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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.
- 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.
- 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.
- For China:
- 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.
- Laxity:
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.
- Increase in China’s Activities in IOR:
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.
Daily Mains Question [Q] What are the challenges faced by China-Pakistan Economic Corridor (CPEC)? What are India’s concerns regarding the project? How can India effectively deal with the CPEC challenge? |
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