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CHINA’S CAUTIOUS APPROACH TO CPEC 2.0 WITH PAKISTAN



  Jun 17, 2024

CHINA’S CAUTIOUS APPROACH TO CPEC 2.0 WITH PAKISTAN



What is CPEC?

The China-Pakistan Economic Corridor (CPEC) is a $62-billion infrastructure project launched in 2015. It includes the construction of the Gwadar seaport, power plants, and road networks across Pakistan. CPEC is a component of China’s Belt and Road Initiative (BRI), aiming to connect Pakistan’s ports in Gwadar and Karachi to China’s Xinjiang region.

What happened during Pakistani PM Shehbaz Sharif’s recent visit to China?

Pakistani Prime Minister Shehbaz Sharif’s recent five-day visit to China ended with modest gains, falling short of expectations for major new investments under an upgraded version of CPEC. Despite high-level meetings, including with Chinese President Xi Jinping, the anticipated formal launch of CPEC-II did not materialize.

What were the outcomes of the visit?

The visit yielded a 32-point joint statement with vague references to an “upgraded version” of CPEC. However, the only concrete agreements were the advancement of the $6.7-billion Main-Line-1 (ML-1) railway project in stages and an upgrade to a portion of the Karakoram Highway.

Why is China hesitant to invest more in Pakistan?

Experts suggest that China is cautious about further investments in Pakistan due to its “long-term poor economic circumstances,” labeling it a “financial black hole.” Pakistan’s recent request to restructure over $15 billion in power-plant debt owed to Chinese energy producers underscores its financial struggles. Moreover, ongoing security concerns, particularly regarding the safety of Chinese nationals in Pakistan, have made Beijing wary.

What are the geopolitical implications?

China’s cooling stance on investing in Pakistan has significant geopolitical implications. While China needs to maintain the facade that CPEC is functioning, the reality is that further progress may be slow. This lukewarm response could signal a shift in China’s investment strategy in the region.

How does this affect India?

India has always viewed CPEC with suspicion due to its strategic implications, especially considering the corridor runs through Pakistan-administered Kashmir. Reduced Chinese enthusiasm for CPEC could ease some of these concerns, though it remains crucial for India to monitor developments closely.

What are the security challenges for CPEC?

Security remains a significant challenge for CPEC. Recent militant attacks on Chinese workers have led China to call for robust anti-terrorism measures from Pakistan. Islamabad has committed to ensuring the safety of Chinese workers and projects, but the effectiveness of these measures remains to be seen.

Conclusion

While CPEC remains a major enterprise in terms of rhetoric, practical progress has slowed. China’s cautious approach towards further investments in Pakistan reflects the complexities of economic, security, and geopolitical challenges in the region. India, as a regional player, must stay vigilant and adapt to these evolving dynamics.




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