211

GEO-POLITICS OF CHINA - PAKISTAN ECONOMIC

CORRIDOR (CPEC)
*
Dr. Waseem Ishaque, Syed Jawad Shah and Muhammad Adeel ur Rehman

Abstract
The “Belt and Road” is the shorthand expression for the initiative of “Silk Road
st
Economic Belt” and “21 Century Maritime Silk Road” proposed by China which is an
ambitious grand strategic enterprise with consequential significance. The prime motivation
behind this vision is making sincere contributions to the regional and global economic
development by reviving the spirit of ancient “Silk Road”. The initiative has drawn great
global attention with mixed reactions. Some regard this as one of China's geopolitical
strategies, while others perceives it as Chinese version of the Marshall Plan. The
overarching vision of “One Belt One Road” has been linked by tributaries through corridors
to facilitate the inaccessible countries and the regions. China – Pakistan Economic Corridor
(CPEC) is one such momentous undertaking linking Pakistan with this esteemed project.
While benefits of CPEC have been much debated, however, rising concerns over its
geopolitical aspects have also gained equivalent prominence. Pakistan has suffered
immensely from geopolitical rivalries of great powers in last three decades, therefore,
cannot afford yet another great game played out on its mainland. The aim of this paper is to
highlight the conceptual dimensions of “One Belt One Road (OBOR)”, and to analyze its
challenges from realist paradigm and suggest workable policy options in making CPEC as
one of the dividends for future generations of Pakistan.

Keywords: Maritime Silk Road, Sea Lines of Communications (SLOCs), Geo-

politics, Geo-economics.

Introduction

C hinese President Xi Jinping during his visit to Kazakhstan delivered a key note
speech at Nazarbayev University on 7 September 2013, where he pronounced
China’s initiative of constructing “The Silk Road Economic Belt” 1. Subsequently, he
visited Central and South Asian countries in September 2014, where he further
highlighted the contours of “Silk Road Economic Belt”, which was later transformed
into One Belt One Road (OBOR). The underlying principles of OBOR are aimed at
enhancing mutual benefit and economic developments for all the regions based on

*
Dr. Waseem Ishaque is Assistant Professor at Department of International Relations, National Defence University
(NDU), Islamabad, Syed Jawad Shah is working as Deputy Director (Publications) at ISSRA, NDU, Islamabad and
Muhammad Adeel ur Rehman is working as Researcher at R&P Branch ISSRA, NDU, Islamabad.

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212 Dr. Waseem Ishaque, Syed Jawad Shah and Muhammad Adeel ur Rehman

the principles of “amity, sincerity, mutual benefit and inclusiveness”. The strategic
vision of OBOR comprises two segments. The one component is land based road
which has been termed as, New Silk Road or One Belt and second component is sea
based which is referred as 21st Century Maritime Silk Road or One Road. 2
Additionally, three Economic Corridors have also been proposed for optimum
connectivity of more countries and the regions. The government of China has
established Silk Road Fund by allocating US $ 40 billion and additional US $ 100
billion will be financed through recently established Asian Infrastructure Investment
Bank (AIIB). Pakistan has been connected through exclusive connection called
China-Pakistan Economic Corridor (CPEC) considering strategic significance of
Pakistan and its all-weather friendship with China, promising huge economic
benefits amid risks and uncertainty as inherent part of the project.

This article will unveil all-encompassing perspectives on CPEC, as it has been

implemented, amid varying degrees of acceptability among the stake holders,
generating cautious optimism and suspicions as the progress is made on ground. The
project with its promised investment of US $ 46 billion, which has now been revised
to US $ 60 billion, is the largest ever single source investment in multifaceted projects
aimed at speeding up the engine of economic growth in Pakistan. While a lot has
been said and written on positive aspects of the project demonstrating the robustness
of Pak-China all weather friendship and strategic partnership. However, there have
been certain consistent dissenting voices, criticism and concerns shown by wide
segments of society across all the provinces, which have generated an atmosphere of
distrust, lack of transparency in the implementation and proportionate distribution
of dividends among the provinces, thus making it questionable as long-term
sustainable developmental project for Pakistan’s economy. This article takes realist
perspective of power politics to analyze the contours of CPEC on its implementation
strategy. It is very important for Pakistani policy planners to dispassionately analyze
all the aspects from multidimensional plane so that comprehensive response taking
all stakeholders on board be formulated for eventual benefits of all inhabitants of
Pakistan.3

Main Components of One Belt One Road (OBOR)

OBOR has two segments, one on land with almost identical alignment of
ancient Chinese Silk Route and other along sea. Detailed description of each
component is discussed in ensuing paragraphs.

Silk Road Economic Belt: This is fundamentally a road network intended at

augmenting transportation and trading network through land routes, with the help
of which “China is linked to Europe by traversing through Russia and Central Asia

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along the Northern line; to the West joins countries along Caspian Sea and Black Sea
by middle line, and to South Asian countries and Europe along South line with North
Africa as its extension”4.

The New Silk Road Three Extensions Connecting Different Regions 5

Precisely, the New Silk Road starts at central Chinese city of Xi’an and
traverses through Lanzhou in Gansu province, Urumqi and Khorgas in Xinjiang
province and enters near the border with Kazakhstan”. Subsequently it passes
through the Central Asian countries of Uzbekistan, Kyrgyzstan, Tajikistan and
Turkmenistan then enters Afghanistan. From here the road passes through Northern
Iran, Iraq, Syria and Turkey. From Turkish city of Istanbul, the road crosses the Strait
of Bosporus and swings North West to Europe passing through Bulgaria, Romania,
and Czech Republic and reaches Germany. From Duisburg in Germany, the road
moves to Rotterdam in Netherland and moves to South towards Venice in Italy”6,
where it links with the proposed sea based project “21 st Century Maritime Silk Road”.

21st Century Maritime Slik Road: This is a sea based maritime shipping and trading
network. It originates from sea port of Fujian province called Quanzhou, traverses
through Guangzhou in Guangdong province, Beihaiin Guangxi province and Kaikou
in Hainan province, which directs its entry to Straits of Malacca. From Kuala
Lumpur, the Malaysian capital, it swings towards Indonesia touching Belttung and
Banda Ache, Bangladesh at Chittagong Port and India at Kolkata Port with
additional configuration towards Hambantota in Sri Lanka, Maldives and crosses the
remaining part of Indian Ocean towards Kenyan capital Nairobi 7. From here, the
alignment swings towards North crossing nearby Horn of Africa, Red Sea up to the

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Mediterranean Sea. From here, Greece’s port Athens is joined in concluding the
ambitious Maritime Silk Road at Venice in Italy where it is joined with land based
New Silk Road8. Due to geographical contiguity of Chinese Western province of
Xingjian with Pakistani Gilgit-Baltistan, the CPEC has been envisioned linking
Kashgar with Gwadar passing through mainland Pakistan thus providing short and
easy access to China to Middle East while benefiting Pakistan with unprecedented
investment.

21st Century Maritime Silk Road Master Plan9

Main Components of CPEC

The Initial proposals of Economic Corridor on the similar alignment can be
sketched back to as late as 1960s in efforts by Pakistan to develop Gwadar Port as an
additional port and shipping hub for alleviating the socio-economic profile of
Balochistan, and also reducing the load from Karachi Port and also to serve as
security of Sea Lines of Communication (SLOCs) in case of untoward situation at
Karachi. Unfortunately, geo-strategic environment at that time curtailed the liberty
of action of policy planners in Pakistan; therefore, the project could not be initiated.
However, President Musharraf in November 2006 outlined the contours of trade
corridor on his official visit to China and proposed to link Kashgar with Gwadar
through Korakoram Highway (KKH). The fulcrum of this corridor was assumed to be
Gwadar Port and associated communication infrastructure supporting the trade
corridor. The Chinese Premier Mr Li Keqiang visited Pakistan on 22-23 May 2013
where he expanded already discussed vision of trade corridor and transformed it into

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China-Pakistan Economic Corridor, which was welcomed by Pakistani government.

Pakistani public, think tanks and the media who demonstrated unanimity of views
on this esteemed project of national significance and assured their full support.
During the reciprocal visit by President Mamnoon Hussain to China in February
2014, both states echoed on congealing their respective plans in actualizing the
CPEC. President Mamnoon Hussain stated that “the project will prove to be a
monument of this century. It will benefit not only Pakistan and China, but also the
whole region”10. Later on at several national and international forums leaders and
scholars of both countries have optimistically voiced that “China-Pakistan Economic
Corridor will serve as catalyst for Pakistan’s economic development”. The planned
corridor expanses for approximately 3000 kms commencing from Xinjiang province
of China at Kashgar upto Gwadar Port in Pakistan. “Initially US $ 46 billion were
proposed for the project which is expected to be completed by 2030; however, latest
figures show increase upto US $ 60 billion”. The investment breakdown is; “US $ 33.8
billion in energy projects, US $ 11.8 billion in infrastructure projects, US $ 622 million
for Gwadar port and around US $ 15.5 billion have been dedicated for energy related
projects projected to enhance 10,400 megawatts of electricity to the national grid
helping in substantial decrease in load-shedding”. The important components of
CPEC are discussed in ensuing paragraphs. 11

Gwadar Sector: The development and operationalization of Gwadar port will enable
Chinese entry to Arabian Gulf via shortest route which apart from trade and transit
facilities for both countries will have inherent advantage of enhancing Chinese geo-
political influence in this region and beyond as the expanse from Xinjiang to Gwadar
is about 3000 kms, in-fact far less than SLOCs traversing via Strait of Malacca which
is well over 12000 kms, therefore, it is appreciated that trade between China-Middle
East and Africa will also be expedited using direct access and shorter approach.
Similarly, when oil pipe lines will be fully established, the oil will also be stored and
pumped from Middle East to China which will ensure uninterrupted supply in a cost
effective manner. “In particular oil from the Middle East could be offloaded at
Gwadar, which is located just outside the mouth of the Persian Gulf, and transported
to China through the Balochistan province in Pakistan. Such a link would vastly cut
the 12,000-kilometre route that Mideast oil supplies must now take to reach Chinese
ports”12. From Pakistan’s perspective, the operationalization of Gwadar port will also
function as substitute of Karachi Port and important commercial ports by providing
additional communication artery to Pakistan, China Afghanistan and Central Asia.
However, all above premises are founded upon transparent and smooth execution of
proposed plans avoiding inherent geo-politics imbedded in this project and adoption
of pragmatic policies.

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Karakoram Sector: Road connectivity with Xinjiang in China through Karakoram

Highway (KKH) not only facilitated Pakistan’s access to Gilgit-Baltistan but also
ushered a new era of cooperation, joint development and means of flourishing
people to people contacts with easily accessible land route, apart from facilitating
trade and commerce. The upgradation plan will transform KKH into expressway of
90-feet width for substantial increase in traffic and carriage capacity along-with
associated transit facilities. The comprehensive development plan envisages
development of 19 tunnels for enabling all weather traffic-ability including
“Friendship Tunnel” which is proposed to be constructed under the famous
Khunjerab Pass. This is assumed to revolutionize inter-regional travel and freight
carriage. Additionally, 1100 kms railway project has also been conceived between
Kashgar and Islamabad. Apart from laying fiber optic along this route, several oil and
gas pipelines will also be laid.

Mainland Pakistan Networks

The construction work on three sectors of motorway i.e. Karachi-
Hyderabad, Sukkur-Multan, and Gojra-Khanewal has already begun and is at fairly
advanced stage of construction. Additionally, work on Hazara Motorway in Khyber
Pakhtunkhwa is also at an advanced stage. The Gwadar-Kashghar route was
originally planned through Bisima-Khuzdar-Kalat and Quetta upto Zhob traversing
through remaining Balochistan to D. I. Khan-Hassan Abdal linking Kashgar through
KKH (Western route), which later on was changed Bisima–Ratodero moving towards
already existing national highway towards Punjab (Eastern route), which implied
bypassing originally considered Balochistan and KPK areas. This sudden change
without the consent of respective stakeholders and in the absence of any
consultation forum generated heated media debate and voiced serious concerns by
the provinces. According to the modified plan, the CPEC route from Havelian is
proposed to link up with already functional Islamabad-Lahore Motorway, and
onwards with Lahore-Karachi Motorway upto Gwadar as a future projection. The
logic given here was that already available infrastructure in the country has been
used to expedite the completion of projects in envisaged time frame, thus making
the whole benign development project into unnecessary controversy among the
provincial and federal governments. Another clarification which has appeared in the
media was to accommodate Chinese concerns of precarious security conditions of
Balochistan and KPK provinces. “The Khyber Pakhtunkhwa Assembly has
unanimously passed a resolution opposing any change in the Western route. There is
now a third plan under consideration which also envisions going through
Balochistan and KPK covering economically backward parts of the country. Pakistan

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railway in cooperation with Chinese Consortium is considering constructing

Gwadar-Khunjrab Rail link at an estimated cost of over US $ 2.3 billion”.

Analytical Debate on Geo-economics and Geo-politics of

OBOR and CPEC
For the sake of dispassionate analyses, it will be pertinent here to debate
two opposing but complimentary dimensions of geo-economics and geo-politics of
OBOR and CPEC for construing positives and pitfalls of the project enabling us to
formulate viable policy options for optimizing strengths by overcoming weaknesses.

Chinese Compulsions of Initiating OBOR and CPEC Vision

The literature and transcripts highlight several dimensions of OBOR and
CPEC and white paper issued by Chinese government highlights key policy
fundamentals being adopted by China. The perceived motivations behind these
projects have been summarized as under;

 Securing Sea Lines of Communication (SLOCs): Chinese policymakers

have always been sensitive to Malacca Strait due to obvious reasons of
hotspot issues in South China Sea. As Chinese economy grows at 7% at new
normal rate in coming 2-3 decades, its size of GDP will almost be double.
Therefore, being the largest oil and gas importer in the world today with
doubled requirements in future, alternate routes are vital for sustainable
and uninterrupted energy security for China. CPEC in that context fits in
Chinese grand strategy very well.
 Developing Western Chinese Regions: China is very big country with
huge land mass. The eastern and central China have been developed to
great degree due to accessibility of ports and better road networks, however,
Western region remained out of focus, which has now been included in fast
track development agenda. This initiative will be hugely complimented if
CPEC is developed as it will provide direct access of all Western regions to
Arabian Gulf.
 Export of Additional Infrastructure Capacity: After making fast track
development as a result of excellent infrastructure, the Chinese economic
growth was propelled. After revising GDP target from previous 10% of last
three decades, it has been adjusted as 7% for coming three decades under
strategy of new normal. As a result, China has surplus capacity in steel, bulk
chemical, cement and heavy machinery. The OBOR and CPEC will be
excellent markets in absorbing such surplus values.
 Exploration of New Export Markets: China relies heavily on export
oriented economy and at present China has trade surplus with every

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country it is engaged, which in fact is main contributor of its economic

turnaround. With already existing markets being saturated and expected to
increase in size of GDP, China is exploring new export markets where
transportation in future will pose major challenges. Therefore, OBOR and
CPEC will help in facilitation of such ventures for years to come.

CPEC in the Geo-strategic Construct of Pakistan

Last three decades mark the turbulent geo-strategic landscape surrounding
Pakistan especially towards Western and Southern borders where bulk of CPEC
projects including Gwadar have been planned due to super power rivalry, several hot
spot issues, impact of War on Terror and its associated fallout in the border regions
of Pakistan thus presenting a complex security matrix. Pakistan has confirmed its
assurances to peaceful resolution of disputes for sustainable economic and enduring
regional stability. While USA’s proposed strategy of Pivot to Asia-Pacific with
military dimensions aimed at containing China is a point of concern, yet China has
adopted a policy of ‘Win-Win Cooperation’ through regional connectivity by
unveiling the contours of OBOR and independent financial institution like Asian
Infrastructure Investment Bank (AIIB), thus opening several avenues of economic
opportunities lying ahead around the globe. CPEC as an underlying artery of OBOR
offers tremendous opportunities for Pakistan and the region. Nevertheless, the
execution of CPEC as it has been unfolded so far poses several challenges to Pakistan
both internally and externally, which will have to be resolved and mitigated for
accruing potential benefits from the envisaged project.

Manifestation of Strengthening the Bonds of Friendship

between China and Pakistan
CPEC is the concrete exhibition of thriving relations between Pakistan and
China, where “One Belt and One Road” distinctly caters for development and
connectivity in Pakistan to accrue benefits of Chinese development and initiatives of
regional connectivity. Senator Mushahid Hussain Syed, Chairman Pakistan China
Institute Islamabad states that “the relations with China were a factor of national
unity in Pakistan since all political parties and provinces supported it” 13. Similarly,
Premier Li Keqiang stressed in his meeting with President Zardari at Islamabad in
May 2013 that his visit to Pakistan will “open a new chapter in bilateral ties, chart a
new course for practical cooperation and thus lift their traditional friendship to a
new heights". He also added that “the all-weather cooperative friendship between
China and Pakistan not only boasts a solid foundation but also enjoys great
prospects”. Reciprocating the friendly sentiments, Mr Nawaz Sharif in his one on one
meeting with Premier Li also described that "the friendly foreign policy towards

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China has been the common aspiration of all Pakistani people, and Pakistan regards
it as a priority no matter which party takes power" 14. Premier Li Kiaqing, while
talking to speaker of Pakistan’s National Assembly on 30 January 2015 indicated that’
“China-Pakistan economic corridor functions as the strategic framework for the
cooperation of the two nations”15.

Perceived Economic Fate Changer for Pakistan and the

Region
The CPEC has been assumed to be a ‘fate changer’ for Pakistan. This has
been widely debated in Pakistan, most of government officials and relevant
ministries use the anecdotes in identical words and fashion. Besides creating a direct
connection between Pakistan and China, the economic corridor would also link
Pakistan with its neighboring countries adjoining Western border regions. It is
aimed at establishment of specialized economic zones, science and technology parks,
infrastructural facilities such as road and rail networks, airports, dams and other
associated nodes. These new vistas of development and industrial growth will
enhance Pakistan’s productivity and give boost to the overall economy. The entire
Pakistan would reap benefits from the OBOR projects located and passing through
the country. Importantly, the backward and remote parts of the country in KPK and
Baluchistan will benefit the most from eventual development. This will bring
prosperity to these areas through developmental projects leading to new job
opportunities, poverty reduction, improved living standards and creation of pool of
skilled labor. Mr. Mushahid Hussain describes that “CPEC is of huge significance for
the revival of Pakistan’s ailing economy, the resolution of energy crisis and
strengthening of federation of Pakistan through development and building of
infrastructure”16. Chief Minister of Punjab Mr Shahbaz Sharif in his meeting at
Lahore with Chinese first Consul General Mr Yu Boren reiterated that “CPEC is an
important step in the growing trade and economic relations between the two
countries and will usher in a new era of progress and prosperity in Pakistan” 17.

CPEC and Economic Security of China

It is visualized through empirical research that in contemporary
international order, China’s security, political and economic interests are
interwoven. From Chinese perspective, security of SLOCs through Arabian Gulf and
Strait of Malacca will be constrained due to lack of adequate naval assets. More than
half of Chinese oil needs are met by imports from Gulf which is likely to raise
manifold as Chinese economy expands further, therefore, China is conscious of
enhancing political and security related influence in the region for economic
security. In this backdrop, direct link between Gwadar and Xinjiang is of vital

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220 Dr. Waseem Ishaque, Syed Jawad Shah and Muhammad Adeel ur Rehman

significance and also by maintaining control over Khunjrab Pass will strengthen
security of land route passing through Shaksgam and the neighboring valleys for
eventual control of Xinjiang. Similarly, overland access to Afghanistan and Iran from
Pakistan will also help in mitigating threat perceptions arising from US presence in
the Gulf and avoiding competition with Russia bypassing Central Asian Republics.

Strategic Dividends for China

The operationalization of Gwadar Port is of huge importance for both
Pakistan and China. Exclusively for China, as the expanse from Gwadar to Xinjiang is
roughly 3000 kms, far less than the approach through Strait of Malacca to any
Eastern port traversing around 12000 kms, thus the movement of goods and services
through CPEC between China, Middle East and Africa will be significantly facilitated.
Additionally, from Middle East, the oil can also be stored and pumped directly with
the help of pipelines to China thus adding to economic security of China. “In
particular oil from the Middle East could be offloaded at Gwadar, which is located
just outside the mouth of the Persian Gulf, and transported to China through the
Balochistan province in Pakistan. Such a link would vastly cut the 12,000 kms route
that Middle East oil supplies must now take to reach Chinese ports” 18 . From
Pakistan’s perspective, the establishment of Gwadar port will serve as substitute
commercial pivot and alternate strategic link. Former Prime Minister Nawaz Sharif
during his address at Boao Forum on 14 April 2014 stated that “our geography links
China and the New Silk Road to the warm waters of the Arabian Sea and the Persian
Gulf. This is the linear dimension of our relevance with the Silk Road” 19.

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CPEC and Regional Geo-politics

The importance and regional significance of Gwadar Port makes it unique in
terms of its location and natural connectivity it is promising for the region and
beyond. Situated at the narrow entrance of Strait of Hormouz, it is considered to be
a gateway for South, Central and East Asia as well as for China when fully
operationalized as a result of full implementation of CPEC projects. It is also
tremendously significant for Pakistan as well with inbuilt maritime logistic transit
and sustenance capability to serve as alternate port to Karachi. Enormous
controversy has been appearing in the media over the development of Gwadar port
especially its operational and administrative control with varying dimensions of
analyses. US presence in the Middle East, Gulf and Afghanistan with competing
strategic interests with China and competing interests of India for control of Indian
Ocean Rim (IOR) give much credibility to such arguments. Gwadar Port has also
appeared in print media as Chinese continuation of String of Pearls strategy for
enhancing her maritime influence in the Indian Ocean. “Gwadar Port is perceived
in India as less likely to become a vibrant economic hub than to serve as a naval
base for China’s expanded blue water fleet and operations throughout
the Indian Ocean 20. The military dimensions arising from Chinese naval aspirations
point of view are likely to enhance negative perceptions and trumpet about
perceived threat imbedded in CPEC.

Regional Power Politics

OBOR is anticipated to increase Chinese acceptability and influence in the
relevant countries and the regions in this globalized interconnected world. As a
result, the likelihood of friction and concerns among policymakers of the USA which
is the statuesque power may increase for regional domination and supremacy due to
divergence of interests. The Realist paradigm confirms such assumption, while
Liberalist deny this. Whatever is the ultimate scenario; there remains strong
possibility of heightened tensions between the two major powers in South China Sea
as well as Indian Ocean Rim (IOR) region, when also viewed in the context of Indian
interests. US Pivot to Asia-Pacific empirically proves the strategy aimed at containing
China and the wider political and economic agenda imbedded in the
implementation of OBOR. US gradual increase of its naval presence in the Asia
Pacific region as it is not ready to cede its dominance of the high seas, US new
Doctrine named “Air Sea Battle Doctrine – 2010” which was later renamed as “Joint
Doctrine for Access and Maneuver – Global Commons (JAM – GC)” and Chinese
response to develop Blue Water Navy and also strategizing A2/AD are some
manifestations of this uneasy relationship between US and China. In the same
context, USA’s presence in Middle East, Gulf and Afghanistan and her relationship

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with India and Pakistan on one hand and on the other hand, China’s own relations
with both countries indeed pose challenges with respect to managing regional Power
Politics. For managing regional Power politics, the best option available is skillful
diplomacy by eliminating misunderstandings through enhanced communication and
converting competing concerns into mutually beneficial interests for benefit of
Pakistan, China and the region. “The United States will also have its own long-
term concerns about the CPEC, as it represents the leading edge of China’s
expanding access to, and likely influence within, Eurasia. As Pakistan grows
closer to China, there may be temptation in Washington to compete for
influence in Islamabad” 21. Additionally, the success of CPEC is also linked to the
enduring peace in Afghanistan, which is difficult to unfold without convergence of
interests at global and regional levels, which is the need of the hour. Similarly, Iran is
determined to advance the construction of Chabahar Port presumably as a
competitor to Gwadar with the assistance of India. Constructed and perceived
negative influence of CPEC may tempt the Gulf countries especially UAE to adopt a
confrontationist posture to undo Gwadar for retaining the viability of her ports in
Dubai, thus multiplying rivalries where conflicts over Gwadar would assume fulcrum
for regional power politics, thus demanding high quality of statesmanship and
leadership in avoiding unhealthy competition.

Managing Major Power Relations by Pakistan

Pakistan has exhibited distinct brilliance in management of her
relationships with two major powers i.e. China and USA. Despite rollercoaster ride,
dealings with USA have been managed to a favourable level and at the same time
Pakistan’s relationship with China are archetypal based on mutual respect and trust.
In the changed geo-political environment, Pakistan has to exhibit statecraft in
balancing these relations as both countries are extremely important for Pakistan.
The CPEC should not be allowed to be turned into zero-sum game between
Pakistan-China and Pakistan-USA. There are intermittent negative news and
concerns on CPEC appearing in global media, especially in relation to Gwadar port,
therefore, Pakistan has to move cautiously in balancing her relations with China and
USA and develop counter narratives in dealing with national and international
media in portraying correct spirit of CPEC. The administrative and operational
control of Gwadar has to be re-evaluated and renegotiated if required so that
military dimensions if at all appearing at some later stage as witnessed in the
development Hambantota port by move of Chinese vessels on the pretext of
protection of Chinese workers initiated long drawn controversy over sovereignty
issues in Sri Lanka, therefore, such like situations must be proactively avoided at all
costs.

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Internal Dynamics of CPEC in Pakistan

While the project was ushered after huge media slogans and fun fare
inaugurations at time of Chinese President’s visit to Pakistan in 2015, the unfolding
strategy has been full of suspicions and uncertainty about the real motives of the
project even challenging the national integration at certain occasions with dissident
voices raised by the provinces and passage of resolutions from Sind and Khyber
Pakhtunkhwa (KPK) Assembly. Therefore, after analysing geo-economic and geo-
political aspects of CPEC, the stage is now set to discuss the internal dynamics and
impact of CPEC as visualized from the stakeholders and citizen’s perspective.

 Impact on National Harmony: The noble and benign intent of CPEC for
Pakistan’s economy is understandable and appreciated. However, the
unfolding of plans and execution on ground has generated meta narratives,
suspicions and seriously affected national harmony. KPK Provincial
Assembly and Sindh Assembly passed resolutions against their perceived
alterations in the design and implementation framework, also igniting
country wide protests amid lower scale created an atmosphere of inter
provincial disharmony thus eroding national cohesion. Although, the
available mechanisms have pacified the situations to a large extent, yet
simmering effects can still be felt. The national projects should rather
enhance national integration, therefore, warrant serious introspection to
alleviate any misgivings or grievances by smaller provinces.
 Transparency in MoUs and Implementations Methodology: Pakistan’s
greatest dilemma has been that the agreements were made usually among
the individuals rather than the state and without much documentation.
CPEC terms and conditions and rate of mark up on investment, debt
management strategy and all the agreed conditions with investors have to
be formalized to make it viable national project and its contours should be
shared with all stake holders so that everyone feels part of this undertaking.
 Impact on Local Economy
 Manufacturing Industry: The inflow of Chinese products and
firms will outclass Pakistan’s manufacturing industry due to cheap
cost of production, transportation and huge stocks.
 Competitiveness of Pakistani Products: Though economic
activities of CPEC will generate many jobs of varying dimensions,
yet the labour cost is likely to rise to more demands in market,
which will increase cost of production due to labour cost and high
electricity price. Therefore, Pakistani exports will be at a great
disadvantage in international markets.

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 Credibility of Quality of Chinese Investment: There are strong

apprehensions about success rate and quality of Chinese
investments. This is evident from delay in Neelum-Jehlum
Hydropower Project and Nandipur Power Project.
 Environmental Impact: The on-going coal power projects
especially in Sindh and Punjab will create serious environmental
hazards in future. While the world is shifting towards more
efficient and environmental friendly energy projects including
China who is making fast track efforts in removing haze from skies
of Beijing and other affected cities, on the contrary, Pakistan is
embarked upon investing in the same projects. Their viability for
future is a serious question mark.
 Chinese Investment through Own Labour and Material: While
from Chinese perspective, it is in their national interest to consume
their labour and material while investing in other countries.
However, this is affecting Pakistan in several dimensions as; not
creating enough jobs for locals, less consumption of local
construction material and invisible impact of dividends to common
citizens of Pakistan.

Recommendations for Optimizing CPEC

After threadbare analyses of geo-economic, geo-political and internal
dynamics of CPEC for Pakistan, following suggestions are offered to make it viable
and profitable investment for Pakistan;

 Diplomatic Aspects: Pakistan should reach out to both USA and China in
managing her relations avoiding competition and zero-sum prism of CPEC.
While both major powers are extremely important for Pakistan, therefore,
proactive and constructive engagement and balanced approach is
recommended. As CPEC has regional implications as well, therefore, using
regional forums like SCO, SAARC and GCC etc, Pakistan should engage to
remove any misapprehensions of regional countries and strive for their
participation in CPEC instead of geo-political competition for eventual
dividends on the region.
 National Consensus: The previous strategy of imposing Central
Government’s will or taking provinces out of decision loop has created
serious fissures and generated unnecessary fault lines among the federating
units. The federal government and relevant ministries should work out a
forum and consultation mechanism where all such grievances are addressed

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Geo-Politics of China - Pakistan Economic Corridor (CPEC) 225

on the table instead of street agitations. CPEC should rather enhance

national integration and bind all provinces together as cohesive whole.
 Transparency of CPEC MoUs and other Agreements: All agreements
related to CPEC or such vital national interest projects should be committed
in writing and notified by respective ministries by taking all stake holders
on board. It is suggested that left over work be expedited and appropriately
recorded for reference to be used by next generation of leadership.
 Military Aspects: Operational and administrative control of Gwadar port
has generated huge controversy in both national and international media.
As a sovereign country, military dimensions of Gwadar should be delinked
from commercial and administrative aspects. Protection of SLOCs and
maritime boundaries should continue to remain with those services and
institutions mandated by the constitution of Pakistan. Therefore,
militarization of Gwadar should be avoided at all cost.
 Protection and Enhancement of Local Industry: While the positive
aspects of competition are much appreciated in this era of globalization.
However, the lack of capacity, high production cost and high labor cost
should not result in influx of Chinese products to the detriment of Pakistani
industry. Pragmatic and long term sustainable policies are suggested to
provide protection and enable expansion of local industries in Pakistan.
 Employment of Local Labor and Material on CPEC Projects: While
Chinese way of investment with own manpower, skilled labor and material
is in vogue in many countries, however, Pakistan’s national interest should
be kept supreme and terms of reference should be renegotiated to absorb
Pakistani labor, skilled manpower and manufactured material to boost our
economic potentials instead of relying only on Chinese. Some duties like
being done by USA may be considered to generate additional revenue and
incentivize own industry.
 Economic Aspects: Some of the suggested measures are;
 Sustainable Methodology for Debt Payments: State Bank of
Pakistan and Finance Ministry are suggested to formulate solid
debt management strategy for maintaining a suitable balance in
debt retirement and yet availing adequate finances for
uninterrupted development pace.
 Monitoring and Evaluation: In order to ensure quality and
expedite the pace of on-going works across all spheres of CPEC, it
is suggested that strict quality checking mechanism be instituted
alongwith regular evaluation of progress made on ground. Regular
sharing of such information will help in maintaining standards and

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226 Dr. Waseem Ishaque, Syed Jawad Shah and Muhammad Adeel ur Rehman

on spot correction if needed to ensure uninterrupted progress in

meeting timelines of completion.
 Revitalizing Export Industry: Relevant ministries need to be
facilitated in taking lead role in formulating policies for enhancing
own exports as these are vital for addressing trade imbalance. The
opportunities of enhanced connectivity through CPEC will only be
optimized provided our exports are competitive and targets are
met on regular basis.

Conclusion
CPEC is appreciated to act as a wide-ranging platform for enhancing
cooperative enterprises comprising connectivity, infrastructure for
telecommunication and information network, energy projects, agricultural
development, industrial parks, tourism, public health and people to people
communication which is expected to create new ventures and expand the economic
outlook of Pakistan. Similarly, by implementing CPEC, China will have the great
opportunity of expanding commercial and transport venues in order to increase her
trade volume and influence across South and Central Asia. Gwadar Port when fully
developed is assumed to play a pivotal role in making it a gateway and conduit for
the proposed corridor, however, the intended objectives can only be achieved
provided our pragmatic policies address the concerns and challenges discussed in
this article in a highly efficient and befitting manners.

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Geo-Politics of China - Pakistan Economic Corridor (CPEC) 227

NOTES

1
Wang Wen and JiaJinjing, “Silk Road Economic Belt Construction: Vision and Path,” ISPI Report, June 2016,
2
"Spotlight: Xi's Four-nation Tour Highlights Sincerity of China's Neighborhood Diplomacy." Xinhua News,
September 21, 2014.http://www.xinhuanet.com/english/cnleaders/xjp20140911/index.htm
3
Shannon Tiezzi, "China's 'New Silk Road' Vision Revealed."The Diplomat, May 09, 2014. Accessed September 18,
2017.https://thediplomat.com/2014/05/chinas-new-silk-road-vision-revealed/
4
Wang Wen and JiaJinjing, “Silk Road Economic Belt Construction: Vision and Path,” ISPI Report, June 2016, 5
5
Cui Jia, "China Studying New Silk Road Rail Link to Pakistan." China Daily, June 28, 2014. Accessed September
18, 2017.http://usa.chinadaily.com.cn/business/2014-06/28/content_17621848.htm
6
Shannon Tiezzi, "China's 'New Silk Road' Vision Revealed."The Diplomat, May 09, 2014. Accessed September 18,
2017.https://thediplomat.com/2014/05/chinas-new-silk-road-vision-revealed/
7
"Spotlight: Xi's Four-nation Tour Highlights Sincerity of China's Neighborhood Diplomacy." Xinhua News,
September 21, 2014. http://www.xinhuanet.com/english/cnleaders/xjp20140911/index.htm
8
Shannon Tiezzi, "China's 'New Silk Road' Vision Revealed."The Diplomat, May 09, 2014. Accessed September 18,
2017.https://thediplomat.com/2014/05/chinas-new-silk-road-vision-revealed/
9
Yang Jiechi. "China’s New Foreign Relations for A Complex World." Word Press, November 11, 2014. Accessed
September 18, 2017.https://mygoldenbengal.wordpress.com/2014/11/11/chinas-new-foreign-relations-for-a-
complex-world/
10
Shannon Tiezzi. "China, Pakistan Flesh Out New ‘Economic Corridor’." The Diplomat, February 20, 2014.
https://thediplomat.com/2014/02/china-pakistan-flesh-out-new-economic-corridor/
11
"Xi Jinping Meets with Prime Minister Nawaz Sharif of Pakistan." Ministry of Foreign Affairs of the People's
Republic of China, November 08, 2014.
http://www.fmprc.gov.cn/mfa_eng/topics_665678/ytjhzzdrsrcldrfzshyjxghd/t1209091.shtml
12
Ibid.
13
Ibid.
14
"Li's Visit Opens New Chapter in China-Pakistan Relations." News of the Communist Party of China. May 24,
2013. Accessed September 18, 2018.http://english.cpc.people.com.cn/206972/206976/8257218.html
15
"Sino-Pakistan Economic Corridor Nears Implementation Phase." Pakistan Defence. February 04, 2015. Accessed
September 18, 2017.https://defence.pk/pdf/threads/sino-pakistan-economic-corridor-nears-implementation-
phase.357358/
16
Ibid.
17
"$45.6b Economic Corridor: Pak-China Friendship to Enter into New Phase in 2015, CM Shahbaz." Customs
Today. March 03, 2015. Accessed September 18, 2017.http://www.customstoday.com.pk/45-6b-economic-
corridor-pak-china-friendship-to-enter-into-new-phase-in-2015-cm-shahbaz/
18
Ibid.
19
"Prime Minister Nawaz Sharif Addresses a Session on ‘Reviving the Silk Road — A Dialogue with Asian Leaders’
at Boao Forum for Asia." The Express Tribune. April 12, 2014. Accessed September 18,
2017.https://tribune.com.pk/story/694279/a-road-full-of-potholes/
20
Daniel S. Markey, and James West. "Behind China’s Gambit in Pakistan."Council on Foreign Relations. May 12,
2016. Accessed September 18, 2017.https://www.cfr.org/expert-brief/behind-chinas-gambit-pakistan
21
Ibid.

NDU Journal 2018