China-Pakistan Economic Corridor (known by the acronym CPEC) is a bundle of infrastructure projects currently under construction across Pakistan. The original value of $46 billion has been inflated to $62 billion. It could rise further according to some projections. CPEC is essentially intended to open up a new trade route for China via Kashmir, all the way to Gwadar in Arabian Sea. Both countries believe that the new trade route would become a game changer in the next 20-30 years. CPEC also promises to rapidly modernize Pakistani infrastructure, leading to rapidly accelerating Pakistan's economy. CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia. An 1100-kilometre-long motorway will be built between the cities of Karachi and Lahore as part of CPEC; Pakistan's railway network will also be extended to eventually connect to China's Southern Xinjiang Railway in Kashgar. The estimated $11 billion required to modernise transportation networks will be financed by subsidized concessionary loans. Several other projects across Pakistan have been planned. CPEC is seen as the poster boy of Chinese President Xi Jinping's Belt and Road Initiative. Should this not take off for any reason the major BRI projects would automatically come under a cloud.
As the showpiece project of the larger Belt & Road Initiative (BRI) takes off, Chinese apprehensions about conditions on the ground in various provinces of Pakistan keep growing. There are several reasons for this. The main reason relates to Balochistan. Recently there were reports that the Chinese have made direct contact with Baloch leaders. The rationale for these talks even if they take place remains the difficulties that CPEC is facing in Balochistan. Both the Chinese and the Baloch leaders have denied that such talks have taken place; a leader who was in Delhi averred that not a single Chinese would be allowed to remain in their territory. In fact, he maintained that the much talked about convoy that reached Gwadar recently had been provided with a large military escort. In spite of that some elements had been able to fire on the convoy and cause casualties.
Balochistan remains a dilemma for the Chinese with no end in sight. The Baloch resistance against Chinese exploitation enjoys the support of the entire Baloch nation according to their leaders. There have been instances of killing of Chinese, not all of them are reported. In the first week of February the Chinese general manager of their shipping major Cosco Shipping Lines Company was shot dead in Karachi the financial hub of the country. Last June, the IS had kidnapped and killed two Chinese nationals in Balochistan. Chinese will remain vulnerable in several provinces that feel left behind compared to the investments being made for the benefit of Punjab province of Pakistan. Chinese workers also remain vulnerable to kidnapping for ransom.
Were headaches for the Chinese related only to Balochistan they would have somehow managed by heightened security for the main corridor to Gwadar. The vulnerability is on several other counts as well as the investments increase. While the military brass and the civilian government had both agreed to CPEC nobody is clear as to the terms of the agreement. This lack of transparency is worrying a lot of people in Pakistan; added to that the debt burden that would accrue. The indebtedness of Sri Lanka is often mentioned in this regard. The Chinese know that they have nothing in common with the ordinary people of Pakistan. The bonhomie is restricted to the top echelons that keep interacting with each other. The current political situation in Pakistan is being seen as struggle between the military and judiciary on one side and the former Prime Minister and his political party PML (N). Although the former might attempt to create differences in the leadership, the hold of the Party in Punjab is unlikely to be shaken any time soon. The difficulties at the governance apex are not only a current worry for the Chinese they are more worried looking ahead as the differences deepen. The nightmare situation for them is being forced to take sides or being sucked into the governance quagmire.
Worry related to the non-Punjab provinces is likely to increase as the projects fructify. In addition to Balochistan people in the other provinces are becoming increasingly aware that the whole exercise is really to boost the economy and well-being of Punjab at the cost of the provinces. They cannot fail to see the heavy expenditure taking place on the Motorway that will link Lahore to Karachi. Further, the electricity generation projects will also directly benefit Punjab. Projects elsewhere will basically transmit electricity to Punjab benefiting them only peripherally. The cost of the electricity generated will impoverish people even further. Going into details the disparity between the CPEC outlays in Punjab compared to the remaining provinces gets magnified. As the projects take off unrest in the provinces that have never been happy with Punjab will increase. The anger will largely be against the Chinese requiring additional security whose cost will have to be factored in.
China is worried that when the corridor linking Kashgar to Gwadar is through and people actually see that their goods are flooding Pakistan and destroying local industry the Chinese security headaches could increase to an extent that escorts would have to be provided to practically every Chinese person, who will most probably have to move into gilded ghettos for their safety. In sum will the Chinese of successor generations be prepared to face the undying hostility of their ally with whom their friendship has been touted as higher than the Himalayas and deeper than the Oceans. The two-way traffic will also cause security headaches. As it is the Chinese are worried about the start point of the Corridor from their side, the Kash region. After earlier riots in this particular region in the South the Uighur population has now increased to over 97 percent while the Han population has declined from 6 percent to 2 percent.
For all the above reasons the Chinese have been keen for India to come on board. They are aware that the routes pass through territory that is disputed between India and Pakistan. Unless that is resolved a question mark will always remain about the viability of the project. For India to come on board - which would bring great relief to the Chinese - they would have to acknowledge that the territory is disputed. As in the case of the boundary question which has been put on the backburner while economic engagement continues apace, the Chinese will have to make several more concessions to India. These would include, inter alia, greater transparency, lateral connectivity Eastward and Westward for which India would be a full and equal partner and free movement for Indian industries in the project areas. Currently the Chinese would be reluctant to concede any of these to India. It is possible that as their difficulties reach the point of being unmanageable the Indian option might start looking attractive.
Before India decides to come on board should enough concessions be made by China to get out of its difficulties the comments by former ambassador of Pakistan to India Ashraf Jehangir Qazi, one of their ablest diplomats, should be taken into account. Ambassador Qazi wrote in Dawn (reproduced in The Age on Sunday 10 December 2017) "Why should India try to destroy Pakistan when the country's rulers are doing it themselves. Last June, the Crown Prince of Saudi Arabia referred to Pakistan as "a slave country". He can summon the Prime Minister and the Army Chief at a moment's notice - even in the midst of a major domestic crisis" He goes on to say "Leave India and the US aside. They are unfriendly countries. What about China? What must it think as it beholds the endlessly silly and scary spectacle in Pakistan? What future can it envisage for CPEC and its strategic partnership with Pakistan? At the very least it will be compelled to have alternate plans. With religious extremism rampant in Pakistan, what assurances can Pakistan credibly extend to China or any other country with regard to stopping extremists from using its territory against them"?
Author Third Millennium Equipoise
New Delhi, Feb 25 2018