CHINA-PAKISTAN ECONOMIC CORRIDOR (CPEC) – INTERNATIONAL
News: Pakistan,
China reiterate to continue cooperation on CPEC
What's in the news?
● A
day after India criticized the China-Pakistan Economic Corridor (CPEC), the
Foreign Ministers of Pakistan and China expressed their firm commitment to
continue their cooperation on the multi-billion dollar infrastructure projects.
Key takeaways:
● The
CPEC Corridor is a $60 billion corridor
being laid through Pakistan-occupied Kashmir (PoK) with China's assistance.
● India
is opposed to the CPEC as it passes through the PoK, giving China access to the
Arabian Sea through the Gwadar port in Pakistan's Balochistan province.
CPEC:
● The
CPEC is a bilateral project between Pakistan and China.
● It
is a 3,000-km long route of
infrastructure projects connecting China’s northwest Xinjiang Uygur
Autonomous Region and the Gwadar Port in the western province of Balochistan in
Pakistan.
● CPEC
is a part of the Belt and Road
Initiative.
○ The
BRI, launched in 2013, aims to link Southeast Asia, Central Asia, the Gulf
region, Africa and Europe with a network of land and sea routes.
Why is CPEC beneficial for China?
1. Unique location:
● Pakistan
has the geostrategic significance
for China due to its unique location.
● Through
CPEC, China could harness Pak’s potential as a regional hub for China, Central
Asia, and the Middle East.
2. Energy security:
● Currently,
the only maritime route available for China to access Africa, the Middle East,
and Europe is through Malacca Strait.
● To
overcome this, China is searching for alternative routes via Myanmar or
Pakistan to secure oil imports and also export its cheap goods.
3. Xinjiang region development:
● China’s
Xinjiang region is underdeveloped due to its landlocked nature and insurgency by Uighur militancy.
● However,
the Xinjiang region has huge oil and gas reserves, and it is the only route for
China to access Central Asia.
● CPEC
will link Xinjiang with the Indian Ocean via Gwadar port.
4. Access to Africa and Middle east:
● Currently,
several Chinese companies are engaged in developmental projects in Africa and
the Middle East region. Thousands of Chinese
workers are employed over there.
● CPEC
serves as a short route to access
those areas. This could further deepen Chinese activities in Africa and the
Middle East.
Advantages of CPEC for Pakistan:
1. Socio and Economic development:
● In
recent years GDP growth rate is poor and unemployment rate is soaring high
every year in Pakistan. Investments through CPEC will be a game changer for
Pakistan.
2. External loans:
● Pakistan
was put in a grey list of the global
anti money laundering group. So, grants and loans from International
multilateral development institutions were reduced.
● China's
grants and loans are helpful for Pakistan to improve the economic conditions.
3. Development in underdeveloped region:
● CPEC
comes through Pakistan's underdeveloped areas, this will increase the employment opportunities and socio economic
developments of the people of those areas.
Concerns of CPEC for Pakistan:
1. Debt Trap:
● Pakistan's
debt levels have become a concern due to the large scale of projects financed
by loans from China and the ability to repay these loans.
● China
is now Pakistan's largest creditor, with Pakistan
owing 27.4% of its total external debt to China in 2021, according to the
IMF.
2. Regional Imbalances:
● CPEC
is focused on certain areas and provinces in Pakistan, leading to concerns
about regional imbalances in development and investment.
3. China's increasing influence:
● Some
have raised concerns about China's increasing influence in Pakistan and the
potential for the project to compromise the country's sovereignty and
independence.
Why is it a problem for India?
1. Impinges on India’s sovereignty and territorial
integrity:
● India
officially expressed strong opposition to CPEC, criticizing it for affecting
its sovereignty.
● India’s
primary concern is with the corridor’s path through Gilgit-Baltistan in PoK (Pakistan Occupied Kashmir), which India
considers its territory.
● The
construction of CPEC would further reinforce Pakistan’s claim over the region.
2. Chinese dominance:
● A
China that is more accepted and integrated into the rest of the global economy
will have a stronger voice in the UN and with individual nations, which may be
bad news for India’s bid for a permanent seat on the UN Security Council.
3. Chinese String of Pearls:
● With
an existing presence in Chittagong port
(Bangladesh), Hambantota port (Sri Lanka), Port Sudan (Sudan), Maldives,
Somalia and Seychelles, a control of Gwadar port establishes complete
dominance of the Indian ocean by the Communist nation.
4. Afghanistan's entry:
● In
May 2023, Afghanistan officially joined in the CPEC project.
● This
will pave the way for increased terrorism activities and seriously hinders
India's access to Central Asia.
5. Security threat:
● Further,
it also has a fear that the newly developed roadways near the Indian border in
the PoK region will raise the infiltration of anti-India elements from Pakistan
to India.
● CPEC
and it's related developments in the Pakistan occupied Kashmir will increase the state sponsored and non state
sponsored terrorism in the region.
6. Affect riparian rights and strategic interests:
● China
is also building large dams (7,100MW Bunji
Dam and the 4,500MW Diamer – Bhasha
Dam) and military bases in this region, both affect India’s riparian rights
and strategic interests.
Options for India to counter CPEC and BRI:
1. QUAD:
● India
is a member of the Quad (India, the US, Australia, and Japan) which can provide
realistic alternatives for countries looking for infrastructure and be an
alternative to China.
● The
member countries of the Quad have come up with some alternatives.
● For
example, Blue Dot Network (BDN) and
Build Back Better World (B3W) initiative.
2. Chabahar Port:
● India
can counter Chinese dominance in Gwadar port through Chabahar port in Iran
which is very near to Gwadar Port and India helped in its development.
● Moreover,
India signed a trade corridor deal with
Iran and Afghanistan giving India access to Central Asia from Chabahar,
bypassing Pakistan.
● However,
Iran is considering participating in CPEC.
3. Speed up own projects:
● India
should speed up work on the development of its own strategic projects like the Spice route and Mausam Project,
Bangladesh, China, India and Myanmar Economic Corridor (BCIM), and Chabahar Port.
4. International North South Transport Corridor:
● This
corridor will play a major role to counter China's CPEC projects and increase
India's accessibility of Central Asia.
5. Increase India's investment in Afghanistan:
● More
investments by India in Afghanistan and Improved infrastructure and security
situation in Afghanistan may help India to conduct its economic and trade
activities in a secured environment.