Context:
Pakistan’s Prime Minister is currently on a five-day visit to China. The visit is anticipated to involve the formal announcement of the second phase of the China-Pakistan Economic Corridor (CPEC).
About CPEC:
- Launched in April 2015, the $62-billion China-Pakistan Economic Corridor (CPEC) runs about 2700 km from Gwadar to Kashgar. It is a part of China’s Belt and Road Initiative (BRI).
BRI is a massive infrastructure investment project, aiming to boost China’s global influence by investing billions of dollars across about 100 nations. - CPEC is divided into three phases, with the completion of the first phase, the second phase has begun and the third (final) phase is planned to end by 2030.
- CPEC involves building power plants, roads, railways, and the Gwadar port in Pakistan.
- CPEC Phase-II is 36 times larger in magnitude as compared to the previous phase. The focal areas to be developed in Phase-II include industry, trade and agriculture. Around 27 projects are designed to be executed as a part of Phase-II.
- This project holds strategic importance for China, granting it direct access to the Indian Ocean through highways in Pakistan-Occupied Kashmir and across Pakistan.
Current status of the project:
- The initial phase of CPEC focused on infrastructure, energy, and port development, but progress has been slow and inconsistent.
- Gwadar port’s development also has been particularly slow due to several delays, with many projects still unfinished.
- According to official Chinese sources, by 2022, CPEC had brought $25.4 billion in terms of direct investment to Pakistan.
Major causes of delay:
- CPEC has faced challenges due to Chinese concerns over corruption, redtapism, and political instability in Pakistan.
- Violence and security issues led to several Chinese personnel casualties in Balochistan, where Gwadar port is situated.
- Despite promises, CPEC-related developments have not significantly benefited the local Baloch population, aggravating feelings of economic injustice among them.
Major Pakistani Concerns over CPEC:
- Reviving CPEC is crucial for Pakistan’s struggling economy, but there are doubts over its effectiveness and the project’s impact has also been limited.
- Although CPEC aimed to create over 2 million jobs, official data show far fewer (around 2.5 lacs) jobs have been generated.
- Pakistan’s debt to China has surged significantly since CPEC’s announcement, raising fears of overreliance and potential loss of sovereignty and leading to Pakistan becoming a de facto Chinese client state.
India’s Stance on CPEC:
- India’s stance on the China-Pakistan Economic Corridor (CPEC) is one of strong opposition.
- India views the CPEC as a violation of its sovereignty and territorial integrity since the corridor passes through parts of Jammu & Kashmir, which are under illegal occupation of Pakistan (POK).
- Despite China’s and Pakistan’s interest in involving third parties in the CPEC, India maintains that connectivity initiatives should adhere to universally recognized norms, good governance, and respect for territorial integrity.
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