The China-Pakistan Economic Corridor (CPEC): Underway and Under Threat

This essay is part of the series “All About China”—a journey into the history and diverse culture of China through essays that shed light on the lasting imprint of China’s past encounters with the Islamic world as well as an exploration of the increasingly vibrant and complex dynamics of contemporary Sino-Middle Eastern relations. Read more ...
 

A convoy of 150 Chinese trucks, carrying goods to be shipped abroad arrived at the newly-renovated port of Gwadar in Pakistan on November 12, after having travelled more than 2,000 kilometers from Kashgar in Xinjiang province.[1] At the completion of the run, the first consignment of cargo to traverse the China-Pakistan Economic Corridor (CPEC) was loaded onto Chinese vessels bound for the Middle East and Africa. Three weeks later, a second CPEC route was inaugurated, when a freight train carrying 500 tonnes of commodities left Kunming, capital of Yunnan, for Karachi.[2]

China is already Pakistan’s largest trade and defense partner. But the coming into operation of the CPEC lends a new meaning to, and could transform the relationship between these two “all-weather allies,” including insofar as their ties to the Middle East are concerned — provided that the territorial and maritime security challenges associated with the completion and use of this corridor can be satisfactorily addressed.

The China-Pakistan Economic Corridor (CPEC)

On April 20, 2015, China and Pakistan formalized plans for the China-Pakistan Economic Corridor (CPEC) agreement, laying the groundwork for one of the six main corridors comprising President Xi Jinping’s ambitious Belt and Road Initiative.[3] The CPEC, a bundle of projects — some agreed, several currently being implemented, and others still in the process of negotiation — consists of a 3,000 km network of roads, railway lines, energy pipelines and fibre optic cables.

Pakistan Prime Minister Nawaz Sharif and the country’s media have called the CPEC a “game changer.”[4] Chinese officials have described it as the “flagship project” of a broader policy aimed at enhancing “regional economic connectivity.”[5] The CPEC offers several potential benefits for China. The corridor not only affords the possibility of faster transport of energy supplies from the Persian Gulf, but also provides another access route to the Indian Ocean, thereby allowing supplies to bypass the Malacca Straits that could be blocked in times of tension.[6] Second, the corridor could help spur economic development in the landlocked western interior of China. Third, having a physical “footprint” in Gilgit-Baltistan could enable China to disrupt the movement of Uighur militants. Finally, the Gwadar Port could become a new regional service point for Chinese warships, along the lines of its base in Djibouti.

For Pakistan, the CPEC is more than simply a “route” or a “corridor.” Indeed, Pakistan is counting on the CPEC to drive future growth. Nearly three times more than the estimated $12 billion cost of building the road and railway network will be required to develop the energy infrastructure envisioned under CPEC for the purpose of alleviating Pakistan’s chronic energy shortages.[7] In November, China announced an additional $8.5 billion investment in Pakistan to upgrade the country’s main railway line from Karachi to Peshawar and to support construction of a liquified natural gas (L.N.G.) terminal and transmission lines.[8]

Yet, notwithstanding the progress made on the ground, the CPEC has fuelled political controversy and infighting in Pakistan, with provincial leaders wrangling over the allocation of routes as well as the pace at which projects are being implemented. Furthermore, there remain many unanswered questions and apprehensions, including those related to the economic viability of many of the projects associated with the CPEC.[9] The International Monetary Fund’s (I.M.F.) June 2016 report on Pakistan noted that while the CPEC would likely succeed in boosting investment and growth in the short run, it would entail risks of repayment obligations and profit repatriation in the medium to long term.[10]

Arguably the most important issues regarding the CPEC are those related to security. For China, the CPEC is viewed not simply as a trade-enhancing vehicle but as “an international effort to deliver security through economic development.”[11] Paradoxically, however, local terrorism and other nagging asymmetrical security threats — the very problems that this ambitious initiative seeks to ameliorate — pose serious risks for Chinese workers and companies engaged in project implementation and to the CPEC itself.

Security Challenges and Responses

Building the corridor of roads, railways and pipelines from northwest China to Pakistan’s Arabian Sea coast is, and likely will remain exceedingly difficult in light of the attendant security risks. Pakistan’s security situation continues to be precarious despite the success of anti-terrorism operations. The CPEC passes through the restive province of Balochistan as well as through Gilgit-Baltistan and Pakistan-occupied Kashmir (PoK).

Balochistan occupies a central place in the CPEC project. Priority was given to construction of the western route through the province in an effort to persuade residents that they would not be excluded. Nevertheless, Baloch nationalists still consider the corridor as “an occupation of Baloch territory.”[12] Balochistan Liberation Front (BLF) spokesperson Jeehand Baloch referred to the CPEC as “the China-Pakistan nexus to loot Baloch resources.”[13] Likewise, BLF leader Allah Nazar Baloch called the CPEC an “imperialist scheme,” and vowed to target the corridor.[14] Similar threats have been issued in Sindh, where China has been portrayed by some as accomplices of the “Punjabi establishment.”[15]

In recent months, violence in Balochistan has surged.[16] The Frontier Works Organization, which is engaged in road-building projects, has suffered several dozen casualties.[17] Two Chinese engineers were killed in September.[18] On the very day that the truck convoy carrying Chinese cargo en route to Gwadar approached the Baloch capital of Quetta, a powerful bomb blast struck the Sufi Shah Noorani shrine in Khudzar district[19] — an attack that though not aimed at the CPEC is nonetheless a stark reminder of its vulnerability.

There is some evidence that the spike in violence in Balochistan has caused heightened concern in China. The official Chinese daily Global Times reported that, “the increasing cost of security is becoming a big problem in efficiently pushing forward the project.”[20] Pakistani officials have gone to extraordinary lengths to assuage their Chinese counterparts’ concerns. During the November inaugural Kashgar-Gwadar cargo run and subsequent transfer of the containers to the vessels awaiting them at the port, the Pakistan Navy deployed its ships and aircraft to provide security cover to ensure safe and secure transit.

To date, Pakistan has deployed nearly 15,000 security personnel to safeguard roughly 7,000 Chinese nationals working on the CPEC, most of whom are located in Punjab.[21] Hussain Sayed, who chairs the parliamentary committee on the CPEC, has recently stated that Pakistan plans to double the size of the Special Security Division (SSD) by the end of March 2017.[22] Chinese officials have publicly lauded the precautions that Pakistan has taken.[23] But deploying the SSD has been somewhat controversial in Pakistan, as civilian leaders have had strong reservations about the terms under which the army advises, guides, and ‘indirectly’ controls local law enforcement agencies.[24]

The success of the CPEC and the Gwadar Port project also depends on the safe and secure maritime environment in the Indian Ocean region in general, and in the Arabian Sea in particular.[25] Within the maritime domain, the challenges include piracy, human trafficking, and smuggling. These varied sources pose two types of threat. The first is the possibility that militant groups or insurgents might attack seaports and vessels. The second is through container shipments, which insurgents could use to smuggle weapons, drugs and conduct human trafficking operations to finance their activities.

Nearly all of Pakistan’s trade is through sea lines of communication (SLOC). It is therefore not surprising that Pakistani authorities regard the seaward security of the port and associated sea lanes a major vulnerability and, consequently, have have made maritime security a top priority.[26] Nor is it surprising that the role of Pakistan’s maritime forces has increased since Gwadar became operational. The Pakistan Navy has been assigned special responsibility to protect Gwadar seaport project from offshore threats and the more than 500 Chinese working there. In January 2016, the Navy decided to deploy two additional Marine Battalions to provide around the clock security at Gwadar.[27]

Pakistan’s efforts to bolster its maritime security capabilities are wide-ranging. They include the stepping up of security patrols and coastal exercises, which has been facilitated by the creation of Coastal Watch Stations and the Joint Maritime Information Coordination Centre (JMICC); the establishment of the Force Protection Battalion (FPBn) of the Pakistan Marines; and the enhancement of maritime domain awareness.[28] Additionally, Pakistan has sought to engage in more robust collaborative maritime security activities. Here, the relationship with China is noteworthy. The two allies appear fully committed to full-spectrum maritime security cooperation (i.e., the protection of ports, vessels, and seal lanes). The fourth joint naval exercise that took place in November, this time in the open sea, is illustrative of the widening ambit of China-Pakistan maritime collaboration.[29]

In fact, Chinese support for Pakistan’s efforts to bolster its maritime capabilities has greatly expanded from equipment, logistics and training support to technology transfer. Motivated partly by Pakistan’s difficulty procuring certain platforms from Western sources, China-Pakistan cooperation extends to joint in-country construction of the F-22P frigate; and production of Azmat and Jalalat class fast attack craft and corvettes for the Pakistan Maritime Security Agency. In June 2015, Pakistan’s Ministry of Defence Production signed a contract with M/s China Ship Trading Company (M/s CSTC) for construction of seven Maritime Patrol Ships, four of which are being built in China and the others at the Karachi Shipyard and Engineering Works.[30] The confirmation by the China Shipbuilding Industry Corporation (CSIC) of its involvement in a project to provide the Pakistan Navy with eight attack submarines marks yet another milestone in this cooperation.[31] During the recent visit of the People’s Liberation Army Navy (PLAN) chief to Pakistan, both navies agreed to widen the scope of existing maritime exercises in order to improve interoperability.[32]

Limits and Liabilities

The China-Pakistan Economic Corridor (CPEC) represents a new and exceedingly ambitious model of cooperation for these two all-weather partners. The realization of the many developmental and prospective benefits for each of the two countries depends upon the successful completion of the myriad projects designed to lay the infrastructural latticework for multifaceted bilateral economic cooperation and regional connectivity. The persistence of non-traditional security threats makes the progress that has already been achieved in developing this infrastructure within the relatively short span of time since its conceptualization all the more remarkable. Yet, given the extent to which terrorist and militant outfits have entrenched themselves in Pakistan, inoculating the CPEC against them seems unlikely.  

To be sure, Pakistan has taken significant steps to develop and deploy — both on land and sea — the military assets deemed necessary to mitigate the risks associated with asymmetrical security threats to the CPEC. Indeed, China has supported these, and broader efforts by Pakistan to enhance its overall conventional military capabilities. However, increased China-Pakistan military cooperation is occurring against the backdrop of intensifying competition amongst the various regional states, including rising India-Pakistan tension and growing irritation between China and India. Thus, the very measures ostensibly aimed at tackling non-traditional security challenges could inadvertently heighten threat perceptions and fuel interstate rivalry, thereby accentuating the risks to the CPEC rather than ameliorating them.

[1] “Pakistan, China Jointly Open New International Trade Route,” Voice of America News, November 16, 2016, accessed November 26, 2016, http://www.voanews.com/a/pakistan-china-jointly-open-new-international-….

[2] “CPEC on track with first train from China to Pakistan,” Samaa.TV (Islamabad), December 1, 2016, accessed December 2, 2016, https://www.samaa.tv/economy/2016/12/cpec-on-track-with-first-train-fro….

[3] Currently, there are two main land-to-sea arteries under construction: one going south from Kunming, in China’s Yunnan province, through Myanmar to the coast, and the other (CPEC) cutting south from Xinjiang through Pakistan to Gwadar port on the Indian Ocean. For details on the One Belt, One Road (OBOR) initiative, see People’s Republic of China National Development and Reform Commission (NDRC), “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road,” March 28, 2015, accessed November 28, 2016, http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html.

[4] See remarks by Prime Minister Nawaz Sharif, quoted in “CPEC ‘game-changer’ for Pakistan, ‘fate-changer’ for region: PM,” Associated Press of Pakista (APP), August 29, 2016, accessed December 1, 2016, https://www.app.com.pk/cpec-game-changer-for-pakistan-entire-region-pm/. See also Syed Hamza and Saleem Gilani, “CPEC: The game changer,” The Nation, July 12, 2016, http://nation.com.pk/columns/12-Jul-2016/cpec-the-game-changer.

[5] Jeremy Page, “China Readies $46 Billion for Pakistan Trade Route, Wall Street Journal, April 15, 2015, accessed December 1, 2016 (Available at Lexis/Nexis.)

[6] See, for example, Ian Storey, “China’s ‘Malacca Dilemma,’” China Brief 6,8 (2006), accessed December 1, 2016, https://jamestown.org/program/chinas-malacca-dilemma/#.VsleY5MrJE4.

[7] Michael Kugelman, “Pakistan’s Other National Struggle: Its Energy Crisis,” The Wall Street Journal, July 9, 2015, accessed December 1, 2016, http://blogs.wsj.com/washwire/2015/07/09/pakistans-other-national-strug….

[8] Karen Strohecker, “Pakistan says China to make extra $8.5 billion investments in rail, energy,” Reuters, November 23, 2016, accessed December 2, 2016, http://uk.reuters.com/article/uk-pakistan-economy-cpec-idUKKBN13I1Y2?il….

[9] See, for example, Andrew Small, “CPEC: Road to the Future?” Herald, November 15, 2016, accessed December 1, 2016, http://herald.dawn.com/news/1153559; Rafaello Pantucci, “China–Pakistan: With Great Investment Comes Some Responsibility,” RUSI Newsbrief, July 5, 2016, accessed December 1, 2016,  https://rusi.org/sites/default/files/2016_newsbrief_july_pantucci.pdf; and Hanan Zaffar, “CPEC: Boon or Bane for Pakistan?” The Diplomat, November 16, 2016, accessed December 1, 2016, http://thediplomat.com/2016/11/cpec-boon-or-bane-for-pakistan/; and D. Suba Chandran, “Pakistan’s corridor of uncertainty,” The Hindu, November 29, 2016, accessed December 1, 2016, http://www.thehindubusinessline.com/opinion/pakistan-cpec-china-and-ind….

[10] International Monetary Fund (IMF), Pakistan Country Report, No. 16/207 (June 2016) 87, accessed December 16, 2016, https://www.imf.org/external/pubs/ft/scr/2016/cr16207.pdf.

[11] Daniel Markey and James West, “Behind China’s Gambit in Pakistan,” Council on Foreign Relations Expert Brief, May 12, 2016, accessed December 1, 2016, http://www.cfr.org/pakistan/behind-chinas-gambit-pakistan/p37855.

[12] Syed Raza Hassan, “To protect Chinese investment, Pakistan military leaves little to chance,” Reuters, February 8, 2016, accessed December 1, 2016, http://uk.reuters.com/article/pakistan-china-security-gwadar-idUKKCN0VH….

[13] Quoted in Mayank Pratap Singh, “Baloch rebels attack Dudher project site, 2 Chinese engineers killed, many hurt,” India Today, September 28, 2016, accessed November 29, 2016, http://indiatoday.intoday.in/story/baloch-rebels-attack-kills-two-engin….

[14] Asad Hashim, “Pakistan: BLF chief Baloch says Indian help ‘welcome,’” Aljazeera, September 29, 2016, accessed December 1, 2016, http://www.aljazeera.com/news/2016/09/pakistan-blf-chief-baloch-indian-…

[15] Imtiaz Ali, “Chinese citizen targeted in Karachi blast,” Dawn, May 30, 2016, accessed November 29, 2016, http://www.dawn.com/news/1261600.

[16] Sudha Ramachandran, “CPEC takes a step forward as violence surges in Balochistan,” Asia Times, November 16, 2016, access November 29, 2016, http://www.atimes.com/cpec-takes-step-forward-violence-surges-balochist….

[17] Baqir Sajjad Syed, “Civil-military differences hold up CPEC security plan,” Dawn, September 19, 2016, accessed November 29, 2016, http://www.dawn.com/news/1284724.

[18] “Baloch rebels attack Dudher project site, 2 Chinese engineers killed, many hurt,” Terrorism Watch, October 2016, accessed November 29, 2016, http://www.terrorismwatch.org/2016/10/baloch-rebels-attack-dudher-proje….

[19] Syed Ali Shah, Imtiaz Ali, and Ismail Sasoli, “At least 52 killed, 102 injured in blast at Khuzdar shrine,” Dawn, November 13, 2016, accessed December 3, 2016, http://www.dawn.com/news/1295928.

[20] Hu Weijia, “Increased ties with Southeast Asia don’t detract from China’s goals in the CPEC,” Global Times, September 13, 2016, accessed December 1, 2016, http://www.globaltimes.cn/content/1006157.shtml.

[21] Rajeev Deshpande, “15K Pakistanis guarding 7K Chinese working on China-Pakistan Economic Corridor,” The Times of India, September 12, 2016, accessed November 29, 2016, http://timesofindia.indiatimes.com/world/pakistan/15K-Pakistanis-guardi….

[22] Yuji Kurunuma, “Uighurs wary as China's vast aid influences Pakistan,” Nikkei Asian Review, November 16, 2016, accessed December 1, 2016, http://asia.nikkei.com/Politics-Economy/International-Relations/Uighurs….

[23] See, for example, China Foreign Ministry Spokesperson press conference remarks, quoted in “China commends Pakistan for security and smooth implementation of CPEC,” The Nation, September 30, 2016, accessed November 29, 2016, http://nation.com.pk/national/30-Sep-2016/china-commends-pakistan-for-s….

[24] Baqir Sajjad Syed, “Civil-military differences hold up CPEC security plan,” Dawn, September 19, 2016, accessed November 29, 2016, http://www.dawn.com/news/1284724.

[25] “Pakistan Navy Launches 3rd Fast Attack Craft Missile For Protection Of CPEC,” PakChinaNews.Pak, September 18, 2016, accessed September 29, 2016, http://pakchinanews.pk/pakistan-navy-launches-3rd-fast-attack-craft-mis….

[26] “Pakistan Navy accords high priority to maritime security of CPEC,” Pakistan Today, November 16, 2016, accessed November 29, 2016, http://www.cpecinfo.com/cpec-news-detail.php?id=NzU2.

[27] S.C. Kohli, “Pakistan Navy's distinctive plans to protect Gwadar seaport and Chinese there,” Merinews, February 24, 2016, accessed December 4, 2016, http://www.merinews.com/article/pakistan-navys-distinctive-plans-to-pro….

[28] Kaleem Kaushat, “CPEC -- Expanding Role of Pak Navy,” Pakistan Today, November 20, 2016, accessed November 26, 2016, http://www.pakistantoday.com.pk/2016/11/20/comment/cpec-expanding-role-of-pak-navy/; Rashid Mehmood Sheikh, “The Joint Maritime Information and Coordination Center,” in Andrew Forbes and Rowena Gaffney, Eds., Ionsphere, Edition V (Canberra: Sea Power Centre, 2015) 120-125, http://www.navy.gov.au/sites/default/files/documents/IONSPHERE_Edition_V_December_2015.pdf; CPEC ships being guarded by navy vessels,” Dawn, November 16, 2016, accessed November 26, 2016, http://www.dawn.com/news/1296678/cpec-ships-being-guarded-by-navy-vessels; and “Maritime security of CPEC top priority: Pakistan Navy,” Daily Times, November 16, 2016, accessed November 26, 2016, http://dailytimes.com.pk/pakistan/16-Nov-16/maritime-security-of-cpec-t…; Mateen Haider, “Pakistan-China Sign Agreement for MSA Patrol Vessel,” Dawn, June 10, 2015, accessed November 26, 2016, www.dawn.com/news/1187352; and Anwar Saeed, “The Evolving China-Pakistan Maritime Economic Relationship in the Indian Ocean,” Soundings 13 (2016), accessed November 26, 2016, http://www.navy.gov.au/sites/default/files/documents/Soundings_Paper_No….

[29] Quoted in Shazia Hasan, “Navies of Pakistan, China begin their fourth joint exercise,” Dawn, November 18, 2016, accessed November 29, 2016, http://www.dawn.com/news/1297067/navies-of-pakistan-china-begin-their-f….

[30] Mateen Haidar, “Pakistan China sign agreement for MSA patrol vessels,” Pakistan Defence, June 10, 2015, accessed Novemer 29, 2016,  http://defence.pk/threads/pakistan-china-sign-agreement-for-msa-patrol-vessels.380243/#ixzz4RRutteov; and “PN, PMSA to provide foolproof security to Gwadar port, CPEC sea routes,” Daily Times, August 2, 2016, accessed November 26, 2016, http://dailytimes.com.pk/sindh/02-Aug-16/pn-pmsa-to-provide-foolproof-s….

[31] “China to export eight submarines to Pakistan,” NavalToday.com, October 17, 2016, accessed December 4, 2016, http://navaltoday.com/2016/10/17/china-to-export-eight-submarines-to-pa….

[32]  See, for example, Koh Swee Lean Collin, “China and Pakistan Join Forces Under the Sea,” The National Interest, January 7, 2016, accessed December 4, 2016, http://nationalinterest.org/feature/china-pakistan-join-forces-under-the-sea-14829?page=3; “Pak-China naval collaboration gains more importance due to CPEC,” Dawn, November 21, 2016, accessed December 4, 2016, http://www.dawn.com/news/1297739; and “China hails Pakistan Navy’s role in maritime security,” Dawn, May 19, 2016, accessed November 26, 2016, www.dawn.com/news/1259271.