Decoding China's grand BRI strategy

Even as China institutes greater controls to stem massive outflows of capital from its territory, it has announced an increase in the amount of investment it purportedly wishes to make in the China-Pakistan Economic Corridor (CPEC).

This announcement is meant to signal to the Pakistani military, a Chinese desire to stay the course on what has been described as the ‘flagship project’ of China’s the Belt and Road (BRI) Initiative. CPEC does indeed epitomise the grand strategy behind BRI and an inadequate understanding of the same is precisely what is leading to calls for India to join CPEC. 

Far from serving as a bedrock of future regional stability, CPEC is being used to fashion an even closer Sino-Pak military-strategic condominium that has sinis­ter implications for India. Rather than support a project like CPEC that impinges on Indian sovereignty, reduces its security and is designed to create a ‘Sino­sphere’ to India’s northwest, India will be better served by not just opposing CPEC officially, but also promoting the widening of fissures within Pakistan that this project has created.

As such, given the sharply declining forex reserves, China now has to be generally more judicious about overseas lending. But it wants to stay the course in Pakistan where its investments are also quite fraught with political risk. And, it is here that the grand strategy behind BRI reveals itself.

China does not see economics and security in silos as evidenced by Xi Jinping’s emphasis that security is a ‘holistic concept’, whi­ch is why BRI is also China’s major geopolitical push, looking to create a stake for itself by supp­orting quasi-authoritarian re­gimes on its Eurasian periphery.

Just as China’s failing investments in places like Venezuela were justified in terms of the ‘resource access’ gained, CPEC is seen by China a key enabler that will allow it to shape its inner Western front­iers in a manner that can counteract Washington’s pivot to Asia. With the so-called ‘march westwards’, it aims to develop a Chinese-led macro bloc in Inner Asia that can serve as a launchpad for the future.

Not only does Pakistan provide a key transit corridor that will serve as an outlet into the Indian Ocean for China’s Western provinces which are seeing rising industrial relocations from the coast and give it a modest alternative route for the import of hydrocarbons, it can also regulate the ‘terrorist tap’ as it were in Inner Asia.

On top of this, Pakistan is a key element in China’s game plan to counterbalance Indian strategic influence. For Pakistan, this heightened Chinese need for its support has coincided with its own need for serious developmental finance, something that the United States is seen as unable to provide. That is why CPEC is the most advanced of all BRI projects. 

However, the peculiar bilateral ethos of the Sino-Pak relationship that predicates itself on countering India is also palpably manifest in spillovers from CPEC. Denials and offers to ‘rename CPEC’ notwithstanding, China has quite clearly gravitated towards the Pakistani position on the Kashmir issue. It is actively trying to reinforce this by agreeing to make investments in Gilgit-Baltistan (GB) and using that in turn to build a security presence over there.

No coincidence

Indeed, Pakistan’s decision to declare GB its fifth province even as CPEC is underway is no coincidence. Neither is the fact that China continues to provide cover to Pakistani terrorists such as Mazood Azhar at the United Nations. In fact, this move is being ‘sold’ by the Pakistani Army to its terrorist auxiliaries as representative of China’s geopolitical  ‘utility’ with the sub-text that they need to focus the jihad on India’s Jammu & Kashmir rather than China’s Xinjiang.

The turn of events show that China wishes to manage its Western periphery in an alliance with Pakistan in a way that is deeply inimical to India’s security interests besides challenging Indian sovereignty. For India to support CPEC given these facts would be utmost folly. Instead, India should look towards exacerbating some of the intrinsic weaknesses of CPEC.

While Pakistan hopes that Chinese infrastructural investments will boost overall productivity, there are also fears of a ‘debt trap’ and that is why the Pakistanis want industrial parks as part of CPEC. But given China’s current economic outlook, it is demanding concessions for investing in these industrial parks, which would include tax breaks, subsidised utilities and the right to bring in ‘skilled Chinese labour’.

This will further strain Pakistan’s fiscal space and create local tension at a time of high unemployment. While using CPEC to create a security barrier in the Himalayas, the Chinese will constantly point to security issues for going slow on CPEC projects in insurgent-hit places.
 
India would do well to highlight such issues and make common ground with Pakistani elements that do not stand to benefit from CPEC. As CPEC projects falter and China’s ‘debt diplomacy’ begins, it remains to be seen just how durable the Sino-Pak relationship will prove to be, given that Pakistan’s military will lose face, even as assorted jihadis look to liberate the oppressed Uighurs of Xinjiang.

(The writer is a New Delhi-based commentator on security and energy issues)