Despite decades of mismanagement and a feeble socioeconomic infrastructure, one thing Pakistan benefits from is a strategic location—and China is taking notice.
More than 70% of China’s trade and energy imports travel through the Indian Ocean and the pirate-swarmed Strait of Malacca, both patrolled by the United States and Indian navies. But this possible chokepoint is a security issue for China, particularly in terms of oil (40% of its general consumption passes through the strait). Any sort of conflict could cut off the country’s energy supply, and ships would need to travel an extra 500 miles to avoid the strait, currently the fastest route from the Indian Ocean to the Pacific. China, aware of this vulnerability, is looking to Pakistan to provide a shorter and safer alternative.
The China-Pakistan Economic Corridor (CPEC), first proposed in 2013, is a massive project of rail links, special economic zones, dry ports and other infrastructure projects across Pakistan allowing for direct access to the Indian Ocean. It would connect Gwadar to Kashgar, a major trading hub in China, and abbreviate the current route to the Persian Gulf by more than 10,000 kilometers. Instead of 45 days, it would take China a mere 10 days to get its imports—all while avoiding any potentially contested channels near Taiwan, Vietnam, the Philippines, Indonesia and India, and eventually lowering shipping costs.
The CPEC would also provide China with an entry point to the Arabian Gulf, thus widening its geopolitical influence and possibly its military presence in the region. (Some Indian intellectuals suspect the Gwadar port will serve as a Chinese naval facility.) And it only comes at a cost of about $40 billion.
Despite decades of mismanagement and a feeble socioeconomic infrastructure, one thing Pakistan benefits from is a strategic location—and China is taking notice. (AP Photo/B.K. Bangash)
This isn’t the only investment China has planned in Pakistan. In fact, the money going to the country is double what Pakistan has received in foreign direct investment since 2008, and larger than any shape of assistance from the U.S. The list below (including CPEC) is just a snapshot of upcoming projects, likely funded by the Bank of China, the Export-Import Bank of China and the proposed Asian Infrastructure Development Bank:
- $3.7 billion for a Karachi-Lahore-Peshawar rail line
- $2.8 billion for developing four coal-fired stations with a capacity of 1,980 megawatts in Thar (Sindh)
- $2.2 billion for two coal-mining blocks in Thar (Sindh)
- $2 billion to build a natural gas pipeline between Gwadar and Nawabshah, then connecting to Iran
- $2 billion to develop coal-fired generation plants at Port Qasim Karachi
- $1.6 billion for a hydropower project in Karot
- $1.2 billion for a solar power park in Bahawalpur
- $930 million to link the Karakoram highway to Islamabad and Havelien
- $260 million for a 100 megawatt wind farm in Jhimpir
- $230 million to build the Gwadar International Airport
It is all part of China’s quest for influence throughout the continent via aid and investment. After decades of shying away from aggressive foreign policy moves, China now wants to play a much bigger regional role and is pushing plans for interconnected infrastructure networks to better link its economy with rest of Asia, the Middle East, Africa and Europe. Think of it as the new Silk Road.
Of course, the upside isn’t just for China. Gwadar is located in Baluchistan, Pakistan’s largest and most troubled providence, but its potential for resources, such as natural gas and coal, is enormous. Many see the CPEC as a way of stabilizing the region and boosting its economy—perhaps even easing tensions by providing employment for locals. And the country could become a center for energy transmission from the Gulf.
Long-Standing Security Ties
Pakistan and China have long-standing strategic ties, dating back five decades. China maintains a robust defense relationship with Pakistan and views a strong partnership with Pakistan as a useful way to contain Indian power in the region and divert Indian military force and strategic attention away from China. The China–Pakistan partnership serves both Chinese and Pakistani interests by presenting India with a potential two-front theater in the event of war with either country. Chinese officials also view a certain degree of India–Pakistan tension as advancing their own strategic interests, as such friction bogs India down in South Asia and interferes with New Delhi’s ability to assert its global ambitions and compete with China at the international level.
China is Pakistan’s largest defense supplier. The Chinese JF-17 Thunder fighter aircraft is currently under serial production at the Pakistan Aeronautical Complex, and an initial batch of 250 to 300 planes is scheduled. China also plans to provide Pakistan with J-10 medium-role combat aircraft, with an initial delivery of 30 to 35 planes. Other recent sales of conventional weapons include F-22P frigates with helicopters, K-8 jet trainers, T-85 tanks, F-7 aircraft, small arms, and ammunition. China also helped Pakistan build its Heavy Mechanical Complex, Aeronautical Complex, and several defense production units. While the U.S. has sanctioned Pakistan in the past—in 1965 and again in 1990—China has consistently supported Pakistan’s military modernization.However, when Pakistan’s defense minister claimed that Pakistan had invited China to start building a naval base at Gwadar Port, Chinese officials publicly dismissed the notion.
Pakistan and China have long-standing strategic ties, dating back five decades. China maintains a robust defense relationship with Pakistan and views a strong partnership with Pakistan as a useful way to contain Indian power in the region and divert Indian military force and strategic attention away from China. The China–Pakistan partnership serves both Chinese and Pakistani interests by presenting India with a potential two-front theater in the event of war with either country. Chinese officials also view a certain degree of India–Pakistan tension as advancing their own strategic interests, as such friction bogs India down in South Asia and interferes with New Delhi’s ability to assert its global ambitions and compete with China at the international level.
China is Pakistan’s largest defense supplier. The Chinese JF-17 Thunder fighter aircraft is currently under serial production at the Pakistan Aeronautical Complex, and an initial batch of 250 to 300 planes is scheduled. China also plans to provide Pakistan with J-10 medium-role combat aircraft, with an initial delivery of 30 to 35 planes. Other recent sales of conventional weapons include F-22P frigates with helicopters, K-8 jet trainers, T-85 tanks, F-7 aircraft, small arms, and ammunition. China also helped Pakistan build its Heavy Mechanical Complex, Aeronautical Complex, and several defense production units. While the U.S. has sanctioned Pakistan in the past—in 1965 and again in 1990—China has consistently supported Pakistan’s military modernization.However, when Pakistan’s defense minister claimed that Pakistan had invited China to start building a naval base at Gwadar Port, Chinese officials publicly dismissed the notion.
Pakistan launching projects to boost regional trade through rail-road networks
Pakistan's Minister for Finance, Senator Mohammad Ishaq Dar said Thursday that Pakistan has the potential to become regional transit trade hub as envisaged by the Prime Minister by connecting it with all other regional countries through rail and road networks.
“We are actively engaged in all the developmental projects to facilitate regional trade for the socio economic benefit of the people and prosperity of the country “, Ishaq Dar said while addressing the International Development Partners Conference on Integrated Transit Trade Management System was organized by the Federal Board of Revenue (FBR) here.
However, he said “we have not been able to tap the full potential of our unique geographical location due to security issues”.
“The PML-N government is working on development of economic corridor worth $25 billion which will link Gawadar with Kashghar through motorway”, Ishaq Dar remarked.
The Finance Minster said that the economic corridor would be a win- win project not only for Pakistan and China but also for all other regional countries.
He said Pakistan was also signatory of Central Asia Regional Economic Cooperation (CAREC) which had decided to develop a rail and road routes linking China, Central Asia and South Asia to get huge economic potential of the three regions.
Trade also Lagging
Trade is not exaggerated by Pakistan or rendered unclear by Chinese secrecy. As with investment and (apparently) finance, though, it is relatively insubstantial. On Chinese figures, bilateral trade volume was below $9 billion in 2010 and grew slightly less quickly than the PRC’s overall trade. The Philippines are similar to Pakistan in GDP and not as close politically with China. The Philippines mining sector is underdeveloped. Yet China’s bilateral trade with the Philippines in 2010 was still three times larger than its trade with Pakistan, and grew faster.
Pakistan FWO Completes Building Over Half of CPEC Western Route
“The Frontier Works Organization (FWO) has built roads with 502 kilometers length on the western alignment of China Pakistan Economic Corridor (CPEC) to link Gwadar with other parts of the country. The FWO took up the challenge to extend the benefits of Gwadar port to rest of the country by building roads in rugged mountainous terrain and highly inaccessible areas. The gigantic task was undertaken on the directives of Chief of Army Staff General Raheel Sharif."
Frontier Works Organization:
Of the three land routes being constructed as part of the China-Pakistan Economic Corridor (CPEC) project to connect Pakistan's deep sea Gwadar Port on the Arabian Sea with western China, the western route is the most challenging. In addition to the difficult mountainous terrain in KP and Baluchistan provinces, the western route runs through Panjgur and Turbat where there is an active Baloch insurgency believed to be aided by India via Afghanistan. It's being built by Pakistan Army's Frontier Works Organization.
Three CPEC Routes: Western, Central and Eastern
Major Milestone:
The completion of construction of 502 km of the 870 km length of the western alignment represents a significant milestone for Pakistan Army and the Frontier Works Organization. It is expected to become operational by the end of 2016.
Summary:
Construction work on CPEC is already stimulating economic activity in Pakistan as indicated by rising domestic cement demand in the country. It was up 8% year over year in 2014-15. Cement sales are considered a barometer of development activity. A recent assessment by Ruchir Sharma, head of Morgan Stanley's emerging markets, has said Pakistan's economy is growing more than twice as fast as emerging markets other than India and China. In a piece titled "Bucking stagnation elsewhere, the quiet rise of South Asia", Sharma particularly mentions the Chinese CPEC investment of $46 billion as a positive for Pakistan. "Pakistan’s manufacturing sector is now growing, due to both increasing electric output and the fact that – like Bangladesh – its young population and labour force is expected to continue expanding for at least the next five years", says Sharma.
Conclusion
China’s concerns about the future development of Pakistan will likely limit the extent to which it will help Pakistan out of its economic difficulties. While China has an interest in maintaining strong security ties with Pakistan, the notion that Chinese ties could serve as a replacement for U.S. ties is far-fetched. Instead of wringing its hands over Chinese influence with Pakistan, the U.S. should seek Beijing’s cooperation in encouraging a more stable and prosperous Pakistan.
Conclusion
China’s concerns about the future development of Pakistan will likely limit the extent to which it will help Pakistan out of its economic difficulties. While China has an interest in maintaining strong security ties with Pakistan, the notion that Chinese ties could serve as a replacement for U.S. ties is far-fetched. Instead of wringing its hands over Chinese influence with Pakistan, the U.S. should seek Beijing’s cooperation in encouraging a more stable and prosperous Pakistan.
