the Pakistan-based East Turkestan Islamic Movement (ETIM) – which was listed as a terrorist organization by the United Nations in 2002 – as responsible for most incidents in Xinjiang, it remains to a certain extent still unclear whether such organization effectively exists.  In fact, despite a Uyghur population of about 3,000, Pakistan seems largely unmoved by the East Turkestan cause, and the number and capability of Uyghur militants in Pakistan remain very limited. Although, at least in public, China has refrained from openly blaming Pakistan for Xinjiang’s escalating violence, it seems inevitable that those events have an impact of the two countries’ relations, and thus on China’s willingness to invest in Pakistan.

The recent protests, moreover, come from senators from the provinces of Khyber-Pakhtunkhwa and Balochistan. If the situation in Khyber-Pakhtunkhwa is relatively well known, China has several reasons to worry about Balochi groups, thus far some of the keenest opponents to Chinese investments – which in Balochistan are concentrated particularly in mineral resources. In most cases those groups do not seem to oppose Chinese companies per se, but rather intend to use them as a threat to force Pakistan’s central government to deal with their requests. Many Baloch nationalists are also afraid that projects such as the Gwadar port might represent an effort to drown out their call for independence. For Beijing, on the other hand, the major concerns lie with Pakistan’s apparent incapacity to limit the capacity of Baloch insurgents to attack its interests in the region, thus jeopardizing future projects and investments.

To conclude, the recent protests of a few Pakistani senators were predictable and more have to be expected in the future – though probably nothing particularly resounding, as the “Pak-China friendship” narrative remains powerful in the country. Yet the real problem underneath the surface is that the stakes are much higher than the mere re-routing of the CPEC. Pakistan remains a minor, weak market for China. It does not have significant resources nor it represents an important market for Chinese exports. It remains important, to Beijing, for its geographical position and stance against India, yet it does not seem to be worth a risky and expensive investment. The construction of the Corridor was tempting – and praised by Beijing – under Musharraf’s regime, when Pakistan was relatively stable and economically growing. Today, however, its feasibility must be questioned, and the fact that most projects connected to the Corridor are stalled is indicative. The problem is that, for the foreseeable future, Islamabad might simply not be able to guarantee Chinese workers’ safety and a return to Beijing’s investments, thus transforming a temporary stall into a definite ending.

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