Friday, 18 November 2016

China - Pakistan Economic Corridor

So, What is exactly the CPEC project ?

China - Pakistan economic corridor refers to an under-construction and partly completed economic corridor aimed to facilitate trade along an overland route that connects Kashgar and Gwadar through construction of network of highways, railways, and pipelines worth nearly $51 billion. Several other road, rail and power projects are associated with the corridor, and the project seeks to expand and upgrade infrastructure across the length and breadth of Pakistan, and to widen and deepen economic ties with its “all-weather friend”, China. Chinese firms will invest just under $ 46 billion in the project over six years — including $ 33.8 bn in energy projects and $ 11.8 bn in infrastructure.

CPEC Rout
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China's interest


So, it's a fact that the benefits for this "CPEC" are going to be more towards China rather than Pakistan as, now China, which is one of the biggest exporters in the world, would have to cover a much lesser distance to export goods. Rather than coming from all across the South China Sea then to Indian Ocean and then to Arabian Sea, that too by ships, the exports would just be a matter of hardly few hours due to the strong railway network being built their. With China's economy growing at a rate of more than 8%, strongly giving competition to the current major powers of this world, China wants to make a statement. With increasing influence in the Asian continent, China is raising. The CPEC is part of  China’s larger regional transnational ‘One Belt One Road’ (OBOR) initiative, whose two arms are the land-based New Silk Road and the 21st century Maritime Silk Road, using which Beijing aims to create a Silk Road Economic Belt sprawled over a large patch of Asia and eastern Europe, and crisscrossed by a web of transport, energy supply and telecommunications lines.


One belt One road
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Gwadar lies close to the Strait of Hormuz, a key oil shipping lane. It could open up an energy and trade corridor from the Gulf across Pakistan to western China, that could also be used by the Chinese Navy. The CPEC will give China land access to the Indian Ocean, cutting the nearly 13,000 km sea voyage from Tianjin to the Persian Gulf through the Strait of Malacca and around India, to a mere 2,000 km road journey from Kashgar to Gwadar.


There is no doubt that these corridors can be used for military movement at the times for urgency, and this fact increases threat to India. Because in urgent situations, it would be very easy for China and Pakistan to use these corridors to encircle India from above However, India is fully prepared for this situations. But we hope that these economic corridors are not used for any of these purposes.

China has always supported Pakistan on international platforms. Be it on the account of terrorism or blocking India's entry to NSG. There is no doubt that it all happens on requests from Pakistan to China, since China is using Pakistan for becoming the super power, they have to put forward their steps in favour of Pakistan. China did the same in UN when proposals were made to declare Masood Azhar a terrorist globally. China used it's veto to make decisions in favour of Pakistan. A simple question is that, what led China to support Pakistan at a global platform, that too on a huge extent too many times ? Answer lies within, and we have seen it. It has been China's policy to expand their land and hold over the territory. What is happening in South China sea ? The same thing, what more could one expect from China after they did not accept the decision of Permanent Court of Arbitration on the issue of South China Sea declaring the activities of China in the region as not valid. So, this is not just a fact but a cruel reality for Pakistan, that China's interests are the reason for their friendship.  



Pakistan's interests

The CPEC can be very beneficial to Pakistan.  At a time when terrorism has severely affected Pakistan’s prospects of foreign investment, the $ 46 bn promised by China is three times the total FDI it has got in the last decade. Can you imagine ? The project is estimated to directly create some 700,000 jobs up to 2030, and speed up GDP growth significantly. Investors will be backed by Beijing and Chinese banks, and Pakistan will not pick up any more debt in the process. Pakistan expects to add 16,000 MW by 2021, and reduce power shortage by 4,000-7,000 MW. The shortage of power has been a huge issue in Pakistan, including in elections, and has sparked violent protests. The CPEC deal also includes $ 5.9 bn for road projects and $ 3.7 bn for railway projects, all to be developed by 2017. A $ 44 million optical fibre cable between China and Pakistan will be built too. Besides the potential for growth, power and jobs, Pakistan also expects the CPEC to bind it in an even tighter embrace with close friend China, giving it greater strategic leverage with both India and the United States in the Indian Ocean region.

Problems to CPEC

There are some problems with the CPEC, Voices in Balochistan, where Gwadar is, have been demanding that Chinese investors spell out exactly how they would be benefited. Both Balochistan and Khyber Pakhtunkhwa have complained that power projects that ought to be theirs have gone to Punjab. The western arm of the CPEC, important for the development of Balochistan and KP, remains uncertain. And yet, cooperation among the provinces — traditionally not one of Pakistan’s strong points, is key to the success of the CPEC.

Security remains a major threat in the area Balochistan. An attack on a CPEC project will be a setback, and Pakistan has deployed 15,000 special security forces for Chinese nationals and companies along the corridor.

How has India reacted ?

As mentioned earlier also, China has covered India from it's top, which is not good for India because these corridors can be used for military movements in the time of urgency. Though India has raised concerns with China on CPEC going through POK, there has been no action from the other side else than diplomatic replies. India in reply have strengthened the concerned areas with special security and army deployment. Also, construction of CPEC can create a big challange for Indian economy to maintain their presence in the Ocean and of-course world trade. Since CPEC will give an economic  boost to both China and Pakistan, India has to come up with new plans to strengthen their economy and this is why, there has been a shift towards USA in Indian politics over the years.

But on the other hand, if with this step comes economic stability in Pakistan, India will be breathing fine because then terror activities will slow down in the valley of Kashmir.

PM Narendra Modi, PM Nawaz Sharif, President Xi Jinping
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By, and large, CPEC can be considered as China's masterstroke and Pakistan's game-changer. CPEC will be one of the main reasons for China's success and increasing influence in Asian continent.

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