CPEC: Assessing the Overhyped ‘Game-Changer’ Impact

A recent report by Nikkei Asia claims that China has rejected Pakistan’s proposals for new projects under the China-Pakistan Economic Corridor (CPEC), the $50 billion Pakistani component of the Belt and Road. The report reveals that China turned down Pakistan’s suggestions to add more projects related to energy, climate change, electricity transmission lines, and tourism under the CPEC. Both Beijing and Islamabad would like to deny this claim, but the report contains details that indicate things aren’t as rosy as they seem.

The Joint Cooperation Committee meeting was held in October last year, but the minutes were ratified only in July this year. Beijing also rejected Islamabad’s proposal for a 500 KV transmission line to connect the port city of Gwadar to the national electricity grid from Karachi. Beijing has also refused to entertain Islamabad’s simple demand for relocating a 300-megawatt coal-fired power plant in Gwadar to facilitate the use of domestic coal.

The report is expected to elicit a response from Islamabad’s ‘Iron Brother’ Beijing, who is expected to praise the Sino-Pak friendship. However, the question remains whether the response will come out in the form of an outright rebuttal of disclosures made by two unnamed officials to Nikkei Asia or by playing down the embarrassing truth by trumpeting the CPEC success story.

Pakistan’s economic situation and increasing unemployment contradict Zaidong’s claim that China’s Belt and Road Economic Corridor (CPEC) has injected “strong momentum” into the country’s economy and social development. The lack of transparency regarding CPEC contracts and the suspicious secrecy surrounding interest rates for Beijing’s lavish loans to Islamabad raise suspicions about the CPEC’s true intentions. In 2017, media reports of corruption in CPEC’s infrastructure projects led to Beijing temporarily stopping funding for three major road projects. In 2017, retired Lt Gen Asim Saleem Bajwa’s financial empire was revealed, fueling speculations that he was dipping into the CPEC’s funds.

However, the Chinese ambassador to Pakistan has tried to convince the world that CPEC is well. Andy Mok, a senior research fellow at the Center for China and Globalisation, claims that China’s approach to Belt and Road investments is guided by prudence and long-term sustainability. He also argues that concerns like political instability in partner countries like Pakistan necessitate greater caution, especially regarding the safety of Chinese nationals.

Despite the hype about CPEC being a game changer for Pakistan, it is important to remember that Beijing primarily conceived CPEC to further its own strategic and commercial interests. Pakistan has paid a heavy price for China’s ambitions, with external debt rising due to investment in the project, machinery and material imports, and heavy loans taken from Chinese banks at near-commercial rates of interest. Special privileges for Chinese players, such as permitting uncontrolled trawling off the Gwadar coast and giving them tax exemptions, have marginalized locals and sparked public ire. The ‘Gwadar Ko Haq Do’ movement, which saw a massive turnout of women, has also been a significant issue.

The escalating punitive actions against innocent civilians as retribution for attacks by Baloch freedom fighters on CPEC assets and Chinese workers to protest the exploitation of the region’s natural resources have further invigorated separatist ideology. Additionally, allowing CPEC projects in Pakistan’s occupied Jammu and Kashmir has compromised Islamabad’s narrative of J&K being a ‘disputed territory’.

Despite CPEC not meeting Pakistan’s expectations, it is crucial for Islamabad to repay the estimated $30 billion loan that Beijing has extended at commercial rates of interest to maintain the ‘ sweeter than honey’ relationship between the two countries and prevent China from becoming the master.

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