CHI-PAK Economic Corridor: CPEC
The China-Pakistan Economic Corridor is a key initiative of President Xi Jinping’s Belt and Road Initiative concept. The pilot project exemplifies China and Pakistan’s strengthened bilateral cooperation, which has been proven by adversity and developed by mutual trust.
CPEC was officially inaugurated in 2015, with a $46 billion investment. However, the total value of all CPEC projects has grown significantly in recent years. The vision and mission of the China-Pakistan Economic Corridor are to improve Pakistan’s interconnection, speed up economic improvements, and ensure long-term advancement by modernizing its road, rail, air, energy, transportation, and special economic zones, as well as to connect Pakistan’s deep-sea ports of Gwadar and Karachi to China’s Xinjiang province and beyond.
Based on the concept of a win-win situation, CPEC has the ability to effectively link Pakistan and China by becoming a means of shipping millions of tons of products from China to the Middle East, Africa, and Europe through the Gwadar port. CPEC, in addition to benefiting Pakistan and China, provides a variety of chances for the socio-economic development of landlocked Central Asian nations and will enhance regional commerce and connectivity in South Asia. The corridor would not only strengthen Pakistan’s economic and political influence but will also improve regional people-to-people cooperation.
Although CPEC has proven to be advantageous, various parts of the route’s development and technicality have been criticized in political forums and by the media.
Some references have recommended that the interest rate for CPEC-related loans would be substantial, with India’s Daily News and Analysis paper claiming that Pakistan had unwittingly accepted loans that would “be offered at very high rates of interest,” despite the fact that the actual interest rates were settled prior to acceptance, and for most projects will be 1.6 per cent, whereas previous Pakistani infrastructure projects financed by the World Bank carried an interest rate of between 5 and 10%.
Several publications in Pakistan have criticized the project’s financing as being cloaked in mystery, with one claiming that “much too much secrecy and far too little openness.” The Private Power and Infrastructure Board has also been charged with abnormalities in the authorization process for coal power plants and the tariffs at which Pakistan is contractually obligated to purchase electricity from those plants, with particular concern raised about potential irregularities in the tariff approved for China Machinery Engineering Corporation’s 300 MW coal power plant to be built in Pind Dadan Khan.
Furthermore, Chinese exports via the Karakoram Highway have reached the local Pakistani market, where they are cheaper due to Pakistan’s considerably higher cost of manufacturing. It has also been predicted that the CPEC may replace Pakistani exports in foreign markets with Chinese products.
The Government of India, which has strained ties with Pakistan, opposes the CPEC project because it is taking place in Gilgit-Baltistan, a province that India regards as its own. During Indian Prime Minister Narendra Modi’s 2015 visit to China, Indian Foreign Minister Sushma Swaraj allegedly told Chinese Communist Party general secretary Xi Jinping that projects passing through Gilgit-Baltistan are “unacceptable” because they necessitate construction in the claimed territory. Subrahmanyam Jaishankar, India’s Foreign Secretary, also stated that the subject had been discussed with the Chinese authorities during the trip. Swaraj stated at a meeting with Chinese Foreign Minister Wang Yi in August 2016 that India will “resolutely reject” the corridor in Kashmir.
India made no objections to China’s development of the Karakoram Highway between 1959 and 1979. After the 2010 earthquake, India did not protest large Chinese-sponsored upgrades to the Karakoram Highway, but it did complain about the deployment of Chinese troops in the region assigned to protect Chinese employees.
India also did not protest the construction of the Mangla Dam in southern Kashmir, an area that India claims as its own territory, using World Bank money and British technical support. India even claimed that the Wullar Barrage project in Indian-administered Kashmir, which Pakistan considers a breach of the Indus Water Treaty, will benefit the Mangla Dam in the long run. India also did not protest to building work at the Neelum–Jhelum Hydropower Plant in Kashmir, which has been under development with Chinese help since 2008.
Despite the fact that the Neelum-Jhelum project is located in territory that India officially believes to be its own, India consented to let it proceed in 1991.
Following the 2005 Kashmir earthquake, large-scale infrastructure rehabilitation work was carried out across northern Kashmir with the support of South Korean, Turkish, and Saudi companies. Chinese firms contributed $6 billion to 14 post-earthquake repair projects in the disputed region. Despite the fact that infrastructure along the militarily vital Line of Control was improved, India did not protest these efforts.
In response to a Chinese protest about a joint Indian-Vietnamese oil exploration project in the disputed South China Sea, India objected to Chinese building operations in Gilgit-Baltistan in 2011. The powerful Institute for Defence Studies and Analyses, a research group financed by the Indian Ministry of Defence, asked for India to start voicing objections to Chinese initiatives in the region at the “international level” in 2011.
References:
“CPEC Criticism: What Needs to Improve?” The Express Tribune. May 31, 2020. Accessed November 19, 2021. https://tribune.com.pk/story/2232569/cpec-criticism-needs-improve.
Marwat, Zahoor Khan. “India’s Campaign against CPEC.” Thenews. October 12, 2020. Accessed November 19, 2021. https://www.thenews.com.pk/print/728014-india-s-campaign-against-cpec.
Ministry of Planning, Development & Special Initiatives ‘P’ Block Pak-Secretariat. “Introduction: China-Pakistan Economic Corridor (CPEC) Authority Official Website.” Introduction | China-Pakistan Economic Corridor (CPEC) Authority Official Website. Accessed November 19, 2021. http://cpec.gov.pk/introduction/1.
“China-Pakistan Economic Corridor (CPEC).” Encyclopædia Britannica. Accessed November 19, 2021. https://www.britannica.com/topic/China-Pakistan-Economic-