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Opinion: Why China, and not Pakistan, stands to gain from CPEC

Chinese neutrality in FAFT affects the China Pakistan Economic Corridor project which is a part of China's Belt and Road initiative. Photograph: (Reuters)

Noida, Uttar Pradesh, India Jan 11, 2018, 09.09 AM (IST) Major Amit Bansal

Pakistan started the work on China-Pakistan Economic Corridor (CPEC) with much fanfare and a lot of exaggerated publicity; they hoped, CPEC is going to change the future of their country but the reality talks differently. From the very first day, differences between Pakistan and Chinese authorities were visible, for instance, suspension of Chinese work at Daimer- Bhasha Dam. When China decided to invest over 60 Billion Dollar in a rogue nation, it failed to analyse whether Pakistan is secure enough for such massive foreign engagement and, if yes, can this engagement sustain in the future too?

 

After repeated interventions by China, and their request for a comprehensive security cover to their assets, Pakistan created a special security division in early 2017. The division consisted of a large force of over 15,000 soldiers but, in the end, it has actually failed to provide security as the attacks on the labour and other installations have continued since then. 

 

There is a serious concern towards the success of CPEC in addition to the financial and diplomatic differences between Pakistan and China, and that is terrorism. Many attacks on CPEC related projects have happened in Pak and future attacks cannot be ruled out. The violence has also caused major setbacks to the project. In fact, Pakistan has been hiding the security risks pertaining to the projects under the claim of economic development. Since the work has started, there has been the killing of over 100 people and this includes a sizeable number of Chinese personal too. 

 

So far Pakistani authorities are perceiving the threat only in Baluchistan and, hence, a sizeable portion of this CPEC security division is stationed in that area. However, it failed to understand that, in the aftermath of defeats in Middle east, the ISIS fighters are also looking for an alternative territory from where they can re-launch themselves. Incidentally, they cannot have a better option than Pakistan. It is highly possible that ISIS may form a coalition with Taliban and Haqqani network to establish its foothold in Pakistan, a situation which is going to create tensions not only for Pakistan and China but also for India. 

 

For the ISIS, US, Europe and China are the enemies, and they have reiterated it time and again. As per a statement of the Syrian Ambassador to Beijing, ISIS has about 5000+ Uighur fighters in its cadres, and this implies a very serious situation. If ISIS does come to Pakistan, planned targeting of Chinese assets cannot be ruled out while the killing of Chinese officials by these Uighur fighters is a high possibility. There are also possibilities that these ISIS fighters could form a coalition with Baloch Guerrillas which will be catastrophic as a major part of CPEC is in Baluchistan. Currently, most of the attacks on CPEC are happening in Baluchistan only. 

 

Even if Pakistan mobilises all its forces and able to counter the threat of Baloch Guerrillas as well as the ISIS terrorists, it has a long list of problems ahead. The country which used to survive with the help of aids of other countries, especially America, is poorly performing in its development. The economy is sinking and they are under a false assurance that CPEC will start showering them with trillions of dollars instantly. The same assurance is passed on to their innocent public by their corrupt politicians too. 

 

But what they must understand, the CPEC is not a boon given by China to its "best friend" Pakistan. When China moved in to decide on this partnership, there was nothing called friendship in this case. China was looking for an alternative route for its oil and gas as well as exports to other countries. At present, almost 100% of China’s maritime exports are through the strait of Malacca and, with the ongoing tension in the South China Sea, the blockade of this route by the United States cannot be ruled out. As a result, China had no option but to look for alternative routes to his supplies. 

 

With the present CPEC, China is not only getting the shortest route for its exports to the Western countries but also ensuring a smooth passage to its oil supplies by a dedicated pipeline from Gwadar to Xinxiang. On one hand, this is a win-win situation to China, but for Pakistan, it is a going to be a disaster. A major portion of the investment is coming in the form of a loan. So, here we have a funny situation: China is giving a loan, not to Pakistan, but its own Chinese companies which are building infrastructure for the use of Chinese businesses and the loan will be repaid by Pakistan with massive interest. 

 

So, except the development of infrastructure and few jobs to the Pakistani people in CPEC related projects, Pakistan is not achieving anything out of it. The revenues which it is likely to get from this infrastructure will be taken away by the Chinese companies. It is understood that, as per the agreement, the revenue of these projects will be shared between China and Pakistan. But the reality is something different. 

 

While Chinese companies will take away their lion’s share of profits, they will also consume the Pakistani share towards the repayment of loan and interest which they invested for this project. What Pakistan is going to get is a clear question. The situation is not going to improve anyway.  

 

Moreover, with the recent developments, such as declaring Chinese Yuan as major international trade currency, establishing of Chinese military bases in Pakistan and operationalising the Chinese Banks and other financial institutions in Pakistan, it is very much clear that even if the CPEC becomes successful, the Pakistan is going to be subservient to China anyway. 

 

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

 

Major Amit Bansal

Major Amit Bansal is is a Defence Strategist with keen interests in International Relations and Internal Security. He is also an author, blogger and poet.

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