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Antara Ghosal Singh, “Reading the Tea Leaves: China’s Perspective on Ties with Pakistan and the CPEC's Prospects,” ORF Issue Brief No. 658, September 2023, Observer Research Foundation.
Introduction
In recent months, Pakistan has been grappling with what some analysts have referred to as a “polycrisis”[1]—an “existential” economic crisis,[2] an intense political conflict between the government and opposition leader Imran Khan,[3] and a drastically deteriorating security situation.[4] Pakistan has sought assistance from “friendly countries”[5] and the International Monetary Fund (IMF) to stabilise its economy and strengthen its ability to pull through the ongoing crisis. While Pakistan did secure an initial approval from the IMF for a US$3 billion loan programme on 30 June 2023, mere hours before the IMF agreement expired,[6] overall, this time, international assistance for the country has been somewhat less forthcoming.[7] Most notable was China’s ambivalence to a faltering Pakistan, despite being the country’s largest creditor,[a] and having the ability to restructure its debt and reverse its economic free fall.[b],[8] Despite the rhetoric of an ‘iron-clad, all-weather friendship’ between Beijing and Islamabad, of Pakistan being the fulcrum of China’s South Asia policy,[9] and of the US$60 billion China-Pakistan Economic Corridor (CPEC) being the cornerstone of the Belt and Road Initiative (BRI), China chose a ‘wait and watch’ policy on the Pakistan situation, often even suggesting the US is to blame for Pakistan’s current plight.[10],[11] At one point, even Pakistan’s strategic circles[12]—which are rarely critical of China—began to question why Beijing was not doing more to help Islamabad. Significantly, China’s current reticence comes on the back of reported cuts to the CPEC budget (by a substantial 56 percent) in 2022.[13]
Amid this backdrop, this brief examines Chinese resources—the discourse in the Chinese-language media, discussions on the Chinese internet, and writings by Chinese academics and scholars—to understand the current dynamics of China-Pakistan relations.
Background: China-Pakistan Ties
China and Pakistan established diplomatic relations in May 1951,[14] but the relationship gained real traction only after the 1962 India-China border war,[15] eventually turning Islamabad into Beijing’s closest ally in South Asia. In recent years, the relationship has been cemented through the CPEC. In May 2013, Chinese Premier Li Keqiang formally proposed the “historic long-term plan of the CPEC” during a visit to Pakistan.[16] In April 2015, the two sides agreed to upgrade bilateral ties to an all-weather strategic cooperative partnership, and determined a ‘1+4 cooperation layout’[c] to construct the CPEC, focusing on the Gwadar Port, energy, transportation infrastructure, and industrial cooperation. Since then, the CPEC has emerged as the core of China’s relations with Pakistan.
The 3000-km CPEC starts in Kashgar in China’s Xinjiang province and ends in Gwadar Port, Pakistan.[17] As per Chinese planning, it is connected to China’s Silk Road Economic Belt in the north and the 21st Century Maritime Silk Road in the south.[18]
Chinese literature indicates that China sees immense strategic value in the CPEC, particularly to:
On the other hand, China has marketed the CPEC to Pakistan as:
In the first phase of construction (2015-2020),[23] about 22 early harvest projects were identified or completed at a total investment of at least US$19 billion (see Table 1).[24] Among these were 11 energy projects (including the coal-fired Sahiwal and Port Qasim power stations that began operations in July 2017 and April 2018, respectively); four major transportation projects [including the PKM highway (Sukkur-Multan section), and the Karakoram Highway (Havellian-Mansehra) projects]; one port project (Gwadar Port); five livelihood projects (including a school, medical centre, and a desalination plant at Gwadar); and one feasibility study project for funds.
Table 1: Projects started or completed in the first phase of CPEC
| Project Name | Funding Source | Cost (US$100 million) | Category | Progress (till 2020) |
| Gwadar Smart City Planning | Funded by China | Total Amount 0.29 | Livelihood Projects | Handed over on 5 November 2019 |
| Gwadar China-Pakistan Friendship Primary School | Funded by China | Livelihood Projects | Completed in 2016 | |
| Gwadar Emergency Centre | Funded by China | Livelihood Projects | Completed on 7 May 2017 | |
| Pilot Project of Digital Terrestrial Multimedia Broadcast (DTMB) | Funded by China | Livelihood Projects | Under construction | |
| Gwadar East Bay Expressway | Interest free loan | 1.43 | Livelihood Project | Under construction |
| 50 WM Dawood Wind Power Project | Chinese-funded and joint venture enterprises | 1.15 | Energy Project | Grid connected on 4 April 2017 |
| 100MW UEP Wind Farm, Jhimpir, Phase 1 | Chinese-funded and joint venture enterprises | 2.52 | Energy Project | Grid connected on 15 June 2017 |
| 50MW Sachal Wind Power Project | Chinese-funded and joint venture enterprises | 1.34 | Energy Project | |
| 300 MW ZTE Solar Power Project in Punjab | Chinese-funded and joint venture enterprises | 4.6 | Energy Project | Grid connected in June 2016 |
| 1320 MW Qasim Port Coal-fired power plant project | Chinese-funded and joint venture enterprises | 20.85 | Energy Project | Commercial operations began in April 2018 |
| 1320 MW Sahiwal coal-fired power plant project | Chinese-funded and joint venture enterprises | 18 | Energy Project | Completed and put into production on 3 July 2017 |
| 720 MW Karot Hydropower Project | Chinese-funded and joint venture enterprises | 16.98 | Energy Project | Under construction |
| 660 MW Hub coal-fired power station project | Chinese-funded and joint venture enterprises | 19.95 | Energy Project | Completed on 21 June 2018 |
| 100 MW Three Gorges Wind Power Project Phase ii and Phase III | Chinese-funded and joint venture enterprises | 2.24 | Energy Project | Normal operations began in 2018 |
| Suki Kenari Hydropower Station Project | Chinese-funded and joint venture enterprises | 18.02 | Energy Project | Under construction |
| A pit-mouth coal-fired power plant in the Thar Coal Mining Block II project | Chinese-funded and joint venture enterprises | 20 | Energy Project | Completed on 21 October 2019 |
| Karakoram Highway Phase II Upgrading and Reconstruction, (Havellian to Thakot Section), | Chinese government preferential loans | 13.15 | Transport Infrastructure | Completed on 18 November 18 2019 |
| Sukkur-Multan section of the Karachi-Lahore Expressway (392 km) | Chinese government preferential loans | 28.89 | Transport Infrastructure | Completed on 5 November 2019 |
| Lahore Orange Line rail transit project | Chinese government preferential loans above | 16.26 | Transport Infrastructure | Completed on 10 December 2019 |
| China-Pakistan cross-border optical cable project | Chinese government preferential loans | 0.44 | Transport Infrastructure | Opened on 13 July 2018 |
| Gwadar Port Operation and Free Trade zone Construction Project | Chinese enterprises | 2.35 | Industrial Park | Park opened on 29 January 2018 |
| Feasibility Study on upgrading and transformation of Main Line 1 project (ML1) | Pakistan government funding | 0.03 | Transport Infrastructure | Submitted in April 2019 |
Source: Lu Jia[25]
In the second phase of construction (2021-2025),[26] the CPEC focuses on agriculture, poverty alleviation, education, health, and human resources, in addition to continuing with energy and infrastructure cooperation projects, particularly in the western Pakistan’s underdeveloped areas. Nine special economic zones are expected to be established, which are in Khyber Pakhtunkhwa, Sindh, Balochistan, Punjab, Islamabad, Port Qasim, Pakistan-occupied Kashmir, Federally Administered Tribal Areas, and Gilgit-Baltistan (see Table 2).[27]
Figure 2: Special economic zones proposed in the second phase of CPEC
| Project Name | Place | Area (in acres) | Industry Type |
| Rashakai Economic Zone, M-1, Nowshera | Khyber Pakhtunkhwa | 1000 | Fruit, food, packaging, textile, knitting |
| China Special Economic Zone Dhabeji | Sindh | 1000 | Determining feasibility |
| Bostan Industrial Zone | Balochistan | 1000 | Fruit processing, agriculture machinery, Pharmaceuticals, motorcycle assembly, chromite, edible oil, ceramic industry, cold storage, electrical appliances, halal food industry |
| Allama Iqbal Industrial City (M3), Faisalabad | Punjab (Faisalabad) | 3000 | Textiles, steel, pharmaceuticals, engineering, chemicals, food processing, plastics, agricultural implements. |
| ICT Model Industrial Zone, Islamabad | Federal Government (Islamabad) | 200~500 | Steel, engineering, pharmaceutical, chemical, printing, processing. |
| Development of an Industrial Park on Pakistan Steel Mills Land at Port Qasim near Karachi | Federal Government (Port Qasim near Karachi) | 1500 | Steel, automobiles and related, manufacturing, chemical, printing, packaging, clothing |
| Special Economic Zone at Mirpur, Pakistan-occupied Kashmir | Pakistan-Occupied Kashmir (Mirpur) | 1078 | Mixed industries |
| Mohamad Marble City | Federally Administered Tribal Areas | Information not available | Information not available |
| Mokpondass SEZ Gilgit-Baltistan | Gilgit-Baltistan | Information not available | Marble, granite, iron ore processing, fruit processing, iron and steel industry, mineral processing equipment, leather industry. |
Source: Lu Jia[28]
Although the Chinese state media often projects the CPEC as a flagship project of the BRI, with great strategic significance for China and Pakistan,[29] several Chinese analysts have (in internal assessments) repeatedly flagged a myriad of risks and challenges involved in construction of the corridor.[30] These include Pakistan’s domestic political constraints, low project implementation efficiency, high public expectations, serious security concerns along the route, and interference from external forces. With the CPEC construction now in the second phase, which China calls the “enrichment and expansion” stage,[31] Chinese scholars have pointed out the emergence of new challenges, particularly in the post-pandemic era. They argue that with the evolution of the international and regional situation, the old and new challenges coexist, posing a big test for China in dealing with them appropriately.[32]
Assessing the Challenges to CPEC
The current dominant discourse in China is that the world is undergoing “major changes unseen in a century”[33] due to the impact of the COVID-19 pandemic and intensifying great power competition, and Beijing is at the centre of these major changes. Pakistan, which has traditionally been a close ally and partner of China, is also experiencing significant changes.[34] Indeed, the strategic environment in which CPEC was introduced a decade ago has changed drastically, impacting the second phase of construction.[35] As per the Chinese assessment, some of the most serious problems and challenges plaguing the CPEC in the current phase are:
China is of the view that Pakistan’s global strategic position has undergone much change in recent years (at the global, regional, and extended neighbourhood levels) due to three key factors, and this has had a serious impact on the construction of the CPEC.[36] These factors are the intensified Sino-US competition, adjustments in the Pakistan-India dynamic, and drastic changes in Pakistan’s extended neighbourhood (in West Asia).
Global level: Pakistan has long been a frontline US ally, received substantial military and economic aid, and maintained a flexible strategic space between the US and China.[37] During the Cold War, Islamabad played an important role as a bridge in the process of normalising Sino-US relations, and played a major role in transforming the geopolitical pattern of that era.[38] Further, during the post-September 2001 ‘war on terror’ era, China and the US agreed on maintaining security and stability in Pakistan and South Asia, which benefitted Pakistan immensely.[39] However, after the US launched its withdrawal from Afghanistan in 2014, Chinese strategists believe there was a decline in Pakistan’s position in the US strategic calculus, from being a global strategic partner to a mere stakeholder in a regional hotspot issue (Afghanistan issue).[40] Since the Trump presidency (2017-2021), China believes that the US has focused on the strategic competition between Washington and Beijing, putting Islamabad in a tight spot.[41]
As the China-US competition has intensified under the Biden administration, Chinese strategists note Pakistan’s shrinking strategic space for manoeuvre between the two sides. As the flagship project of China’s BRI, the CPEC has been placed at the centre of the great power competition, bearing the brunt of the US policies meant to counter the Chinese initiative and promote the American Indo-Pacific strategy.[42]
According to the Chinese assessment, the US appears to have two strategic demands of Pakistan.[43] First, the US hopes that Pakistan will continue cooperating with it on the Afghanistan issue. This is despite the Afghan issue declining as a policy priority as the US focuses more on its competition with China.[44] Second, the US hopes that Pakistan will support its Indo-Pacific strategy to counter China’s rise. But for Pakistan, antagonising China will contradict the basic tenets of its foreign strategy[45]—to join forces with China to counter India in South Asia. This has therefore reduced Islamabad’s role in Washington’s strategic approach, and may have even turned it into a “negative asset” for the US in some respects.[46] According to Zhang Jiadong, a Chinese expert on South Asia, friendly ties with China and the US have been Pakistan’s biggest diplomatic advantage over the years, but are now a clear disadvantage as the country is increasingly being pushed to “choose sides”.[47]
Regional level: Chinese scholars believe that the dynamics of the Pakistan-India relationship have changed significantly. On the one hand, amid the increasingly fierce competition between China and the US and simultaneous strengthening of US-India relations, China-India relations have experienced major disturbances (such as the the Doklam standoff in 2017 and the Galwan Valley face-off in 2020). On the other, within the subcontinent, Pakistan’s foreign strategy—with the primary goal of confronting India in the subcontinent—is becoming increasingly “unsustainable”.[48]
India has maintained a relatively high growth rate, and the world is generally optimistic about its prospects. At the same time, Pakistan’s economic development has fluctuated greatly, tackling crisis after crisis. Given the widening gap in national and military strength with India, some Chinese scholars feel Islamabad’s policy of maintaining confrontation vis-à-vis New Delhi is automatically losing traction.[49] For the most part, Pakistan has been able to skilfully leverage the international situation to make up for any power gaps with India and pursue its policy of confrontation. For instance, during the Cold War, there was a tacit agreement between China and the US to support Pakistan to counter India’s rise.[50] However, a changing international situation has impacted Pakistan’s ability to continue with its old strategic calculations.
As the US’s global strategy has shifted from the war on terror to major power competition in recent years, it has increasingly valued India’s strategic role in balancing China.[51] Indeed, India is a key partner in the Quadrilateral Security Dialoguer[52] and the US’s Indo-Pacific strategy document indicates “support for India’s continued rise and its regional leadership” and recognises “India as a leader in South Asia and the Indian Ocean,” without mentioning any other South Asian countries.[53] This, in the Chinese assessment, is a message from the US to Pakistan to recognise India’s dominant position and abandon its policy of confrontation.[54] Under this new situation, Chinese strategists feel that the vulnerability of CPEC has increased substantially.[55]
Extended neighbourhood level: Rapid changes in the West Asia region, which Pakistan considers its extended neighbourhood, also appear to have a bearing on the construction of the CPEC. Saudi Arabia and the United Arab Emirates (UAE) have been Pakistan’s established allies in the region and have provided support repeatedly on the energy[56] and finance fronts.[57] In turn, the Pakistani military has played a crucial role in ensuring the security of countries like Saudi Arabia [58].
However, in recent years, countries like Türkiye and Iran have strengthened, while traditional powers such as Saudi Arabia, the UAE, and Israel have experienced a relative decline. This has led to a reorganisation of the regional power structure, which has muddled Pakistan’s existing strategic calculus in the region.[59] Consider, for instance, Pakistan’s response to the Yemen conflict.[60] To Saudi Arabia’s displeasure, Pakistan snubbed its request in 2015 to join its military coalition against the Houthi rebels, supposedly backed by Iran, thereby declaring neutrality. However, in 2018, Pakistan eventually deployed over 1,000 soldiers to Saudi Arabia (under pressure from the Kingdom, but ties had already deteriorated), risking its relations with neighbouring Iran.
Chinese scholars feel that Pakistan is increasingly finding itself in a tight corner amid the geopolitical evolutions in West Asia, particularly the deepening conflicts between Iran and the Arab countries. While Pakistan’s traditional security relations with its Gulf allies are fraying, cooperation with Iran can also not take off even in areas where major common interests converge, such as regional counterterrorism and Afghanistan. This, the Chinese side believes, is adversely affecting the implementation and expansion of the CPEC.[61] Notably, the Chinese mediation between Saudi and Iran in recent months and hosting the first meeting of the China-Pakistan-Iran trilateral on counterterrorism and security (in June 2023)[62] should be seen in the context of the predicaments facing the CPEC in addition to the discourse of “China’s growing influence in the Gulf”[63] or China’s rise as an “international deal-maker”.[64]
The Türkiye-Saudi leadership competition is further adding to Pakistan’s dilemma. Türkiye values Pakistan’s strategic importance as the Islamic world’s only de facto nuclear state. Although Pakistan intends to take advantage of a rising Türkiye, it remains dependent on Saudi and Emirati support in terms of energy and finance, and thus cannot prioritise one over the other.[65] Pakistan’s response to the ‘Kuala Lumpur Summit’ in December 2019 highlights this dilemma. Malaysia reportedly[66] organised the summit to deliberate upon issues like “Islamophobia and poverty within the Muslim world”. Globally, the initiative was seen as the beginning of a rival regional organisation, competing with the Saudi-led Organization of Islamic Cooperation (OIC). Although Malaysia officially denied this, it invited (on a symbolic note) Iran, Türkiye, Qatar, and Pakistan as participants, while excluding Saudi Arabia and other members of the OIC and the Gulf Cooperation Council. Pakistan initially supported the initiative and announced its participation, but later withdrew under Saudi pressure.[67]
Chinese scholars also feel India’s participation in West Asia geopolitics is curbing Pakistan’s influence in the region. Saudi Arabia and the UAE have begun to value India’s status as a major energy buyer and emerging power, and are actively adjusting ties with the country.[68] India appears to be using this to its advantage and to drive a wedge between Pakistan and its traditional regional allies.[69] Chinese scholars also view India’s presence in West Asia as converging with US interests. Indeed, the US, India, Israel, and UAE have formed a new grouping called I2U2, which China believes is a West Asia version of the Quadrilateral Security Dialogue.[70] India, the US, Saudi Arabia, and the UAE are reportedly discussing the joint development of railway infrastructure connecting the West Asia region to India,[71] which China has said is a “deliberate attempt to contain China’s BRI”.[72]
Pakistan’s worsening domestic woes
China feels that Pakistan’s domestic situation has deteriorated further in the post-pandemic era, resulting in greater challenges to the CPEC.
Instability in Pakistan, stemming from political infighting and sectarianism, is a major roadblock for the CPEC. The continuous jostling between the Pakistani military and the political parties has further complicated matters, giving rise to self-interest groups and regionalism, thereby slowing down the progress of the CPEC.[73] Chinese experts believe that the provincial and central governments are not on the same page regarding the CPEC, specifically the route of the corridor construction.[74] The dispute is about a conflict of interest among the provinces, including Punjab, Balochistan, and Khyber Pakhtunkhwa. The eastern route passes through cities with a higher population density, better terrain, better facilities, and better security, such as Lahore and Islamabad, and is preferred by investors.[75] However, the plan to prioritise the development of the eastern front met with strong opposition from Pakistan’s western provinces, who believe prioritising the east will exacerbate unbalanced development and regional conflicts. In particular, there have been concerns that Balochistan’s resources will be plundered for Punjab’s benefit.[76] Subsequently, the central government decided to prioritise the eastern and western provinces equally, making the CPEC construction more difficult, costlier, and riskier for China. The project has also faced strong opposition from locals and ethnic minorities who fear an influx of workers from China and the other provinces.[77]
As per the Chinese assessment, a direct fall-out of this internal discord over CPEC in Pakistan is the rising security threat to the corridor and Chinese citizens associated with the project in recent years. China sees the Baloch Liberation Army as the key threat to its presence in Pakistan. At the same time, terrorist organisations such as the al Qaeda and ISIS have also attacked the corridor projects.[f],[78]
The Chinese side is also aware of Pakistan’s highly unstable economic situation and believes that, given its current economic woes, Pakistan cannot support the corridor’s construction.[79] There is also some anxiousness that Pakistan’s high debts and weak repayment ability will pose major risks for Chinese investments. For instance, overdue electricity bills for the existing Chinese power projects in Pakistan have raised alarm among China’s public sector banks[80] and caused much displeasure among the Chinese strategic community.[81] To mitigate the risks involved in investing in Pakistan, the Chinese side is keen to change the bilateral nature of the project and promote cooperation in the energy field under CPEC with Turkmenistan, Afghanistan, India, Iran, and other countries.[82]
Further, many in China also believe that although Pakistan has a large population, education levels and work efficiency are generally lower than in China, resulting in increased management difficulties and costs for Chinese firms operating in Pakistan. Additionally, Pakistan’s lack of economic openness, financial regulations, and high tariffs are major obstacles to greater international investments. In the Chinese assessment, these factors are adversely affecting the realisation of the corridor’s role as a catalyst for trade, investment, and industrial cooperation between China and Pakistan, and is raising concerns within Chinese strategic circles over the CPEC’s return on investment.[83]
Pakistan’s Response to its Challenges
Faced with an increasingly adverse strategic situation, Pakistan, some Chinese strategists note, has attempted to make certain policy adjustments. In March 2021, for instance, it held the first edition of the Islamabad Security Dialogue[g] and launched the Comprehensive National Security Framework,[84] based on which it has compiled the National Security Policy 2022-2026. The policy places economic and human security at the core of Pakistan’s national security.[85]
Pakistan is also striving to go beyond the distinction between the military and government, and has proposed a ‘whole-of-government approach’ to safeguard national security.[86] It is also seeking to make certain foreign policy adjustments:[87] resetting its relationship with the US; carrying out behind-the-scenes diplomacy for a working relationship with India, due to which the border ceasefire came into effect in February 2021;[88] considering a more balanced diplomatic position between Saudi Arabia, Türkiye, and Iran in West Asia, and strengthening trade, economic, and military ties with Russia and Central Asia.[89]
However, the Chinese strategic community believes that although Pakistan’s foreign policy adjustments are positive developments, their impact will be limited.[90] This is because Pakistan is yet to find a favourable strategic position in the current international situation. It no longer has the weight to influence relations between major or regional powers, and its diplomatic sway is no longer pivotal in geopolitics.[91] At the same time, Chinese scholars note that Pakistan has certain important features that should not be underestimated or written off entirely—that it is a regional military power, a country with a big population, and the only de facto nuclear country in the Islamic world.[92]
China’s Apparent Message to Pakistan
In a rapidly changing geopolitical context, China’s message to Pakistan, as evident from the writings of the Chinese scholars, is two-fold:
Many Chinese scholars feel that Pakistan expects too much from China[94] and, to a certain extent, abhors Pakistan’s China dependence. Chinese commentators often criticise how the Pakistani side regards the CPEC as a panacea for all its problems and expects the Chinese government to invest substantial amounts of money to keep the country afloat despite its adverse national conditions and inability to attract investment.[95] Since the Cold War period, Pakistan has received economic support from superpowers, given its unique geostrategic position. The period of high-speed economic growth in Pakistan was also one of friendly relations with superpowers and the inflow of substantial foreign aid.[h] As a result, Pakistan, they say, has developed a dependence on international development assistance, and domestic political elites have prioritised their vested interests, curbing any political will for economic transformation and development.[96] China’s message to a “needy” Pakistan is clear—the CPEC is not a “big gift package,” but an economic cooperation project that needs Pakistan’s equal participation and contribution.[i],[97]
Chinese public opinion appears to be strongly against China rescuing Pakistan by pouring its money into “a bottomless pit” in a “poorly managed” country. Some commentators have even questioned why Pakistan continues to struggle despite receiving Chinese assistance for decades.[98] There were also some discussions across the Chinese internet if Pakistan will ‘disintegrate’ into four parts: one controlled by the Bhutto family (south), one by the Sharif family (central and east), another by former Prime Minister Imran Khan (the northwest), and the rest of the territory controlled by the Pakistani military.[99] Such has been the ‘Pakistan pessimism’ within the Chinese strategic community that, despite news reports[100] of Pakistan seeking to “pivot towards China,” or “go all-in with the Chinese”,[101] Chinese scholars are advocating against such a move and cautioning Pakistan not to hastily choose sides in the great power competition to protect its national interest.[102]
The CPEC’s strategic role is that of an external supporter, and it does not have an internal and fundamental role in Pakistan’s development. The construction of the corridor, Chinese scholars argue, can provide favourable conditions and external support for Pakistan to promote economic and industrial development, but it cannot directly and fundamentally change the internal and external strategic dilemmas faced by the country, guarantee an improvement in development levels, or enhance its strategic position in current geopolitics.[103] Therefore, if Pakistan wants to improve its power and position at the global level, China says it must rely more on deep internal reforms[104] and less on Beijing. Indeed, as one commentator notes, China can only help but cannot save Pakistan.[105]
The analysis of Chinese language literature highlights China’s dilemma over Pakistan. On the one hand, given its long-standing alliance relationship with Pakistan, the Chinese government has bet big on the South Asian nation in the form of CPEC, its dream project to build a China-centred security architecture and economic circle by integrating and cultivating the Asia-Pacific, South Asia, West Asia, Eastern Europe, Russia, and African markets. It hopes that the corridor will attract major investing countries like Saudi Arabia, the US, Germany, Japan, South Korea, and Singapore,[106] and enable China’s private enterprises to go global, accumulate capital, explore new markets, and contribute to its industrial upgrading process.[107] Further, it has positioned the CPEC as the demonstration programme for the overall BRI plans, implying that the successful implementation of the corridor is a precondition for the successful advancement of the BRI. As such, the Chinese government remains desperate for the CPEC to succeed.
On the other hand, despite the hype over the China-Pakistan relationship and the CPEC in Chinese government circles, the local strategic community remains deeply sceptical about the prospect of the initiative. A survey of Chinese resources on CPEC highlights the strong emphasis on various challenges,[108] risks,[109] constraints,[110] and uncertainties[111] involved in constructing the corridor, as compared to its potential returns, economic or otherwise. Given the lack of confidence, Chinese private investors have mostly shied away from the initiative, making it a near-exclusive domain of China’s cash-rich state-owned enterprises.[112] Chinese observers feel the prospects for the CPEC have further deteriorated in recent years. Pakistan’s remedy—to redefine its national security paradigm and give equal weightage to security and economy—is seen as too late, too little.
Amid Pakistan’s decreasing ability to counter India,[113] the Gwadar Port and CPEC failing to make much economic headway, and Pakistan still unwilling to let Chinese security forces take charge of Chinese assets in the country, public opinion in China is that it should avoid further raising its stake in Pakistan. No amount of economic assistance, commentators say,[114] can resolve Pakistan’s internal and external dilemmas, and unless domestic security and stability are restored, no country is likely to invest in Pakistan, making it even more difficult for the economy to recover. Therefore, China needs to step back, as only Pakistan can help itself at this moment.
Additionally, in July 2023, an Indian parliamentary panel[115] urged pushing for better ties with Pakistan by offering assistance to the crisis-hit country[116] and opening up trade channels,[117] because it will help India wean[118] a weaker Pakistan away from China.[119] Better India-Pakistan relations, it is argued, will be useful in effectively handling China.[120] Such views are also seconded by a section of international South Asia experts who seem to have bought into the discourse emanating from Islamabad that the US is losing its strategic, nuclear-armed ally (Pakistan) to China[121] due to its growing closeness to India[122] and that it can still win back Pakistan and prevent Beijing from gaining further leverage over Islamabad if it (Washington) uses its influence over New Delhi to bring it back to the negotiating table.[123]
But the Chinese discourse on Pakistan, as discussed in this brief, somewhat debunks such assertions. A weak Pakistan, domestically unstable and internationally isolated (tense ties with neighbours, sidelined in the Islamic world, alienated from the US, and overdependent on China[124]), has little appeal to Beijing and worsens China’s Pakistan dilemma and jeopardises bilateral cooperation.
Chinese scholars are clear that to enable the CPEC construction to proceed smoothly, Pakistan to keep open lines of communication with India and the US in South Asia to creatively engage them[j] to dilute their opposition to and weaken their countermeasures against the CPEC.[125] It must also address the concerns and positively influence the attitudes of other neighbouring countries, such as Afghanistan, Iran, and the UAE,[k] towards the CPEC. An internally stable Pakistan that has economic access to Indian markets despite political differences, actively engages with the Islamic world, and still receives US assistance (to whatever limited extent) is in China’s best interest and is likely to fuel greater China-Pakistan convergence and collaboration under the CPEC banner. As India contemplates resuming a dialogue with Pakistan, it must consider the Chinese discourse on Pakistan, particularly to avoid walking into a potential China-Pakistan trap.
[a] China and Chinese commercial banks reportedly hold around 30 percent of Pakistan’s total external debt of about US$100 billion. Much of this debt is a direct impact of the China-Pakistan Economic Corridor. For more, see: https://www.reuters.com/world/asia-pacific/us-concerned-about-debt-pakistan-owes-china-official-says-2023-02-16/
[b] China did roll over around US$5 billion in loans to Pakistan in the last few months as IMF negotiations dragged on, but this was primarily aimed at preventing Pakistan from defaulting, which would have forced China to offer debt relief under IMF conditionalities; see: https://www.arabnews.com/node/2339791/amp. For more on the Chinese lending approach, see: https://www.politico.com/news/2023/04/11/china-lending-imf-world-bank-00090588
[c] The 1+4 cooperation layout puts the CPEC at the centre, with the Gwadar Port, transport infrastructure, energy, and industrial cooperation as the four key areas of cooperation. For more, see: https://www.pakistantoday.com.pk/2023/07/09/14-layout-formed-cpecs-projects-attract-25-4b-of-fdi-during-past-10-years/
[d] China’s ‘Malacca dilemma’ is its worry over the possibility of a foreign navy, such as that of the US or India, disrupting China’s energy lifeline during wartime with a blockade of the Strait of Malacca. For more, see https://www.wilsoncenter.org/blog-post/internal-politics-instability-and-chinas-frustrated-efforts-escape-malacca-dilemma
[e] The Chinese government’s plan to invest in development and growth in the inland western regions, thereby addressing domestic regional inequality. For more, see https://borgenproject.org/tag/the-great-western-development-strategy/
[f] According to the Pakistan Peace Institute’s Pakistan 2018 Security Report (released in June 2019), there were nearly 40 terror attacks on the CPEC projects in 2018.
[g] According to the event report, the dialogue is envisaged to “position Pakistan as a leading voice in thought leadership on national security issues.” Its aim is to unveil “Pakistan’s comprehensive national security framework”, access “Pakistan’s role and potential as an economic melting pot for positive global economic interests”, and launch “the first-of-its-kind National Security Division Advisory Portal”. It was attended by members of Pakistan’s federal cabinet, diplomatic corps, former government officials global and local thinkers, policy experts, and scholars. For more, see https://mofa.gov.pk/wp-content/uploads/2021/05/Islamabad-Security-Dialogue-Event-Report.pdf
[h] For instance, scholars note that by 1964, overall aid and assistance amounted to about 5 percent of Pakistan’s GDP and acted as a catalyst for its industrialisation and development, with GDP growth rates rising to as much as 7 percent per annum. For more, see: https://carnegieendowment.org/files/pakistan_aid2011.pdf
[i] The sudden rush in Pakistan to attract foreign investment by setting up forums like the Special Investment Facilitation Council or project the country as a destination where key investors (like China, Saudi Arabia, and the UAE) continue to maintain faith and confidence should be seen in the context of the message emanating from Beijing. For more, see: https://www.reuters.com/business/energy/pakistan-china-sign-48-bln-nuclear-power-plant-deal-2023-06-20/, https://www.al-monitor.com/originals/2023/08/uae-saudi-arabia-race-investment-pakistan
[j] Preferably by aligning existing or proposed cooperation mechanisms such as the Turkmenistan-Afghanistan-Pakistan-India regional energy cooperation project, the Iran-Pakistan-India natural gas transmission project, and the US ‘New Silk Road’ plan with CPEC. Another way is to encourage the American private sector to invest and build factories in the Pakistani industrial parks under the CPEC.
[k] While Pakistan’s overall relation with the Taliban regime in Afghanistan has been in a downward spiral, Iran and UAE continue to see Gwadar as a competition to Bandar Abbas and Dubai Ports and have complex attitudes towards the CPEC.
Endnotes:
[1] Maleeha Lodhi, “Year of polycrisis”, The Dawn, January 2, 2023.; S Akbar Zaidi, “A polycrisis that is depleting Pakistan’s resilience”, The Hindu, February 8, 2023.
[2] Shahbaz Rana, “Pakistan’s Existential Economic Crisis”, USIP, April 6, 2023.
[3] “Timeline: Imran Khan, from ouster to arrest in Pakistan” Al Jazeera, May 9, 2023.
[4] “Over the borderline: on Pakistan and its security situation with Afghanistan”, August 1, 2023, The Hindu.
[5] “Pakistan looking towards friendly countries for funding following delay in revival of IMF bailout program”, ANI, May 17, 2023.
[6] “Pakistan Wins Initial Nod for $3 Billion IMF Bailout Deal”, Bloomberg, June 30, 2023.
[7] “PM Shehbaz Sharif says, “even friendly countries started looking at Pakistan as beggars”” , The Times of India, September 15, 2022, Umer Karim, “Why Saudi Arabia has left Pakistan out in the cold”, Middle East Eye, April 23, 2023.
[8] “巴基斯坦深陷债务危机,及其对中国的影响, (Pakistan’s Deep Debt Crisis, and Its Implications for China)”, February 22, 2023,
[9] Lin Minwang, “南亚的地缘政治博弈及其战略格局的演进”( South Asia’s geopolitical game and the evolution of its strategic pattern) , Baijiahao, May 6, 2020.
[10] “巴基斯坦面临“破产”？中国这次没有出面，西方提出援助方案 (Pakistan facing “bankruptcy”? China did not come forward this time, the West proposed an aid plan)”, 海峡快报, February 9, 2023.
[11] “China shouldn’t be excuse for West to shirk blame over debt”, Global Times, February 6, 2023.
[12] Pervez Hoodbhoy, “As Pakistan Gallops Towards Debt Default, Its ‘Unbreakable’ Bond With China Is Under Stress”, Feb 22, 2023, The Wire.
[13] “CPEC in trouble with China, Pak’s disengagement amid economic crisis”, The Tribune, August 4, 2022.
[14] Zamir Ahmed Awan, “A new era of Pakistan-China relations”, China Daily, May 21, 2018.
[15] Manjari Chatterjee Miller, “How China, Pakistan forged close ties”, The Hindustan Times, October 2, 2022.
[16] Xu Zhijie, Zhang Puling, Wang Fei, “”一带一路”倡议下中巴经济走廊建设的缘起,挑战与路径 (The Origin, Challenges and Paths of the Construction of the China-Pakistan Economic Corridor under the “Belt and Road” Initiative), Journal of Kashi University 2021,42(04),23-28
[17] Lu Jia, “全球新冠疫情下中巴经济走廊建设进入新阶段的研, (Research on the construction of the China-Pakistan Economic Corridor entering a new stage under the Covid pandemic), Contemporary Economy 2020, (09), 12-1
[18] Lu Jia, “全球新冠疫情下中巴经济走廊建设进入新阶段的研, (Research on the construction of the China-Pakistan Economic Corridor entering a new stage under the Covid pandemic)
[19] Wang Qianrun, “以产业振兴推动中巴经济走廊区域经济高质量发展的路径探索(Exploration on the path of promoting the high-quality development of the regional economy of the China-Pakistan Economic Corridor through industrial revitalization) ”, Northern Economy 2021, (01), 28-31
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[63] Ahmed Aboudouh, “China’s mediation between Saudi and Iran is no cause for panic in Washington”, The Atlantic Council, March 21, 2023.
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[66] Seher Khan, “The Downward Spiral In Pakistan-Saudi Arabia Ties”, The Stimson Centre,September 28, 2020.
[67] Seher Khan, “The Downward Spiral In Pakistan-Saudi Arabia Ties”
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[71] “How India’s Massive Plans In Middle-East Counter China’s Influence”, NDTV, May 13, 2023.
[72] “US railway plan a mere copycat, hard to win favor from Middle East”, May 8, 2023, Global Times.
[73] Wang Xu, Lin Yiming, “大变局中的中巴经济走廊建设(Construction of the China-Pakistan Economic Corridor amidst major changes)”, South Asian Studies 2022, (02)
[74] Lu Jia, “全球新冠疫情下中巴经济走廊建设进入新阶段的研, (Research on the construction of the China-Pakistan Economic Corridor entering a new stage under the Covid pandemic), Contemporary Economy 2020, (09), 12-18
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[80] “Unpaid power bills obstruct Chinese funding of Pakistan’s power projects,” ANI, November 22, 2022.
[81] Yan Shaojun, “Research on High-quality Development of China-Pakistan Economic Corridor”, Globalization 2021, (03), 110-120+136
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[84] “Islamabad Security Dialogue”, March 17, 18, 2021.
[85] Li Qingyan, “巴基斯坦发布首个国家安全政策有何意味(What Pakistan’s first national security policy means)”, Guancha.com, February 2, 2022.
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[88] Lin Yiming, “巴基斯坦外长访印，“破冰”易“融冰”难” (Pakistani Foreign Minister’s visit to India, “breaking the ice” is easier than “melting the ice“), Cfisnet.com, June 12, 2023.
[89] Wang Xu, Lin Yiming, “大变局中的中巴经济走廊建设(Construction of the China-Pakistan Economic Corridor amidst major changes)”, South Asian Studies 2022, (02)
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[97] Wang Xu, Lin Yiming, “大变局中的中巴经济走廊建设(Construction of the China-Pakistan Economic Corridor amidst major changes)”, South Asian Studies 2022, (02), Yun Wenjie, Deng Zuoqian, Ding Fang, “后疫情时代中巴经济走廊经济特区建设的意义与挑战(The Significance and Challenges of the Construction of the China-Pakistan Economic Corridor Special Economic Zone in the Post-epidemic Era)” , Studies on China’s Special Economic Zones. 2021(00), “美国人拒绝援助巴基斯坦，中国会怎么办”( What will China do if the Americans refuse to aid Pakistan?), 163.com, March 6, 2023.
[98] “巴铁防长哭穷：国家破产了！中国援助70多年，为何巴铁还是很穷？”, Baijiahao, February 23, 2022.
[99] “巴基斯坦会“解体”吗？前总理被暴力逮捕，我国该如何处理？(Will Pakistan “disintegrate”? The former prime minister was violently arrested, how should our country deal with it?”), Baijiahao, March 5, 2023.
[100] “Pakistan PM Sharif, minister Hina Khar’s discussion on US-China tussle leaked: Report”, The Times of India, April 30, 2023.
[101] “Pakistan faces more ‘difficult choices’ after pivot-to-China leak”, Nikkei Asia, May 8, 2023.
[102] Zhang Jiadong, “中美之间，巴基斯坦风向有变，邻国高层提出，要对中国一边倒”, Baijiahao, May 10, 2023.
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[105] “巴基斯坦面临“破产”，为何中国只能帮，却无法救？”(Pakistan faces ‘bankruptcy’ Why can China only help but not save?), March 7, 2023.
[106] Lu Jia, “全球新冠疫情下中巴经济走廊建设进入新阶段的研, (Research on the construction of the China-Pakistan Economic Corridor entering a new stage under the Covid pandemic), Contemporary Economy 2020, (09), 12-18
[107] Yun Wenjie, Deng Zuoqian, Ding Fang, “后疫情时代中巴经济走廊经济特区建设的意义与挑战(The Significance and Challenges of the Construction of the China-Pakistan Economic Corridor Special Economic Zone in the Post-epidemic Era)” , Studies on China’s Special Economic Zones. 2021(00
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[111] Zuo Ximei, Liu Wencui, “双循环背景下中巴经济走廊建设不确定性因素研究 (Research on Uncertainty Factors in the Construction of China-Pakistan Economic Corridor under the Background of Double Cycle)”, Practice in Foreign Economic Relations and Trade. 2022(01) Page:22-26
[112] Yun Wenjie, Deng Zuoqian, Ding Fang, “后疫情时代中巴经济走廊经济特区建设的意义与挑战(The Significance and Challenges of the Construction of the China-Pakistan Economic Corridor Special Economic Zone in the Post-epidemic Era)” , Studies on China’s Special Economic Zones. 2021(00)
[113] Zhang Daqing, “巴基斯坦与中国(“巴基斯坦与中国关系恶化是真的吗(Pakistan and China (“Is it true that relations between Pakistan and China have deteriorated)”, 93ta.cn, June 27, 2022.
[114] “巴基斯坦面临破产危机，关键时刻中国拉了一把” (Pakistan is facing a bankruptcy crisis, and China has a hand at the critical moment), Baijiahao, March 16, 2023.
[115] “Consider resumption of economic ties with Pakistan: parliamentary panel urges Centre”, The Economic Times, July 26, 2023.
[116] “Help Pakistan: India must be generous in sending aid and via the land route. It’s also smart strategy”, The Times of India, August 30, 2022.
[117] “Time for India to show ‘Vishwaguru’ credentials. Start trade with Pakistan”, The Print, March 28, 2023.
[118] Surjit S Bhalla, “Forget ashes, time to revive cricket’s biggest rivalry: There is little downside, and much to gain for both countries, from a renewal of India-Pakistan series”, June 24, 2023, The Times of India.
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[120] Sushant Singh, “The Challenge of a Two-Front War: India’s China-Pakistan Dilemma”, The Stimson Centre.
[121] Hasan Ali, “The U.S. Is Losing a Strategic, Nuclear-Armed Ally to China”, The Time, May 29, 2022.
[122] Syed Mohammad Ali, “The U.S.-China Strategic Rivalry and its Implications for Pakistan”, The Stimson Centre, December 1, 2020.
[123] ‘Dialogue with India beyond military realm is a need of Pakistan,’ says ex-Army official, The Indian Express, February 20, 2023.
[124] “打起来了，印军在克什米尔开火，美国给印度送大礼，巴铁有苦难言(The fight has started, the Indian army opened fire in Kashmir, the United States gave India a big gift, iron brother Pakistani is suffering)”, 163.com, July 9, 2023, https://m.thepaper.cn/baijiahao_7276602
[125] Cao Yun, “”一带一路”倡议下中巴经济走廊的投资障碍研究” (Research on Investment Obstacles of the China-Pakistan Economic Corridor under the “Belt and Road” Initiative”), Journal of Suihua University 2021,41(05),19-20
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Antara Ghosal Singh is a Fellow at the Strategic Studies Programme at Observer Research Foundation, New Delhi. Her area of research includes China-India relations, China-India-US ...
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