CPEC’s Extension to Afghanistan

In Context

• Following a recent meeting in Islamabad, China & Pakistan agreed to extend the China-Pakistan Economic Corridor (CPEC) to Afghanistan.
  • The move comes in spite of opposition from India on issues of sovereignty and territorial integrity.

China-Pakistan Economic Corridor (CPEC) 

• About:
  • The CPEC is a collection of infrastructure projects that have been under construction throughout Pakistan beginning 2013. 
  • The initiative is planned to be completed by 2049.
  • The CPEC is part of China’s larger Belt and Road Initiative, which aims to spread Chinese investments in trade and connectivity infrastructure to bring Central Asian and European markets closer.
• Details: 
  • The CPEC is a 3,000 km route of infrastructure projects that seek to create a series of contiguous economic and trade hubs with road and rail infrastructure.
    • It will link places like China’s restive western province of Xinjiang Uyghur Autonomous Region and the new Gwadar port in Pakistan’s equally unquiet Balochistan state.
• Funding:
  • Originally valued at $47 billion, the value of CPEC projects bumped up to $62 billion as of 2020. 
• Mutual Benefit for China and Pakistan: 
  • For China:
    • For China, the project will bypass the Strait of Malacca, which can be a choke point in case of a conflict with the US or other adversaries. 
  • For Pakistan:
    • On the other hand, Pakistan expects CPEC to be a lifeline for its deteriorating economy, leading to a multiplier effect on production and employment generation and sustainable economic growth. 
    • The move is expected to pave way for investment of billions of dollars for infrastracture projects in the country which is hit by sanctions and is facing an economic crisis.
• Challenges for the Project:
  • Laxity:
    • The project is behind schedule and only three of the total 15 projects announced have been completed so far.
  • China’s debt trap policy:
    • Critics also foresee that the weak economic indicators of Pakistan might lead to a possibility of the country defaulting on debt repayments, as Chinese loans have high interest rates.
  • Safety & security of Chinese citizens:
    • China has voiced its concerns to Pakistan over the safety and security of Chinese citizens working on various CPEC projects. 
    • The number of incidents targeting Chinese citizens in Pakistan has been worrying to Beijing. 

India’s Concerns

• Violation of Indian Sovereignty: 
  • The project violates the sovereignty of India as it passes through Pakistan-occupied Kashmir (PoK), which is a disputed territory between India and Pakistan. 
  • As per well-established international conventions, no construction is allowed in any disputed territory, without taking the other country into confidence.
• Exploitation of Natural Resources: 
  • Under CPEC, China plans to build two mega-dams on the Indus, named Bunji Dam and Bhasha Dam. 
  • This will put a heavy strain on the Indus Water Basin.
• Security Concerns for India: 
  • Increase in China’s Activities in IOR: 
    • With Gwadar being a part of CPEC, India fears an escalation of PLA Navy activities in the Indian Ocean Region (IOR). 
  • Threat to Indian Trade and Connectivity: 
    • Majority of Indian tangible imports pass through the Strait of Hormuz. 
    • China can easily create impediments to its access to the Middle-east in case of a conflict, jeopardizing India’s energy security.
  • Enhanced threat from Pakistan: 
    • With the overhauling of the Karakoram Highway, Pakistan will enjoy an advantage in mobilizing troops as well as heavy military equipment to PoK. 
    • At the same time, an increase in financial returns to Pakistan through CPEC may expand its ability to fund military infrastructure as well as state-sponsored terrorism in Kashmir, thus destabilizing the region.

Suggestions for India

• Maintain Communication: 
  • Experts have advocated that India maintain communication and cordial relations with its neighbors. 
  • In such a context, India has done well to keep participating in forums like Shanghai Cooperation Organization to maintain communication with both Pakistan and China.
• International Collaboration: 
  • It is well settled that India cannot compete with China in the matter of financing developmental projects like CPEC in other developing countries. 
  • Therefore, it needs to collaborate with agencies like Japan International Cooperation Agency (JICA) to offer soft loans to save them from falling into the Chinese debt trap.
• Maintaining Security: 
  • Developing countries, especially the countries of Southeast Asia have pinned their hopes on India to counter China’s hegemony in the region. 
  • Here, India needs to build on alliances like Quad to maintain the balance of power in the Indo-pacific region.

Way ahead

• While the Indian position remains unchanged, China and Pakistan are keen to invite third parties into the CPEC, highlighting China’s insensitivities to India’s concerns.
• Connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency, and equality, and must be pursued in a manner that respects sovereignty and territorial integrity.