Bharat Rakshak

Militants attacked a vehicle of an oil exploration company and killed two of its security guards in Balochistan's Gwadar district on Saturday.

Mansoor Gichki, a senior administration officer, told DawnNews that armed militants opened fire at the vehicle of a private oil exploration company in Pasni tehsil of Gwadar.

He said two private security men guarding the officials of the company were killed on the spot. The assailants escaped unhurt from the spot

"The private oil exploration company was engaged in conducting survey of the area when the vehicle of the company was attacked by miscreants," he added.

Levies and police personnel reached the incident site as an investigation into the incident went underway.

"The incident seems to be an act of targeted killing," Gichki said.

There has been no immediate claim of responsibility for the attack. Militants in the area have been attacking security forces and pro-government politicians for more than a decade.

The flagship project under the Belt and Road Initiative - the China Pakistan Economic Corridor (CPEC), has been seen as a ‘game changer’ in the regional geopolitical discourse since its formal unveiling in April 2015. It has become the foremost bilateral initiative between China and Pakistan, entailing a budget above $46 billion. CPEC has captured popular imagination in Pakistan, at a time when it is struggling to get its economy back on track. Through the successful execution of the CPEC, China looks forward to adding a significant brand value to its overseas developmental initiatives enunciated as One-belt-One-Road. {That is why China desperately wants CPEC to succeed}

With a spectacular GDP having trillions of dollars in reserve, China is seeking to invest in projects abroad that can enhance connectivity, utilise idle capital and sustain its economic growth. In this context, CPEC is conceived as a project that will give China overland access to the Arabian Sea through the Pakistani port of Gwadar, bring development and prosperity to Pakistan - a long-time friend and ally, and cement strategic ties between the two. Innocuous as it may appear, with its passage through the disputed territory of Gilgit-Baltistan and its access and control of Gwadar port - situated in close proximity to the energy-rich Western Asian region, CPEC has provoked the regional/sub-continental security debate ever since it was announced with great gusto by China and Pakistan.

Enveloped in a geopolitical chimera, the focus of the emerging discourse on CPEC is clearly tilted towards its economic and strategic imperatives. However, the flip side of the project concerning its political viability is being ignored. Considering that the CPEC is set to traverse through Xinjiang, Gilgit Baltistan and Balochistan simmering with large-scale political discontent, there are lurking uncertainties facing the future prospects of the project, widely hailed as a harbinger of enhanced regional connectively and trade.

The staple factors put forth to justify the CPEC include China’s geographical constraints vis-à-vis southern waters in the Indian Ocean as well as Pakistan’s ever intensifying energy crisis. The idea of connecting China to the strategically important waters of the Arabian Sea though has evolved over a period of time, way back to when the Karakoram Highway was constructed during the 1960’s and 1970’s. The strategic highway built through the only land link between China and Pakistan (read Gilgit Baltistan) in many ways blueprinted the idea of an intensive connectivity network of what is today envisaged as the grand CPEC project.

The issue brief is an attempt to assess the CPEC on the viability quotient as it stands on the plank of long-raging political questions and evaluate the level of concord in the three major geographical segments of the corridor. Premised on the fact that the political conflict in these regions has received comparatively lesser attention in the overall CPEC discourse, the issue brief seeks to un-layer strands of commonalties in these regions vis-a-vis political unrest and collate the larger complexities of prolonged neglect and abject exclusion. Parallel to the political prism, the brief takes into account the geopolitical discontent triggered by the CPEC, whilst looking at likely impacts to be incurred on the complex triangular geopolitical equations between India, Pakistan and China in general and CPEC in particular.

Across Contested Geographies

The CPEC stretches across zones witnessing conflict, subjugation and political exclusion. These regions continue to be tarred in raging political discontent and are inflicted by deep seated deficit of trust. Slated to originate in Kashgar in the Xinjiang Uighur Autonomous Region (XUAR), the corridor is designed to enter Gilgit Baltistan via the Khujerab Pass before spreading out in parts of Pakistan. In Pakistan, the CPEC travels through Khyber Paktunkhwa, Punjab before culminating at the warm water deep sea port at Gwadar, situated at the southern edge of the restive Balochistan province. While Xinjiang for long has witnessed an incessant ethnic strife offering stiff resistance to Han dominance, Gilgit Baltistan is reeling under lack of constitutional status and political ambiguity since the region’s violence-embroiled accession to Pakistan in 1947. Balochistan in Pakistan is infested by insurgency and prominent political groups led by ethnic Balochs have directly challenged the writ of the state during multiple phases of extreme violence and conflict.

All three regions - Xinjiang, Gilgit Baltistan and Balochistan - share rather conspicuous parallels concerning territorial contestations, rejection of state apparatus by the local populace who claim a legitimate right over local resources. Similarly, all these geopolitically key regions contain vast expanses of landmass - Xinjiang is the largest administrative division of China, Balochistan forms 46 per cent of Pakistan while Gilgit Baltistan forms the major portion of what is referred to as Pakistan-Occupied Kashmir (POK). It is rather intriguing that the CPEC which is riding high on the developmental, network-connectivity agenda, boasting of a mammoth multi-billion budget, is traversing regions where the state has allegedly been deeply involved in altering demographics to diminish/wipe their exclusive ethnic characters. As a result, strong undercurrents of rebellion and dissidence prevail in these geographical entities.

Xinjiang: Xinjiang, the western most part of China where the CPEC originates, has been reeling under strife owing to political and ethnic reasons. The political discontent stems from ethnic/identity issues and of late has been triggered by relentless subjugation of the majority Uighur population in the province (and a minority in China). Groups such as Turkistan Islamic Party (formerly the East Turkestan Islamic Movement-ETIM) advocate Xinjiang’s independence from China. They have refused to accede to the Chinese control on the region obtained in 1949, challenging it on the pretext that the origin of the state lay somewhere else and it does not belong to the Peoples Republic of China (PRC).

Gilgit-Baltistan: As noted earlier, Gilgit Baltistan is part of POK. While under Pakistan’s territorial control, the region is still not considered a part of it either constitutionally or politically after almost seven decades. More significantly, the region is claimed by India as part of the erstwhile princely state of Jammu and Kashmir (J&K) ever since the Instrument of Accession was signed in India’s favour by Maharaja Hari Singh in October 1947. An inordinate wait for political rights and identity has been aggravated by a prolonged phase of political neglect and state apathy. Nationalist sentiments have spawned in Gilgit Baltistan over the years and have found vent in an array of nationalist/political groups some of whom are defiant to the extent of seeking independence from Pakistan.

Balochistan: Balochistan did not immediately accede to the newly formed Pakistan in 1947. Its formal accession to the latter in March 1948 was preceded by a spell of uncertainty and intervention by the Pakistan military. Ever since then, the region has been embroiled in a perpetual state of turmoil and political tussle with the Pakistani state. The insurgency in Balochistan has refused to recede even after military’s stringent measures to tide over violence. The Balochistan situation has degenerated especially since 2003-04 under a patently ruthless regime involving indiscriminate state action against individuals, institutions and political groups refusing to comply with Pakistan’s control. Draconian tales of forced disappearances, death squads and extra-judicial killings have continuously poured out of Balochistan on a regular basis.

Disenchanted Populations

The CPEC covers expanse of populations that are inflicted by political angst - ones that have challenged directly the writ of the state controlling them. These people for decades continue to be been at odds with the state authority concerning issues of political rights, resource ownership, economic rights and power sharing. A significant section of population in these region remains disenchanted, more so, disengaged to the mainstream processes.

Ethnic and political exclusion: The regions face ethnic exclusion against dominant majoritarian groups - Uighurs against the Han Chinese, Shias of Gilgit Baltistan versus Pakistan’s Sunni dominance and ethnic Baloch people against Punjabi patronization. In Xinjiang, China has subjected ethnic population to high handedness and freak elements of control. The state has used possible tools of discrimination against the ethnic Uighurs, who constitute about 90 per cent of the local population. Popular outbursts have frequently resulted in widespread ethnic riots in Xinjiang as manifested grossly in 2009.1 Recently, there were extensive reports that the Chinese government resorted to extreme measures at times by forbidding the ethnic Uighurs from observing fast during the holy month of Ramzan.2

Balochistan has witnessed similar persecution of ethnic Baloch and brazen discrimination by the Pakistani state. Since 1947-48, Pakistan’s equations with Balochistan have been patchy and rough. Resistance against Pakistan has persisted through several phases in 1950s, 1960s, and so on. The military has been at the helm of Pakistan’s equations with the Balochi people. Autocratic practices such as death squads, forced disappearances, wrongful detention and extrajudicial killings allegedly perpetrated by the state continue unabated even as the region remains one of the flashpoints of human rights advocacy and international attention at large.3

Similarly in Gilgit Baltistan, the sense of political alienation and malaise is extremely deep-rooted. The lack of a political status and constitutionality in Gilgit Baltistan has ratcheted up popular sentiments against Pakistan. Complementing the popular attitudes, a number of political groups exist in the region dissenting Pakistan’s highhanded rule, while others seek autonomy or even complete independence. Politics in Gilgit Baltistan has remained subservient to Pakistan’s larger agenda against the region - one that has reduced it to be a mere pawn in Pakistan’s dubious Kashmir gambit.

Outsourced resources: Coincidentally, the three in-focus regions are rich in natural resources. Designated as ‘‘national energy strategy base’’4 , Xinjiang houses oil reserves that run in billions of tons, accounting for 1/5th of China’s aggregate oil reserves. Besides, coal reserves are about 40 per cent of the total followed by the largest gas reserves within China.5 Irrespective of ethnic strife, China has engaged in expanding refineries and extraction activities in the region. Gilgit Baltistan has vast reserves of minerals and hydro power potential while Balochistan is blessed with significant gas reserve.

The availability of resources unfortunately does not reflect as much in the development indexes concerning these regions. For long, these resources remained untapped before the states in question decided to harness these by either outsourcing them to external players like China (in Balochistan and Gilgit Baltistan) or diverting the resource wealth towards purposes other than local development. Sustained neglect of local interests has accentuated popular angst in these regions which has frequently led to protests and disruptive activities.

Trepidation against China: A common strand of widespread China-centric apprehensions is visibly prevalent in Xinjiang, Gilgit Baltistan and Balochistan with strong undercurrent of anti-China trepidations. While in Xinjiang, the anti-China sentiments is attributed to marginalization and suppression of ethnic Uighurs, in Balochistan the quest against the Chinese revolves around the fear that local resources are being exploited to serve Chinese interests. Notably, the broader understanding is that the immediate trigger for the outbreak of the current spell of insurgency in the region was due to the award of the Saindak mining field contract in the Chagai hills to the Chinese.6 Similar sense of apprehensions and resistance overcast the handing over of the Gwadar Port administration to China in 2013 after the previous Singaporean enterprise decided to withdraw.
Elements Of Dissonance

Apart from the geography-driven factors as discussed above, the CPEC has already unleashed a series of discord both at the political and geopolitical level. In Pakistan, the CPEC is emerging as the latest flashpoint of inter-provincial tussle after the controversial Kalabagh dam project. On the other side, CPEC has been at the centre of bilateral/trilateral discord between India, China and Pakistan. Some of the broad drivers of discontent already playing out, well before the CPEC could actually culminate.

Political dissonance: In Pakistan, the CPEC is currently hailed by metaphorical adjectives such as ‘game changer’, and being advertised as a fountainhead of peace, stability and development.7 The corridor that spreads across several parts of Pakistan has spiralled inter-provincial rivalry and discord regarding share and benefits. Such dynamics have previously marred the pace of development-oriented infrastructure projects, glaring examples being the Kalabagh dam and the Diamer Bhasha dam project.8 The interprovincial ties within Pakistan have perennially been fragile and equally precarious - explicit during the Kalabagh dam controversy, wherein a much wanted hydropower project was shelved owing to discord between Sindh, Khyber Pakhtunkhwa and Punjab.9 It is important to note that had the Kalabagh dam project reached fruition, the much pronounced energy woes in Pakistan today would have largely been averted.

Years down the line, the ghosts of Kalabagh appear to hover on the CPEC route controversy. There is much bad blood between the provinces over preferred route options and share in the proceeds from several projects within. For instance, there were several routes floating in the public domain and consensus on zeroing in on a particular route had been eluding ever since. For a long time, there was uncertainty whether Balochistan to the extent possible would be avoided in the CPEC routing. This was mainly due to concerns on continuing political strife and cyclical occurrence of violence in the region.

Likewise in Gilgit Baltistan (part of POK), people are oblivious to their role and share in the CPEC.10 In August 2015, the Gilgit Baltistan Legislative Assembly passed resolutions demanding setting up of economic zones in the region under the CPEC stable. At the same time, the house also demanded Gilgit Baltistan’s participation in the Consultative Committee on the CPEC.11 Seething under lack of a constitutional status, popular opinion in the region seems incrementally driven towards knowing their actual stakes in the multi-billion corridor. Concerns on getting a rightful share in the CPEC harvest have also resonated in the so called Azad Jammu and Kashmir (‘AJK’) - the other name for POK, where the newly appointed President Masood Khan contended before the Standing Committee of the National Assembly on Kashmir and Gilgit-Baltistan that the region too should get its ‘due share’ being a ‘natural part’ of the CPEC.12

The overbearing Punjabi component in Pakistani politics and the army has spurred apprehensions with some sections referring to the CPEC as the ‘China Punjab Economic Corridor’.13 Such views gravely overshadow the popular enthusiasm involving the sheer size and volume of the over $46 billion Chinese-aided development corridor.

Geopolitical/strategic discord: The CPEC is slated to cut through swathes of territory in POK on which India has a standing claim. India’s rather underplayed policy on POK has, nevertheless, featured several objections to Chinese involvement in building hydropower projects and infrastructure in parts of POK. In sync with its official stance, India has been opposed to the idea of a connectivity corridor being built through a contested territory i.e., Gilgit Baltistan - geographically an essential part of India’s extant claim. India’s concerns have been taken up at the highest level with China, including during Prime Minister Narendra Modi’s visit to the PRC in May 2015. India’s reservations on the CPEC have also been emphasised in the bilateral parleys with China and Pakistan. While the public opinion on the CPEC in India is still shaping up, it appears somewhat divided with a sizeable constituency viewing the corridor as a potent challenge for India’s long term security interests.

India-Pakistan ties have yet again hit a rough patch in the wake of the Uri attack and subsequent cross Line of Control (LoC) strikes. This was in the immediate aftermath of the spate of violence in J&K in July 2016 followed by Prime Minister Modi’s Independence Day speech in which he boldly expressed gratitude to the people of POK and Balochistan.14 India not only appears to substitute the policy rut on POK with proactive forthrightness but also looks prepared to harden its stance on POK and Balochistan, if need be. India-China ties have been on test due to the Nuclear Suppliers Group (NSG) episode and China’s gambit in obstructing Jaish e Mohamed chief Masood Azhar’s proscription at the United Nations. Disturbing trends such as these afflict triangular dynamics between the three countries. Coupled with India’s freshly acquired Balochistan pitch, constellation of forces such as these may impact the feasibility/viability of the CPEC in some, if not considerable measure.

The Road Ahead

It is essential that the discussion on these three regions is also contextualized in the development versus discontent paradox. The debate on the correlation between development and political stability - on how the two propositions impact each other or remain diametrically opposed, is wide. Correspondingly, there is also the dilemma regarding what comes first - political stability or economic development. Considering the extent of political instability and economic lag in the regions the CPEC travels through, it would be interesting and worthwhile to observe the prospects of medium and long term impact of the CPEC over these lands.

More significantly, any approximate analysis concerning the contours of CPEC’s future course must essentially factor in two drivers of prime significance – Pakistan’s grim international security parameters and China’s risk averse behaviour. CPEC’s arterial spread inside Pakistan as well as POK make it dependant on Pakistan’s internal security situation, which has witnessed a steep downslide despite the army’s projected resolve to purge militancy and violence. In view of recurring incidents of mass killings abetted by several militant groups across Pakistan, especially Balochistan, the prospects of the CPEC acting as a harbinger of stability and development appear more than dismal. Before this happens, Pakistan needs to shed its long standing affinity to militancy as an instrument of state policy and inspire confidence amongst provinces thereby creating an environment conducive for economic development and stability.

As the corridor charts across hotbeds of unrest and instability, through lands of contested statuses, it will litmus-test China’s risk-averse investment behaviour. China in the past has steered clear of politically contentious projects such as the Diamer Bhasha dam (in Gilgit Baltistan) - a controversial project territorially challenged by India and also the scene of an existing boundary discord between Khyber Pakhtunkhwa and Gilgit Baltistan. Whether or not China is able to take a deep plunge in the risk-ridden investment landscape remains to be seen.

The first outgoing shipment of containers carrying Chinese goods departed from Gwadar port on November 13, 2016. The media event was attended by Pakistan’s top policymakers as well as a high-level Chinese delegation. Despite this important first step for the China-Pakistan Economic Corridor (CPEC), many people in Pakistan still approach this project with a sense of cautious optimism.

Nearly all will say CPEC is a game-changer, but some will ask for whom? Others will flag that CPEC is the largest foreign investment into Pakistan, but many will question whether the country will be able to bear the debt burden resulting from it. Some will talk up how the various sub-routes could lift under-developed cities and towns, but others will question whether these sub-routes will even materialise as China is really only interested in the direct route from Kashgar to Gwadar.

To understand the policy motivation behind OBOR, one must realize that China is desperate to maintain its growth momentum, especially with the uncertain outlook for the global economy

This confusion exists because fresh information on CPEC is mostly anecdotal, rather than from a credible official source. People will highlight the increasing number of Chinese in the country (on flights, hotels, shopping malls, etc); the rapid pace of development at Gwadar port; and how the first Chinese shipment moved through different ports of Pakistan to reach Gwadar. Other than the recent shipment, concrete details are scarce.

Even so, Pakistanis feel the partnership with China is critically important for the country, though they are unsure whether it will materialise fully. On the other hand, the global reaction to China’s One-Belt-One-Road (OBOR) – of which CPEC is a part – falls into one of two categories: those who think the project is simply not feasible in terms of scale, or the resources needed or the timeline; and those who fear that OBOR is China’s master plan for global domination in the 21st century (see map below).

Observers concerned about OBOR’s feasibility flag the sheer scale of this undertaking, and the apparent disconnect with available funding sources. Bankers will highlight the inherent risks in long-term infrastructure projects, which are compounded by the large number of participating countries. They will focus on financial/trade guarantees, regulatory reach/enforcement, and legal cover and recourse.

While none of these misgivings are unreasonable, we believe they fail to consider several key points. But the basic issue raised by sceptics is entirely legitimate.

So the 46 billion dollar question is whether these fine-print concerns could sink the project. Is the devil really in the details?



What China seeks from OBOR

To understand the policy motivation behind OBOR, one must realise that China is desperate to maintain its growth momentum, especially with the uncertain outlook for the global economy. In fact, if China’s economic growth slows significantly, there are legitimate fears this could spark social unrest and political instability.

In our view, the challenges facing Chinese policymakers could be ranked as follows:

1. Secure shipping lanes. As the world’s largest importer of oil and gas, China needs to ensure that its shipping routes are not vulnerable at the choke point – the Malacca Straits. Hence, Corridors 1 and 2 of OBOR have immense strategic value for China, not just for fuels and minerals, but also to access Central Asia, the Middle East and Africa.

2. Develop Western China. While the coastal areas are largely developed, Western China is somewhat neglected. For political harmony, policymakers need to focus on Western China, which explains why Corridors 1, 2 and 3 of OBOR originate out of the Western provinces.

3. Use China’s spare capacity. Building physical infrastructure has fueled China’s economic growth. With growing concerns that policymakers may have over-invested, China’s installed capacity in steel, cement, bulk chemicals and heavy machinery, is now under-utilised. Building infrastructure in neighbouring countries would be a convenient way to use this spare capacity.

4. Create new export markets. China perhaps realises that exports to the member countries of the Organisation for Economic Co-operation and Development (OECD), which have been driving its economic growth, may continue to fall. In effect, it needs to cultivate new markets in Africa and Central Asia, which have significant growth potential.

5. Create goodwill with neighbouring countries. OBOR entails establishing training institutes and schools in participating countries, which should support the project and be mutually beneficial.

While it is clear that China has to be ambitious, OBOR may not be quite as ambitious as it appears. For example, China may not deliver all six corridors, these corridors may not extend as deeply as envisaged, and each corridor may not include roads, railroads and pipelines as currently planned. But even half of the currently planned OBOR network would go a long way towards securing what China needs.

In fact, we believe there is a latent priority within the six OBOR corridors, with Corridor 1 and 2 on top of the list for strategic reasons. This may be why Corridor 1 (CPEC) has been the first order of business for China under OBOR. Taking a staggered approach makes sense, as it limits the resources that have to be committed upfront. Furthermore, negotiating the first two corridors is likely to be less problematic for the Chinese (compared to Corridors 5 and 6) as there are fewer participating countries in Corridors 1 and 2 (Pakistan, Kazakhstan, Uzbekistan, Turkmenistan and Iran) -- and some of these countries do not enjoy close ties with the United States.

China’s unique approach to economic reforms

Many third world countries were more developed than China in the 1970s. In light of this, China’s current standing in the global economy clearly reveals why its economic transformation is considered a miracle. After Tiananmen Square in 1989, China embraced economic reforms with even greater fervour.

The architect of this accelerated growth was Deng Xiaoping. In 1978, Deng challenged the Chinese to double China’s economy by 2000 and make China a middle-income country by 2050. China far exceeded his expectations when it overtook Japan to become the second-largest economy in 2010. Deng’s heuristic (learning-by-doing) approach to economic reforms defied the collective wisdom of the World Bank and the International Monetary Fund (IMF).

It is somewhat ironic that the development strategy advocated by the Washington Consensus, under which the World Bank and IMF operate, is far more ideologically burdened than the one used by Communist China to reform its own economy. Compared to Pakistan, the Chinese were far more practical – and result-oriented – in their approach to economic reforms.

Most importantly, China displayed the political will to change. But political will, while essential for the success of reforms, is not enough. An effective strategy is also needed and China used a novel one that yielded unprecedented results.

Bo Qu, a visiting scholar at Princeton University, highlights two key characteristics of China’s economic reforms since 1978.

It is somewhat ironic that the development strategy advocated by the Washington Consensus, is far more ideologically burdened than the one used by Communist China to reform its own economy.

First, economic reforms do not proceed according to a well-defined blueprint. Qu states that experimentation is a fundamental part of China’s policy formulation, and the process is primarily driven by specific problems encountered during implementation. In effect, the real focus should be on solving practical problems, instead of persisting with ideologically appealing, but ineffective institutional arrangements.

Second, China’s reforms were gradual and incremental, without hard timelines. Qu states that incremental reforms reduce adjustment costs as policymakers are able to balance the pace of reforms with social stability.

Despite starting as an under-developed agrarian economy in the late 1970s, China did not approach the international financial institution (IFIs) for policy advice or financial assistance. The stark contrast between this approach and Pakistan’s experience since the late 1980s cannot go unnoticed. Although Pakistan has been working to restructure its economy for the past 25 years, many would argue that little has been achieved.

China’s Family Production Responsibility System (FPRS) is a good example of the heuristic approach to economic reforms. Before this, China had communal farms with strict production quotas, where even meals were a group activity. The FPRS (which is still in force) allowed individual farmers to rent arable land from the government, in exchange for a specific quota of produce/crops. The rent was paid to the local government.

This simple idea, which effectively permitted farmers to sell surplus produce in village markets, was first implemented in specific provinces in the mid-1970s. When positive results were realised, these experiments were carried out with different crops, and then replicated in other provinces of China.

The FPRS was formalised as policy in 1978 – by 1984, 99 per cent of China’s total agricultural production was incentivised by the private gains of individual farmers. The scale of this change can only be appreciated when one realises that China’s rural population was about 800 million to 850 million people at the time.

This policy alone lifted most of China’s population out of poverty.

China’s success with large-scale economic transformation suggests that it would be an ideal partner to execute CPEC. But even more importantly, China’s tried-and-tested approach to reforms, which is incremental and open to change as the situation evolves, suggests that a lack of concrete details is not cause for alarm. This appears to be how the Chinese prefer to work.

Is OBOR a plan for global domination?

We disagree with the perception that OBOR aims for global domination. First, the specific focus on Asia (effectively ignoring Africa and Latin America) does not reveal global ambitions; and, secondly, since China is the third-largest country by landmass and the second-largest economy in the world, any of its long-term strategy – by definition – will be on a “global” scale.

What is harder to explain is China’s policy in the South China Sea. For a country trying to downplay the perception that it seeks to challenge the US for global domination, China’s strategy in Asia Pacific is surprisingly aggressive. However, changing one’s perspective could explain China’s orientation on this issue.

The Asia Pacific region has a significant US military presence. American bases in Japan and South Korea can be traced back to WWII and the Korean War, but have lost their tactical importance with the end of the Cold War. Furthermore, the continued US presence in Australia, the Philippines, Thailand and the Indian Ocean has the potential to disrupt trade flows destined for – and originating from – China. Since China’s hard power comes from its trade flows, the Chinese are justifiably concerned that a stand off with the US, on any issue, could easily strangle its domestic economy.

The geopolitical dimension of CPEC

While OBOR may not be a plan for global domination, it does seek to change the global status quo. Creating a physical corridor to the Arabian Sea will give China direct access to a deep-sea port that is close to the largest hydrocarbon exporters and a shortcut to Europe, the Middle East and Central Asia.

One must consider how this project challenges the global status quo, the US control of global shipping lanes and India’s ambitions to control the Indian Ocean. The growing tension between the Asian giants (China and India) and the hostility between Pakistan and India explains why CPEC is so strongly opposed by India.

The resistance to Gwadar becoming a fully functioning port is perhaps being reflected by the troubles in some parts of Balochistan — specifically targeting the Pakistan Army and local law enforcement agencies. These terrorist attacks may be an effort to undermine CPEC.

For a country trying to downplay the perception that it seeks to challenge the US for global domination, China’s strategy in Asia Pacific is surprisingly aggressive.

Although Pakistan’s support for CPEC is clear from the army’s active role in guaranteeing security and the endorsement by Pakistan’s main political parties, if the placement of the various routes is hampered by bureaucratic red tape and provincial self-interests, the key Gwadar-Kashgar corridor could be the only route that will be built.

This “CPEC-lite” will fulfill China’s needs, but will not create the economic spillovers the other routes promise.

In the context of the geopolitical prize that is Gwadar, the following is a simplistic assessment of CPEC: China finances and builds the project, while Pakistan pays in terms of social and political disruption, and the loss of innocent lives. Given the strategic importance of the Gwadar-Kashgar corridor to China, this component of OBOR will surely be completed because it is motivated by more than just economics.

This is about securing China’s trade routes and allowing it to position itself in the Arabian Sea.

We believe this partnership with China could be the key factor that will place Pakistan’s economy on a more sustainable path forward. As China targets Central Asia, the Middle East and Africa as part of its strategy for the 21st century, it simply cannot afford to have an economically unstable partner in CPEC.

This geopolitical compulsion should generate the political will to undertake tough economic reforms in Pakistan and also ensure that CPEC is sustainable and profitable for the country.

The China-Pakistan Economic Corridor is a mainstay of China’s “One Belt, One Road” strategy to build its trade routes and influence westward through Asia. Nineteen months after China and Pakistan signed a series of CPEC deals, the project is underway—a sprawling collection of energy projects, road construction, special economic zones, and industrial parks. But questions remain pressing. Armed dissidents in Pakistan’s Balochistan province resist the project as an unfair exploitation of their region. A recent speech by Indian Prime Minister Narendra Modi has raised questions about how energetically his government might oppose it. What is the U.S. response to CPEC, and what should it be? Could China’s project complement U.S. efforts to stabilize Afghanistan by building trade routes from Central Asia to the Indian Subcontinent? The December 1 USIP panel will examine the progress of CPEC so far, and its costs and benefits for Pakistan, South Asia and the United States.

ashbhee wrote:Next time Pak escalates like a Kargil, why can't IA march into POK and liberate Gilgit-Baltistan, open a land route to central Asia and call Pak's Nuclear bluff. Blocking CPEC will be a plus.

Dipanker wrote:

ashbhee wrote:Next time Pak escalates like a Kargil, why can't IA march into POK and liberate Gilgit-Baltistan, open a land route to central Asia and call Pak's Nuclear bluff. Blocking CPEC will be a plus.

Why wait for a Kargil. Just take it back. If China wants to CPEC/trade with Pakistan then it can pay transit to India in G/B.

I do not think GOI would want to escalate it to that level and risk a nuclear exchange. I was hoping few military experts would comment on the feasibility of this.

Prem wrote:http://www.usip.org/events/will-cpec-be ... r-conflict
Will CPEC Be a Force for Peace or Conflict?

The China-Pakistan Economic Corridor is a mainstay of China’s “One Belt, One Road” strategy to build its trade routes and influence westward through Asia. Nineteen months after China and Pakistan signed a series of CPEC deals, the project is underway—a sprawling collection of energy projects, road construction, special economic zones, and industrial parks. But questions remain pressing. Armed dissidents in Pakistan’s Balochistan province resist the project as an unfair exploitation of their region. A recent speech by Indian Prime Minister Narendra Modi has raised questions about how energetically his government might oppose it. What is the U.S. response to CPEC, and what should it be? Could China’s project complement U.S. efforts to stabilize Afghanistan by building trade routes from Central Asia to the Indian Subcontinent? The December 1 USIP panel will examine the progress of CPEC so far, and its costs and benefits for Pakistan, South Asia and the United States.

Live stream in tomorrow evening.Panelists Hussain Nadim
Senior Pakistan Expert, Asia Center, U.S. Institute of Peace
Former Special Assistant to Federal Minister of Planning, Development, and Reforms, Government of Pakistan
Arif Rafiq President, Vizier Consulting, LCCFellow, Center for Global PolicyNon-Resident Fellow, Middle East Institute
Sarah Watson Associate Fellow, Wadhwani Chair in U.S.-India Policy Studies, Center for Strategic and International Studies
Hai Zhao Research Fellow, National Strategy Institute, Tsinghua University, China
Jennifer Staats, Moderator Director, China Program, Asia Center, U.S. Institute of Pe

svinayak wrote:

Prem wrote:http://www.usip.org/events/will-cpec-be ... r-conflict
Will CPEC Be a Force for Peace or Conflict?

Why is GOTUS interested in CPEC

Peregrine wrote:The giddy brigade
<snip>
CPEC is a good thing for Pakistan, but as a road project alone, it is not viable for long-distance trade at the moment.

It connects the economy of Pakistan with the economy of Xinjiang province in China, not the total economy of China because most of that is located on the East coast where there are already multiple sea ports available for a fraction of the cost of overland freight.

So how large is the economy of Xinjiang? Answer: $150 billion. Meaning, the project is actually connecting us with an economy that is smaller than our own. I see no sense in the argument that Chinese oil imports could be diverted through Gwadar. Overland cost of transporting oil is multiple times what the sea cost is, and the province of Xinjiang is already surplus in oil, meaning they are not likely to be importing oil through Gwadar, only to transport it overland, across a 16,000-foot mountain pass.

As a strategic proposition, there may yet be more merit to CPEC, but as a commercial proposition, the trade possibilities it is opening up will be decades before they become viable and grow to any appreciable volume. The project should be pursued, but the giddiness needs to be tempered and a more realistic approach is necessary.

yensoy wrote:Let's look at the claims and reality of CPEC. First, understand Western China - Xinjiang in particular. Xinjiang has a good degree of agricultural activity - a lot of cotton, grapes and dried fruits, and spices are produced here. Some of the grapes are processed into haram alert! cheap wine. Sheep are aplenty, so presumably some meat & wool is produced. And then Xinjiang has oil.
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All this talk of CPEC being an alternative to Malacca is BS. China has ample strategic reserves of crude; it has its own oilfields; it has offshore fields; it has pipelines from CIS countries - all these will be more than sufficient during war. CPEC won't make a dent on peacetime consumption. A VLCC can carry about 2million barrels of oil; at 100barrels/truck you would need 20,000 trucks. That number is probably more than the total number of tanker trucks in Pakistan.

Rudradev wrote: ="svinayak"

Why is GOTUS interested in CPEC

There is a major propaganda push under way by Beijing to convince US Deep State entities that CPEC (in fact, OBOR) is a positive development for the US as much as China.

I recently met a US academic who informed me that he believes Xi Jinping is "committed to international stability". Why? Because of OBOR. This is the traditional Hamiltonian thinking whereby OBOR will increase trade ties, enmeshing the interests of transnational corporate entities more closely together, and eventually yielding dividends in terms of a "peaceful" Asian order that both Beijing and Washington will have a profound mutual interest in maintaining.

Guddu wrote:My take on CPEC is that China is building multiple back ups to bypass the Malacca Straights and secondly, they are looking to create a military/naval base at Gwadar. If the road route takes off, great from the Chinese pov, its only a back up route that may never be fully operational.

pankajs wrote:Will CPEC carry 100% or 10% or 1% or much lower portion of the Chinese Malacca trade?

pankajs wrote:My post did not talk of profits and Mayanmaar route has NO relation to CPEC capacity. My question was limited to CPEC capacity when compared to Chinese Malacca trade volume for which it is supposed to be a backup.

A One or a million container capacity means nothing unless the context/benchmark is clearly stated.


The rest is maya ....

China trucks snaking thru #GilgitBaltistan bringing Chinese men, goods, pollution, congestion

Robbing locals of jobs

saurav_jha wrote:Are we not being too optimistic with CPEC ? China is seducing Iran to join CPEC and link Gwadar with Chahbahar. Unless huge anti-Shia movement starts in Pakistan, we may find China sitting pretty in Gwadar.