[Interview] China-Pakistan Economic Corridor; Implications and Challenges

Pakistan Prime Minister Imran Khan asserted 4th July that on that China-Pakistan Economic Corridor will be completed at any cost. He said that“The corridor is a manifestation of Pakistan-China friendship and the government will complete it at any cost and bring its fruit to every Pakistani”.

In an Interview with The Kootneeti, Dr Swaran Singh, Professor and Chairman of the Centre for International Politics, Organization and Disarmament, Jawaharlal Nehru University, New Delhi talked about implications of CPEC, its effects on the China-US trade war and changes in Global Order.

Q. China–Pakistan Economic Corridor has been in the news for various reasons. What according to you are the main implications of the CPEC on India?

Dr Swaran Singh: In spite of India’s serious concerns about its projects in Gilgit-Baltistan region being an infringement on India’s territorial sovereignty, China has continued to describe China-Pakistan Economic Corridor (CPEC) as ‘flagship’ project of its ambitious Belt and Road Initiative (BRI). CPEC also marks one of China’s major financial commitments — of over $62 billion of promised investments — involving a network of ports, rail, road, aviation, pipelines, power generation, hospitals. This physical infrastructure seeks to connect Pakistan’s Gwadar port to China’s Kashgar in its Xinjiang province. But it remains uncertain given that much of this region, especially Balochistan province of Pakistan, have remained turmoil ridden for decades and that Pakistan has come to be the breeding ground for extremists. This threat to CPEC can be measure from the fact that this is the only example in the history of all foreign investments where the investor nation has made host nation raise 10,000-strong force just to project Chinese assets and engineers. This month, China has even agreed to supply drones to Pakistan to further strengthen the safety and security of its CPEC investments. This increasing ‘securitisation’ of China’s so-called commercial investments clearly falls in place with traditional defence-centric China-Pak axis. So CPEC has continued to only further strengthen the power of Pakistani armed forces with obvious implications for India’s security.

Image source: AP

Q. Do you think CPEC will affect India in any way, if yes, how intense will the effects be?

Dr Swaran Singh: CPEC is an example of China’s rededicating itself in its one-sided indulgences with its all-weather ally, Pakistan. China had traditionally cultivated Pakistan’s military dictators primarily to take care of its soft underbelly of restive Muslim-majority Xinjiang as also to keep its peer civilisation India tied down to South Asia. The US-China rapprochement of the 1970s had only further cemented China-Pakistan axis because of (a) Pakistan having facilitated this US-China rapprochement and (b) in their working together in fighting the Soviet presence in Afghanistan that saw China and Pakistan working together in raising the Mujaheddin forces. This was period of Islamisation of Pakistan under General Zia-ul-Haque and saw Mujahids being succeeded by rising of Taliban that later hosted and nourished Al Qaida. This was also the time when Pakistan finally chose to un-wrap China-supplied nuclear technologies by developing its own nuclear weapons. The fact that departure of Soviet forces from Afghanistan had resulted in Mujahideen drifting to India’s Kashmir, Russian Chechnya, and China’s Xinjiang and that China was also being blamed for Pakistan’s nuclear weapons and later for the nuclear proliferation network of A Q Khan, saw China distancing itself from Islamabad from the late 1990s. China’s snub to Prime Minister Nawaz Sharif during the Kargil war of 1999 was its most apt example. However, from the time of President Xi Jinping coming to power from early 2013, this return of China to Pakistan has shown China willing to again keep India entangled in its immediate periphery while also weaning Pakistan away from the U.S. Moreover, this time round, China has not only focused on engaging Pakistan — which remains its most important pawn in South Asia — but also initiate serious engagement of all other South Asian neighbours of India. This has resulted in their gradual tilt towards Beijing which often reflects it their increasing anti-India orientations. Nepal’s ratcheting up territorial claims in midst of India-China border tension and Kathmandu’s continued anti-India rhetoric since provide its most apt example.

Image source: Fortune India

 Q. Pakistan occupied Kashmir, is legitimately a part of the Indian State according to International Law, what does it say to us about the project, will this pose any threat to the project’s completion?

Dr Swaran Singh: China’s projects in Gilgit-Baltistan — though only minuscule part of 3,000 km long CPEC — are in clear breach of India’s territorial sovereignty and New Delhi has repeatedly conveyed this to Beijing. Indeed, this has been India’s explanation as to why it can never support China’s BRI. But China sure needs India’s participation for its BRI projects to succeed for India remains China’s largest neighbour both in terms of economy and population that drives India’s increasing consumption which can make BRI projects commercially viable. So, India’s boycott of BRI provides a direct and palpable challenge to BRI and China fully understands. This is why China has repeatedly tried to propitiate New Delhi by proposing to change the name or map of the CPEC so that it does not call regions of its projects as ‘Pakistan’ which is how CPEC is currently named. The bigger threat to BRI, of course, remains from inside of Pakistan. Much of the region of CPEC remains a hotbed of extremist forces. It’s not just extremists who have repeatedly attacked and kidnapped Chinese in Pakistan. What about the ever-increasing unrest in Balochistan — especially Bloch Liberation Army — which have expressed their open opposition to CPEC which they see as siphoning away Bloch resources depriving the locals of their fair share in their own natural treasures. Moreover, with Covid-19 pandemic triggering a globe recession, China’s export and investment-led growth has already come under several stress. This has seen China re-orchestrating its BRI vision to focus on, not high-speech mega project as before, but only high-quality investments and encouraging domestic consumption inside China. So not just CPEC but the current format of China’s entire BRI has come under question.

Q. There is high debt quotient involved for Pakistan in this issue, do you think this project will take away the sovereignty of Pakistan if it defaults its debt payments?

Dr Swaran Singh: There is no doubt various high-speech turn-key mega projects of BRI in various politically unstable and least developed countries have resulted in China choosing to turn debt-in-equity to take over the management of these infrastructure projects. Gwadar and Hambantota remain its major examples in South Asia.  As these white elephant projects are not commercially viable they generate no revenues to empower the host nation to generate resources for repayments to China.  So when Singapore based port-management company could not bear loses it handed over Gwadar back to Pakistan which in turn agreed to grant China a 43-year lease for managing Gwadar port. The behaviour of Chinese inside Pakistan — their most allied ally — has often hit media headlines reflecting their newfound arrogance and misdemeanour. China’s diplomats have recently earned this new epithet of “Wolf Warriors” which all clearly speaks of China’s “New Era’ mindset of power projections. it is also true that no nation ever invests for philanthropy. So China’s fast-paced investments will continue setting in path dependencies for host nations and push forward China’s ‘extraction economy’ model where China’s sole motive remains accessing and exploiting resources of host nations.

 Q. Will the CPEC affect Pakistan’s relations with the US and its allies, given that ongoing US-China trade war is only expected to further worsen after the pandemic?

Dr Swaran Singh: There is no doubt that the ongoing two-year-old tariff war between the U.S. and China has been further exacerbated by President Trump’s failure to control the spread of pandemic Covid-19 and especially in wake of coming U.S. presidential elections. So the US will use all possible issues to pin China down and paint it as the villain.  The fact of Covid-19 started in China and Beijing’s initial neglect has raised a groundswell of worldwide anger against Beijing that has further emboldened President Trump’s anti-China tirades. 

Image source: The Diplomat

As for CPEC, this ever sharpening sabre-rattling of the US and China is certainly eroding the manoeuvring space for their frontline states like Pakistan. Recent blowing-hot-blowing-cold US relations with Pakistan has only made Islamabad all the more vulnerable to Beijing’s whims. All questions regarding the high costs of Chinese investments under CPEC have been put into the deep freezer for now.  Likewise, the initial interest shown in CPEC by China’s friends like Russia or Iran has also dried out. As for US friends and allies — not sure if they still see themselves in that light — they have all increasingly distanced their global initiatives making themselves increasingly autonomous of the United States. This has seen China building bridges and cultivating some these nations though Covid-19 pandemic has kept most nations busy fighting this health crisis at home as also sceptical of China making Beijing and Islamabad all the more dependent on each other’s superficial indulgences.

Q.  Do you think that the implementation of CPEC will give an upper hand to China in the Global Order?

Dr Swaran Singh: First of all, CPEC never had any game-changing potential and given its ground realities, its implementation has already come under enormous stress.  Covid-19 pandemic has pushed the world into a deep recession. April 14, 2020, World Outlook Report of the International Monetary Fund had forecast severe shrink for all developed economies. This has been further revised to the worse in their 25 June update which means global demand for trade and investment will be slowdown with direct impact on China’s $4.2 trillion annual foreign trade and its BRI investments. China has to unearth new ways of sustaining its growth rates which remains essential of the Communist Party has to stay in power. No doubt, the post-COVID-19 world may seen China least impacted given that at least China believes it has overcome this pandemic. But given that the whole celebration of China’s rise has been primarily driven by its impressive growth rates this slowdown is bound to make a major dent on its economy with having far deeper implications for its political and social trends at home. Therefore, even if CPEC continues to be described as the ‘flagship’ project of China’s ambitious BRI and continues to grow piecemeal, this overall downtrend will have a major impact on its timelines further slowing down timely completion of its various already long-delayed projects.

Image source: Dawn

 Q. Does India have any room to tap in this situation as an opportunity to harness its interest in the long term?

Dr Swaran Singh: India’s global engagement has only a limited connect or comparison to the rise or fall of China’s expanding global footprint, including the future of CPEC.  China’s spectacle has been specific to its economic rise, it’s becoming the world’s largest trading nation and emerging investor. So, China’s expanding global engagement has been primarily ‘commercial’ in nature with some political dividends no doubt. India’s global engagement conversely has been driven primarily by its ideological commitments to certain shared principles, its robust participation in international affairs and by its being the world’s largest democratic nation. India has a clear advantage of not being seen as a revisionist power or as a strategic competitor for any of the major powers. This obtains India credence and trust thus providing greater acceptance and deeper influence to its interventions and initiatives in addressing shared global challenges. No doubt India has also lately taken a greater interest in building physical and virtual connectivity, in expanding investments, and in taking global initiatives like International Solar Alliance. But to view these in the zero-sum equation with China’s initiatives will be underestimating India’s potential and imaginations. So even in case of its immediate region, India has expanded its connectivity with both its immediate and extended neighbours and these have recently seen India underlining its deep-rooted cultural and Diaspora linkages with various nations. Prime Minister Modi’s visits to temples, his hug-diplomacy and especially his mega-sized events for addressing the Indian community during his foreign visits have emerged unique leverage of India. These have surely expanded India’s space to manoeuvre in managing its policy of ‘multi-alignment’ while ensuring its ‘strategic autonomy’.  Recent invitation of President Donald Trump inviting India to join the coming G7 summit is not just one but only one recent example of the impact of India’s attractiveness as also its diplomatic finesse and footwork.

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The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of The Kootneeti Team

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Shanmugapriya Balasubramanian

Shanmugapriya Balasubramanian is a Former Journalism Intern at The Kootneeti's Asia Desk

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