US courts Pakistan, China foots the bill: India watches warily

When United States President Donald Trump hosted Pakistan Army chief Field Marshal Asim Munir for lunch at the White House Cabinet Room and later in the Oval Office, it is said to have touched a ‘raw nerve’ in New Delhi. 

However, to be fair to Trump, who took credit for ending the 12-day Israel-Iran war, he had also invited Prime Minister Narendra Modi for a meeting at the White House, which was politely turned down.

While Indian geopolitical analysts expressed mixed opinions about the US-Pakistan bonhomie, it is undeniable that Washington found in Islamabad an old ally who could be relied on to play a critical role in the context of the Israel-Iran conflict. To keep its time-tested relationship with China on an even keel, Pakistan condemned “the US strikes on Iranian nuclear facilities, which come on the heels of a series of brazen attacks by Israel”.

Pakistan’s ties with both China and the US — with the latter on a downswing during the Joe Biden administration’s tenure — are built on shared geopolitical and geo-economics interests aimed at achieving different goals. To this extent, Pakistan’s participation in the Belt and Road Initiative (BRI), which dates back to 2013 when it was sealed between then Pakistan’s Prime Minister Nawaz Sharif and Chinese Premier Li Keqiang in Beijing, was projected to be a game-changer. 

The BRI was to be executed through an ambitious 2015 mechanism, the China-Pakistan Economic Corridor (CPEC), a massive infrastructure project in which China has so far invested a staggering $62 billion. This would connect western China to the Arabian Sea through to the Gwadar Port in Balochistan by a network of highways, bridges, tunnels, railways, and pipelines. 

In other words, the project was expected to have a ‘transformational impact’ on Pakistan’s fragile economy and unpredictable politics. Some analysts went so far as to describe the CPEC as the main ‘framework and platform for comprehensive and substantive’ Sino-Pak co-operation. Besides, it was aimed to be a ‘counterweight’ to India as part of a ‘necessary strategic commitment’.

Critical evaluation

The CPEC, which is expected to contribute 20% to Pakistan’s GDP, was hailed as a mechanism that could potentially upend the global political-economic order. However, Pakistani analysts have subjected it to ‘critical evaluation’, highlighting the pitfalls in achieving its full potential. Among the chief challenges to the CPEC is the perceived ‘threat’ from India’s Chabahar port in Iran to the Gwadar Port.

There is little doubt that the CPEC, in its current form and status, has proved to be beneficial, with connectivity projects in Punjab and Sindh (the East Bay Expressway in Balochistan, for instance), which have helped cut down travel time. So far, six projects – with a cumulative 1,656 km of highways – have been completed even as 18 projects are nowhere near completion.

As for the CPEC’s rail-based mass transit projects, only one (the Orange Line in Lahore) of the four has been completed.

Pakistani reports point to the ‘remarkable success’ CPEC has had on power projects. Between 2015 and now, 14 power plants with a combined 10,900-MW capacity were built. While this improved the country’s energy situation, there has been a corresponding ‘long-running underinvestment’ in local grids which has adversely affected power distribution in rural and urban areas. Seven critical power plants, including a 330-MW coal-fired utility at Gwadar, remain under construction.

Work on none of the nine special economic zones in Khyber Pakhtunkhwa, Sindh, Balochistan, Faisalabad, Islamabad, Karachi, Mirpur, Gilgit-Baltistan and the Federally Administered Tribal Areas (FATA) has begun, with only ‘feasibility studies’ being shared with the Chinese side. 

The port city of Gwadar, projected as a ‘hub of connectivity’ for the CPEC and an ‘indispensable interchange’ for the Silk Route, remains to be developed fully, in line with the corridor’s objective of ‘integrating it within the economic framework of Pakistan and China’. Of the 14 total projects aimed to transform Gwadar as an economic hub, only four – development of port and free zone, smart port city master plan, Pak-China technical and vocational institute and Gwadar Eastbay Expressway – have been completed so far.

The CPEC’s modest gains notwithstanding, Pakistani reports indicate that as the long-term mega-project enters its second phase of industrialisation and technology transfer, several roadblocks, including ‘unresolved financial and regulatory’ issues and substantial financial arrears, have cropped up in ways that could ‘hinder progress’. 

Niggling concerns

Pakistani analysts admit that China’s investment footprint goes beyond their country and has expanded and diversified towards the Gulf countries and Southeast Asia where there are stable regulatory regimes. At the same time, Pakistan’s internal issues — exemplified in its brittle internal security situation, general economic stagnation, and high energy costs — have served to deter Chinese investors. 

Earlier this year, Chinese Ambassador to Islamabad Jiang Zaidong offered a “compelling blueprint” to upgrade bilateral ties in ways that could be an opportunity for Pakistan. There have also been suggestions that the CPEC held potential for ‘deeper co-operation’ by way of revitalising Pakistan’s State-owned enterprise corridors by taking lessons from China’s ‘successful governance models’, market-driven competition, R&D investments, and global expansion.

There have also been suggestions that despite sluggish progress in building Special Economic Zones (SEZs), Pakistan is prepared to accelerate the process and take steps to attract ‘market-oriented enterprises’, push for co-operation in artificial intelligence, e-commerce collaborations and ‘third-party participation’ in CPEC projects.

There are doubts that the CPEC would achieve its goals by 2030. What is certain is that irrespective of Washington’s courting of Islamabad, China will continue to work in tandem with the Pakistani establishment, mainly as a counterweight against India. 

This was reflected in the recent Shanghai Cooperation Organisation (SCO) meeting in Qingdao where the Chinese side mentioned the Balochistan train hijack but overlooked the Pahalgam terror strike. A Beijing-New Delhi joint statement did not materialise for this very reason, which underscores the former’s continuing support to Islamabad.

Besides, regardless of the $29 billion that Pakistan owes to China, the latter extended a $3.4 billion loan to bolster the former’s $14 billion foreign reserve target that will enable it to secure an IMF bailout. The Sino-Pak all-weather friendship is here to stay.

Gunjan Singh is Associate Professor, OP Jindal Global University.

This article was first published under Creative Commons by 360info.

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.