July marked a significant milestone as the 10th anniversary of the China-Pakistan Economic Corridor (CPEC) was commemorated, a pivotal element of China’s ambitious Belt and Road Initiative.
The signing of the CPEC agreement, coinciding with China’s four-decade-long economic reforms and opening up to the world, represents a significant breakthrough in the economic cooperation between China and Pakistan and reflects China’s broader global engagement strategy.
With the primary objective of establishing a modern-day “New Silk Road,” CPEC has successfully laid the foundation for a secure and efficient trade route that connects China’s Xinjiang region to Pakistan’s Gwadar port. This transformative initiative, driven by mutual economic benefits, has facilitated greater regional integration between the two countries.
CPEC’s Role in Regional Connectivity and Energy Security for China and Pakistan
Over the past ten years, CPEC has played a significant role in strengthening China and Pakistan’s regional and global standing by enhancing regional connectivity through developing new trade routes, promoting development projects, and setting up Special Economic Zones.
CPEC has provided China with a direct maritime route to the Arabian Sea and the Indian Ocean, which grants it advantageous access to energy choke points in the Strait of Hormuz and the Persian Gulf through Gwadar and consolidates trade connectivity with the Middle East, Africa, and Europe, complementing its BRI initiative.
China imports 70-80% of its oil from the Middle East and Africa, mainly through the Malacca Strait, which carries risks of over-reliance on a single channel. The Malacca Strait, a narrow passage between Indonesia and Malaysia, is most vulnerable to disruption and blockade by the enemy to choke off critical supplies to the Chinese economy, which would pose a strategic dilemma for China’s energy security.
Whereas CPEC provides an alternative overland energy corridor for China, connecting Pakistan between China and the Middle East. At just 3,000 km, it is much shorter than the 12,000 km sea route via Malacca. By diversifying China’s import channels, CPEC reduces dependence on the Malacca route, enhancing China’s energy security. The corridor provides a strategic advantage by circumventing the Malacca choke point and bolstering China’s capability to ensure stable energy supplies.
CPEC also provides China access to the two most strategic locations in the Indo-Pacific region, the Indian Ocean and the South China Sea – the critical juncture for the QUAD alliance.
On the other hand, CPEC also contributes to Pakistan’s energy needs by exploring, extracting, and transporting untapped resources and establishing several energy and infrastructure projects, such as coal mines and power plants, to resolve chronic power deficits.
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The major Chinese investments in projects under CPEC will add thousands of megawatts of electricity capacity in Pakistan by 2025. This will be achieved by developing a diverse energy portfolio, including domestic coal, hydro-power dams, and wind farms.
Although fulfilling the country’s energy demands, the coal mine projects in Pakistan gave rise to significant apprehensions regarding the exacerbation of climate change issues due to the release of CO2, particularly in a nation already plagued by climate injustice.
However, in recent times, CPEC is increasingly transitioning into a green corridor by adopting renewable energy projects, including hydro, wind, and solar power, to help Pakistan reach its 30% clean energy target by 2030. Moreover, President Xi’s pledge to end China’s overseas coal financing also reinforces CPEC’s shift toward sustainable energy, mitigating climate change concerns.
Geopolitical Implications of CPEC’s Growing Regional Engagement
Though initially a bilateral project, CPEC has evolved to have broader geopolitical implications as the rising interest of regional countries in the corridor demonstrates a shift in the regional dynamics and balance of power in Asia.
Over the past decade, the interest of a large number of countries in CPEC has increased, especially those from the Middle East, Europe, and Asia, namely Iran, Saudi Arabia, and the United Arab Emirates, with Germany and the Central Asian states, demonstrating their willingness to engage actively in CPEC investment projects.
A Saudi Arabian company announced plans to construct an oil refinery in Gwadar worth $10 billion in 2018, whereas Dubai’s famous Brother Gas company also expressed plans to invest in 2021.
CPEC provides opportunities for landlocked Central Asian states to get access to the warm water port, the Arabian Sea. Moreover, it acts as a hub, connecting the regions of Central and South Asia to the Middle East and East Asia, providing the oil-rich Middle Eastern states with an opportunity to extend their global alliances and access major energy markets in East Asia.
Recently, China and Pakistan have also taken steps to broaden CPEC’s membership by including countries like Afghanistan and Turkey. It signifies the determination of China and Pakistan to promote regional connectivity, shared prosperity, and security cooperation. Integration of Afghanistan will help the war-torn country to become part of BRI, attract investments in energy and rail sectors, and facilitate its connectivity with the region along with European countries.
Moreover, Afghanistan’s membership will likely contribute to addressing the regional challenges of extremism and terrorism through capacity building in Afghanistan to combat terrorism to provide security guarantees to Chinese investors.
On the other hand, the involvement of Turkey will further strengthen regional connectivity as highlighted by Shehbaz Sharif during the launching ceremony of PNS Badr in Karachi.
Moreover, integrating Turkey into the corridor will likely strengthen Pakistan’s maritime activities at Gwadar Port, as the two countries are already engaged in enhancing maritime activities at Karachi Port and Port Qasim under the MILGEM project.
Complexities Surrounding CPEC: Competing Initiatives and Power Dynamics
Despite the remarkable upward trajectory in supporting the economic corridor, some countries continue to create hurdles to undermine the project and curb its activities.
Since the beginning of the initiative, the US has been using strong rhetoric against it, regarding it as a ‘debt trap’ for Pakistan, whereas India has criticized the project for passing through the contested region of Gilgit Baltistan and Kashmir; therefore, invoking insurgencies in Balochistan and supporting terrorist activities against Chinese workers to sabotage the project.
Moreover, China’s growing naval presence in the Indian Ocean through CPEC and joint naval activities with Pakistan raises concerns for India about potential disruptions of regional peace, challenges to Indian security and energy interests, and the possibility of the establishment of Chinese military bases in Gwadar in the future that would limit Indian influence in the region.
Furthermore, as CPEC and Gwadar Port have been perceived as a threat to some regional and global actors, some rival initiatives have been introduced to counter China’s regional dominance and curtail CPEC development.
Also Read: Pakistan commemorates 10th anniversary of CPEC
In this regard, Iran’s Chabahar port, mainly funded by India, has been viewed as a competitor to Gwadar. Developing Chabahar Port in Iran will provide the CARs with access to the Arabian Sea and a transit route to India and Afghanistan via Iran, bypassing Gwadar, which would undermine the significance of Gwadar Port in the region.
Though Iran and Pakistan have both expressed a positive attitude towards the development of these ports by regarding them as ‘sister ports’, they are leveraging two regional players and rival powers, namely China and India, which would likely turn the strategic Indian Ocean region into a whirlpool of competition rather than cooperation.
On the other hand, the US and other G7 members have spearheaded a B3W (Build Back Better World) initiative in 2021 that hints at countering China’s BRI project, of which CPEC is a part, to prevent the countries from the alleged ‘debt trap’ of China caused by lack of transparency and unfair deals.
But it is a matter of time to decide whether the nascent initiative can rival CPEC, which has progressed a lot and is based on principles of non-interference and lenient provisions contrary to its counterpart, which encompasses strict principles of transparency and environmental standards.
Furthermore, in a recent Joint Declaration by the US and India, the latter committed to becoming a hub for US naval repair and maintenance. US navies in the Indian Ocean around the China-leased Gwadar port sparks concerns regarding another power struggle in the Indo-Pacific region and demonstrates an effort to halt China’s presence in the IOR through Gwadar port.
Securing CPEC: Challenges, Threats, and Pakistan’s Security Measures
CPEC, a project with transformative potential, has not yet realized its full capabilities due to various obstacles emerging from a lack of trust and rising concerns among Pakistan’s local population, along with the sabotaging actions by some state and non-state actors.
The situation in the Gwadar project is marred with Baloch insurgencies due to their concerns about a shift in the demographic balance owing to the development of CPEC projects that would attract people from other provinces to Balochistan. Moreover, as the CPEC connects Gwadar to Xinjiang, the frequent clashes between the Uighur Muslims and Hans Chinese in Xinjiang province also pose a significant challenge to the project.
Terrorism has always been a major obstacle towards the progress of CPEC in Pakistan but with the revival of the Taliban government in Afghanistan, it is on the rise, largely targeting Chinese nationals and CPEC projects such as the bombing of Chinese workers in hydropower projects in 2021. The relevant case chart will continue to rise as the instability in Afghanistan increases.
In addition, the diverse terrains along the CPEC route, from rugged mountains and high-altitude regions to arid deserts and coastal areas, pose unique logistical and engineering challenges for infrastructure development, requiring careful planning, technical expertise, and significant investments. These geographical challenges affect CPEC security considerations, with remote and sparsely populated regions requiring effective security measures to prevent disruptions or threats to CPEC initiatives.
To curb the security threats and to ensure the success of infrastructural and CPEC projects, the government of Pakistan has implemented various measures, including deploying security forces, establishing dedicated protection units, and implementing surveillance systems along the CPEC route.
This includes the creation of specialized forces like Task Force-88 in 2013 and Maritime Security Force (MSF) in 2017, which ensures the safety of Gwadar port and other offshore infrastructures. The Special Security Division (SSD), consisting of 15,000 military personnel, was also deployed in 2017 to all four provinces along with Jammu and Kashmir to protect 34 CPEC-related projects in Pakistan.
In addition, the Pakistani Navy (PN) has taken further steps to enhance security measures for the China-Pakistan Economic Corridor (CPEC). This includes establishing a Coastal Security and Harbour Defence Force to address security threats along the coast. Furthermore, a Force Protection Battalion (FPB) established in 2016, comprising Pakistan Marines, has been stationed at Gwadar specifically to protect Chinese companies and workers.
In the maritime domain, they further established a Joint Maritime Information and Coordination Center (JMICC) and Coastal Watch Stations (CWSs) for monitoring and responding to potential threats.
In conclusion, certain key aspects must be considered to achieve positive future results from CPEC. Firstly, the disregard of the local Pakistani population towards the project must be handled with due care.
Additionally, the success of CPEC relies on proper domestic and international support. Collaborating with other countries, particularly those within the region, can generate broader support for CPEC and help materialize SCO members’ intentions to conduct trade in local currencies.
In multilateral forums such as the SCO, dialogue, cooperation, and coordination among member states can be encouraged, enhancing support for CPEC as a regional connectivity and support platform.
Moreover, CPEC has the potential to become a global trade transit route, facilitating trade and connectivity on a larger scale. Addressing the challenges faced by it over the past decade will help unlock its true potential, benefiting both China and Pakistan and contributing to regional integration and economic development in the broader Asian region.
*Haleema Sadia is the Managing Editor at The Diplomatic Insight; Maryam Ibrahim is a Research Intern at The Diplomatic Insight.
**The views expressed in this article are those of the authors and do not necessarily reflect the opinions of The Diplomatic Insight. The organization neither endorses nor assumes any responsibility for the content of this article.
