INTRODUCTION

In April 2015, President Xi Jinping visited Pakistan and announced the flagship project China Pakistan Economic Corridor (CPEC), a part of one belt one road initiative. The corridor offers long term investments in Pakistan and it will also involve other countries as well. Moreover, it envisages, boosting up the trade activities in the region. The multi-billion project aims at infrastructural development, energy projects, rail and road links and to establish exclusive economic zone to facilitate the smooth flow of trade and investment. President Xi announced the New Asian Security Concept and stated that “One cannot live in the 21st century with the outdated thinking from the age of Cold War and Zero sum game. We believe it is necessary to advocate common, comprehensive, cooperative and sustainable security in Asia. We need to innovate our security concept establish a new regional security cooperation architecture, and jointly build road for security of Asia that is shared by and win-win to all” (Callahan, 2016).

Despite of the security risks and internal security challenges, China decided to invest billions of dollars in Pakistan, because China has its global strategic objectives in the region. Likewise, China is building strong hold in the region to acquire leading role in the Asia and Beyond by economic and political cooperation. In this regard, Pakistan’s geostrategic location that connects many sub-regions with each other will be utilized to link China with energy rich regions .China’s quest to reach energy rich regions have paved the way for mutual understanding to form strategic partnership in order to transform the region into hub of economic activities. However, the CPEC offers many internal and external challenges. The internal challenges include, controversies over route among different provinces, security of the project and external opposition are major source of concern for the leaderships and governments of the two countries. The project is Chinese biggest overseas investment ever. The rail and road routes would connect China’s Xinjiang province with Gwader port up to 2030. According to the ministry of planning and development, CPEC will serve as a gateway for trade for countries of entire region and beyond. It is interesting to note that, CPEC has added a new dimension to Pak-China strategic cooperation as until CPEC the economic cooperation between China and Pakistan was relatively low. However, the post CPEC partnership has evolved as much broader, dynamic and long lasting.

For Pakistan, CPEC is source of peace and stability because it will encourage connectivity through trade and investments, not only for China and Pakistan but for whole region. Therefore, CPEC is not only a game changer but fate changer for Pakistan, said former federal minister of Planning and Development Ahsan Iqbal. The project has been seen as a milestone by many analysts as they foresee the Chinese investments would be making Pakistan next Asian tiger (Ahmed, 2017). However, the challenges to the successful implementation of this flagship project are enormous. In order to assure the success of the Pak-China Economic corridor Pakistan army has taken the responsibility of the security guarantee and parliamentary committee to oversee the fast track development of the project (Hussain, 2016). The CPEC is a bilateral project between Pakistan and China but it’s a part of Belt and Road intuitive that aims to connect more than 65 countries with each other. Over CPEC project India and United States have raised their worries and that is not a good sign for the successful implementation of this ambitious project. However, China and Pakistan have increased their cooperation to implement the CPEC.

Theoretical Context: The world is witnessing the new wave of multi polarity, which has changed the dynamics of interactions between the States that is largely dominated by the economic interests. Therefore, it is the geo-economic that has taken over the geopolitics. The economic interaction among states is increasingly interlinked. Moreover, in the global economic activity there exists an ongoing shift from developed to developing world. In the current global political environment, States are engaged in the race of economic competition some are still in the process of development. The new phase of economic interaction is largely dominated by the policies of powerful states to explore and exploit the geographies that are rich in the natural resources. Moreover, the alliances formed on the basis of geopolitics are not that much steady as compared to alliances formed on the pretext of the geo-economics. The triangle of Pak-US and China best explains the nature of such alliances. The imbalance nature of Pak-US relations and steady nature of Pak-China relations is perhaps the suitable example of importance of geo-economics over geopolitics. Thus, CPEC is going to re-shape the geo-economics of the region. It will attract other countries as well that will increase trade and investment which will promote connectivity. China is fastest emerging economy in the world and that is considered as a potential security threat by the most of western countries, particularly by United States. The rapid economic growth of China will increase its power and influence throughout Asia.

CHINA-PAKISTAN ECONOMIC CORRIDOR CPEC: OPPORTUNITIES FOR PAKISTAN

The Pak-China relations have witnessed an upward trajectory with the visible economic cooperation after the announcement of CPEC project. The CPEC has emerged as a hope for Pakistan to sustain its economic growth. Moreover, the CPEC would be important for Pakistan in multiple dimensions. First, it will offer an opportunity to recover economic prosperity and also would turn Pakistan into economic hub. CPEC will elevate Pakistan’s strategic significance in the rapidly changing international order. China would be more beneficial for Pakistan as compared to United States patron client partnership with the latter. While many countries are worried about China’s rise and see it as a potential security threat, Pakistan sees it as an opportunity to balance her deteriorated relations with US and her regional allies such as India. Furthermore, the increased anti-American sentiment in Pakistan has made it very difficult for policy makers to justify its overtures to Washington, whereas, China is seen as a reliable partner and that will be easy for the leadership to sell all weather partnership domestically. The economic corridor is the cornerstone of twenty first century maritime Silk Road. It is intended for the promotion of regional and extra-regional connectivity through facilitating the trade and investment by constructing rail, road and maritime routes of transportation. Keeping in view the South Asia’s economic underdevelopment, conflicts and regional instability, CPEC can become source of peaceful cooperation and mutual understanding over the trade. Pakistan would be the hub of economic activities due to strategic location. However, the security challenges emanating from internal sides are the biggest hindrance in the successful implementation of the corridor. To concretize the idea, the legal framework was developed. The economic corridor aims to bolster the trade and commerce between China and Pakistan. Fifty one memorandum of understanding were signed in April 2015 during Chinese president’s visit to Pakistan. The leaderships of two countries showed their full commitments for the rapid development to make Gawader port a note worthy deep-sea port in the region fully operational. The Gawader was given to Chinese State owned enterprise in 2013. The port is vital to China because it lessens the distance that Middle Eastern Oil supplies takes to reach Chinese port by 12,400 km. The corridor will be beneficial for Pakistan because it will make latter the transit hub of economic activity in the region (Iqbal, 2017).

In addition to that, Pakistan is facing chronic energy crisis over the years. CPEC would help come out of the energy scarcity. Under CPEC China’s main primary focus would be the energy sector of Pakistan. In this regard, 61 percent of the total investments have been specifically allocated at energy infrastructure development. Moreover, the capacity enhancement, distribution and transmission networks have been the important energy projects under CPEC. The energy shortage has been the biggest problem and major hurdle in quest of development in Pakistan, but that will be overcome under the CPEC. The energy projects are likely to add 17,045 MW energy to the national grid of Pakistan by 2020 making Pakistan self sufficient in the energy sector. Once completed successfully, CPEC would provide an opportunity for Pakistan to generate massive foreign direct investment. Additionally, the construction of road and rail networks along with development in infrastructure and energy sector, Pakistan would likely become economic powerhouse in the post CPEC period. Ultimately, Pakistan may attract its immediate neighbors and other regional states to use the transit route and diversify their economic ventures in other regions. Thus, for Pakistan CPEC is going to become game changer. As Pakistan battles with terrorism, extremism, corruption and most importantly the energy shortage that has led to the wobbly economic performance, CPEC would result into the fortunate project for Pakistan to come out of crisis and also to elevate its strategic partnership with its friendly neighbor China. Thus, Pakistan is understandably pleased with CPEC.

CHINA-PAKISTAN ECONOMIC CORRIDOR CPEC: IMPORTANCE FOR CHINA

China is the most populous country in the world that has been rapidly growing its economy. It has been able to get the status of global power and have been seen as a potential security threat by West. In the quest for economic development China needs to connect itself to energy rich regions. Therefore, China Pakistan Economic Corridor is vital to Chinese strategic objectives in the region. Moreover, the economic giant of the twenty first century enjoys extraordinary relationship with Islamabad since its independence. The significance of CPEC for China is evident in the fact that despite Pakistan’s vulnerable security conditions and internal and external threats, China agreed to invest billions of dollars to make CPEC a reality. Moreover, there are multiple factors which compelled China to build corridor even at the security risks. CPEC would connect China with Europe and Asia (Shahzad, 2017). For China as well, CPEC would be a game changer, mainly due to economic and strategic perspective. Firstly, the Gawadar port provides an alternate source and safest route if anything happens at Strait of Malacca or South China Sea, it provides smooth access to China in the Arabian Sea. Moreover, the economic corridor would reduce 12,000 kilometer distance in the 3000 kilometers enabling China’s direct access in the Indian Ocean for trade cargo and circumventing Malacca. The Gwadar was operationalized on 13th November 2016 with first pilot cargo dispatched (Iqbal, 2017). Many hope that, CPEC would be equally beneficial for two countries and will likely result in win-win situation. However, China would be greatest beneficiary since it will save billions of dollars by creation of shorter route for energy imports from Middle East. CPEC would be useful to boost not only the domestic economy of China but it will likely enhance its geopolitical clout and regional peace and stability. Analyst Andrew Small has noted in his book: China Pakistan axis: Asia’s New Geopolitics that security risks in Pakistan haven’t changed much and that can derail the project but despite of that China has extended its economic cooperation to latter and is motivated partly by trying to stabilize Pakistan (Spearhead Research, 2017).

Significance of Gawadar Port: In the new millennium, maritime security has got the momentum throughout the world. The process of globalization has encouraged the interdependence with greater economic growth by trading with complementary products and resources (Inayat, 2016) Thus, in the current International security environment which is mainly dominated by geo-economics, importance of ports cannot be overlooked. Thus, Gawader port has not only been vital to China and Pakistan’s economic interests but as well as for regional development as a whole. Gawader is a deep sea warm water port located at apex of the Arabian Sea. Strategically, Gawadar is located between South Asia, Central Asia and West Asia, just outside strait of Hurmouz and at the mouth of Persian Gulf. The location of Gwader at the juncture of multiple regions would serve as a regional hub of economic activity. The port is a symbol of Pak-China enduring strategic partnership that exists between the two countries. It will give direct access from China to Arabian Sea connecting with Strait of Malacca. The port will also enable China to reach Middle East and take advantages of rich minerals. Further, it will allow China to keep an eye on the US naval activities in the Persian Gulf as well as the Indian naval activities in the Arabian Sea (Naseem, 2014). It will enable China to monitor shipping moments in the Gulf region. Moreover, the Indo-US nexus would be counterbalanced with the similar strategic and naval cooperation between China and Pakistan (Bukhari, 2011).

There is no denying fact that Gwadar would open up new economic opportunities for Chinese investment in Pakistan and it will help China to access the gulf countries with shortest route. Thus, Gawadar is a symbol of Pak-China strategic partnership that has evolved in multi-dimensional nature. Pak-China economic cooperation now covers all the components such as energy infrastructure, transportation and Industry. Gwadar’s location at the mouth of Persian Gulf enhances its strategic value and its development would favorably influence the geostrategic environment of the region. Therefore, both China and Pakistan would enjoy the beneficial impact of the port. Beijing is intended to access Central Asia via Gwadar’s available international trade routes. Thus, Gwadar is pivotal part of China Pakistan Economic Corridor. The development of the port was divided into two parts, whereas first phase has been completed and second phase has been started. Once the developmental phase is completed and Gwader would be fully operational it is expected to play significant role in Pakistan’s trade and cargo activities in the future. Gwader would contribute brining Pakistan much needed income because of its location near Strait of Hormuz where 40% of World’s oil passes. Likewise, Pakistan is going to become transit hub once the road and rail links are completed to link South Asia, Central Asia and Middle East. For China, Gawadar would serve as cheapest route of energy supply to China because most of the Chinese shipments come through Strait of Malacca, which is not safe and at the same time it is costly because of long distance. Therefore, Gwadar would significantly reduce the distance. Moreover, China can easily provide its goods to Middle East region from its western Part specially Xinjiang, where it has established major economic zones (Chaturvedy, 2017). Not only for China and Pakistan, Gawadar holds huge potential of transforming the economic condition of entire region (Khetran, 2015). Therefore, China Pakistan Economic Corridor (CPEC) would be a flagship project and it will connect Gwader and Kashgar through, rail, road and pipelines. This will lead to impetus in the regional trade and help boost up economic activities.

ECONOMIC OPPORTUNITIES

CPEC offers multifaceted and multidimensional opportunities, first of which is economic development that will mutually benefit the two countries. Moreover, due to the regional security environment that has prevailed since the 9/11, Pakistan has been hampering in economic growth. The multi-billion Chinese project would encourage large influx of investments in Pakistan that would help Pakistan’s economic growth and development with the financial activities and commercial attractiveness. Moreover, the economic rise of China is seen as a factor of economic prosperity for Pakistan in future. The economic standing of the two countries is totally different from each other China the leading growing economy and Pakistan struggling to gain economic growth are cooperating with each other. The number of factors have been involved which attributes weak economy of Pakistan. Currently, Pakistan’s economy is in vulnerable position and has been heavily indebted by the international funds. According to the International Monetary Fund (IMF), Pakistan’s gross product growth had only an average of 3% and in year 2015 it had shown very little progress with 4.4% that was even less than Srilanka and Bangladesh who have moved ahead of it. The reason behind the slow economic growth is mainly due to the Pakistan’s involvement in the war against terrorism. The increasing terrorism and militancy resulted into major setback to Pakistan’s economic progress. Moreover, the operations in Swat and Waziristan and stifling situation in Karachi caused blowback to the foreign investments in Pakistan. Although Pakistan is rich in natural resources and possesses great potential to bring economic stability but due to internal displacements, fight against terrorism and extremism and lack of grip over its trade policies Pakistan’s performance in economic aspect has been very disappointing.

On the contrary, China has managed to its economic policies so well that it has turned out to be the rising economic giant with tremendous potential of becoming superpower. Currently, China is largest trading partner of most of the world’s major power economies and that has enabled it as fastest growing economy of the world. Moreover, the World Bank report suggests that China has outnumbered many of the European countries in terms of adopting valuable economic strategies and reducing poverty ratio (Hussain, 2016). The ever growing nature of Chinese economy needs it to connect with other parts of the world. In this regard, the geostrategic location of Pakistan would be keys to Chinese broader objectives in the region. Similarly, Pakistan needs China to achieve economic development and progress. Thus, both countries knew and still know the respective advantages of Pak-China strategic partnership.

Energy: No country can develop without fulfillment of energy needs as it is considered as a life line of the economy of any country. Moreover, it is a vibrant instrument of economic growth. Unfortunately, Pakistan has been going through severe energy crisis since many decades. Therefore, realizing the growing energy needs in Pakistan, China as allocated major portion of funds under CPEC projects to generate energy and transmission. Therefore, CPEC would help Pakistan not only to come out of the energy crisis but would produce surplus electricity to benefit the country. The required availability of energy would revive Pakistan’s economy with increase in overall GDP growth (Abid and Ashfaq A., 2015). China has been working on the development of multiple energy projects, from coal, wind, solar and hydel throughout Pakistan. Under CPEC, 17,045 MW of energy would be generated through early harvest prioritized energy program. China has allocated $37 billion dollars for energy projects which are particularly pertinent for Pakistan. For China, CPEC has potential to diversify energy trade routes to various regions including Middle East. The energy routes to connect Central Asia are another important objective of China, because it will reduce its dependence on its oil imports through Indian Ocean and South China Sea, where US has strong naval bases. In this regard, China is developing alternate route if any blockade occurs in case of confrontation between the two major powers at Strait of Malacca. These projects are manifestation of China’s rise. Additionally the new routes of transportation would encourage flow of trade and interdependencies that would be bearer of China’s influence in the Central, South-West and South Asia regions (Ritzinger, 2015).

Despite of many opportunities it offers CPEC offers challenges as well. Owing to the magnitude of CPEC, the project faces multidimensional challenges. First, the implementation challenges, secondly, the domestic challenges which are largely dominated by security risks and lake of consensus over routes and third set of Challenges comes from external threats including Indian and US reservations.

Implementation Challenges to CPEC: The implementation challenge is associated with the question of timeframe and speed of the project. The delay in the implementation could lead to many problems and the project might get derailed by some of the actors who are against this project. The projected time frame for the completion of the CPEC has been set from 2018-2030. However, the actual implementation of the project started with delays due to the political tussle and lake of consensus among the provinces. Meanwhile, both sides emphasized upon the need of earliest start of the project due to its immense importance. It owes much to the international competition over this trade route and need of expansion towards energy rich regions like Central Asia. Another challenge includes the question of the allocation of massive amount of budget and at what level transparency would be ensured. Many of the technical nature problems are still unanswered. For the time being, politicians, analysts, and other experts have not been vocal regarding these challenges. The cost and benefit analysis of the CPEC is very important to identify the actual cost and overall benefit. The proposed project would be costly or beneficial is yet to be seen. Meanwhile, many analysts have projected the cost and benefit of the project as equally beneficial and game changer for two countries. Therefore, if the costs are higher than the benefits, there will be obstacles in the successful implementation of the project. This may result into severe setback for the project and will not have positive impact on the Pak-China bilateral relations. The construction of rail links, roads and pipelines in a smooth manner is one of the serious challenges to ensure the timely implementation. As these are the massive projects any problem can derail the project. Therefore, it is important to recognize the challenges and solve the prominent threats to CPEC, otherwise, there will be many loopholes and those will be exploited by the non-State actors especially by external powers (Hussain, 2016).

Domestic Challenges to CPEC: Keeping in view the domestic situation of Pakistan that is very staggering and prone to security challenges, makes the CPEC vulnerable. The domestic challenges include security concerns as the announced project face hurdles within Pakistan because of latter’s own deteriorated security environment. Therefore, security of the project remains crucial for both China and Pakistan. As CPEC aims to connect Gwadar with Kashagr, security risks are higher in the Baluchistan and western part of China’s Xianjiang province. Thus; China and Pakistan have been concerned about the security of the project and trying to meet this most critical challenge. The terrorists groups on the both sides have been trying to derail the project. Those groups include East Turkestan Islamic Movement (ETIM), Baluchistan Liberation Front (BLF) and other militant wings of political parties, Tehreek-e-Talban Pakistan (TTP) Lashkar-e-Tayyiba, Lashkar-e-Jhangvi and Daish (ISS) have been trying to stop this mega project. Moreover, the international forces were also supporting and funding these groups to create hurdles in the implementation of the CPCE. There have been reports that, security threats from Afghanistan are emanating where groups like Al-Qaeda, Islamic State (IS), and Tehreek-e-Talban Afghanistan, Movement of Islamic Uzbekistan and Movement of Turkmenistan Islamic Party are also concentrated. These groups have been targeting Chinese companies working under CPEC; also, the Chinese workers have been kidnapped and killed in many parts of the country. Therefore, to ensure the security of the Chinese workers Pakistan has established a special security task force for CPCE. The security force is comprised of nine army battalion and six wings of paramilitary forces, the rangers and Frontier Force Corps (Riaz and Mi, 2017). The lack of consensus over route and reservations by underdeveloped Western provinces especially by Khyber Pukhtoonkhwa and Baluchistan sparked protests from the local leaders caused delay in the process of implementation of the project. Moreover, Pakistan has been one of the biggest victims of terrorism and extremism. Thus, militant groups within its provinces have been creating obstacles in the smooth development of the CPEC. The Baluchistan is the largest province in terms of area, bur rich in natural resources. However, it is least developed and dominated by tribal society. PILDAT working paper identified that, the literacy rate of Baluchistan stands 51.5% and that needs to be addressed on priority bases. Its GDP per capita income remained lowest among all other provinces of the country. Hence, the militancy driven Balochistan has a potential threat to derail the CPEC. The dissents of Balochistan are afraid that CPEC would not benefit to them but it will deprive their due rights. Meanwhile, the Baloch nationalist leaders have also been opposing the CPEC (Riaz and Mi, 2017). Likewise, corruption and political instability have remained the biggest problems in the country’s development. Therefore, the fractured political environment is main obstacle that can disturb the successful implementation of the project. Along with internal challenges, CPEC has been faced with external challenges too. As China is rapidly growing economy, it is therefore attempted to contain at regional and international levels.

U.S. OPPOSITION TO CPEC

The mega project CPEC is aimed to promote not only Pak-China economic cooperation but regional economic connectivity. Thus, the proposed plan, in which China has invested billions of dollars, clearly has implications for US policy makers. Additionally, the US has been trying to contain China, particularly viewed in the light of Beijing’s apparent long term strategic interests in the region and beyond. Secondly, US formed strategic alliance with India to counter China’s rise. Similarly, India also is unhappy with the CPEC because it will be ultimately beneficial for Pakistan. Moreover, US wants to see India as a global player, and believes that latter can play anchoring role for regional peace and stability. Additionally, behind this pro-Indian US approach there are other three main reasons. First, it serves as balancer against China’s rise. Second, India would be lending helping hand in Afghanistan, and third, it will be used in keeping check on Pakistan (Khan, 2017). In this regard any type of such project would lead to strategic balance in the China’s favor and that will not be in the interests of United States. Understandably, India won’t allow its traditional rival Pakistan and its competitor China to emerge as strong bloc against its hegemony in the region. Moreover, in order to appease India, former US defense secretary while testifying before the senate state armed services committee said that: “The ‘One Belt, One Road’ also goes through [a] disputed territory, and I think that in itself shows the vulnerability of trying to establish that sort of a dictate,” (Dawn, 7th October, 2017).

Moreover, China has taken new and active role in the South Asia region. China’s billion dollars investment are driven purely by desire of economic integration that would mutually benefit the two countries without undermining the interest of other regional States. However, the Chinese initiative has also been carefully drafted to exert and enhance its own power projection in the region. Ultimately, its aim would be to challenge United States in Asia and on the world stage. In this regard, China’s major interest in Pakistan is Gwadar Port, which would help former to get foothold in the Arabian Sea. The rail, road and pipelines would help China to escape it Malacca dilemma by providing new over-land routes connecting energy rich Persian Gulf directly with China’s Western provinces (Markey, 2017).

INDIAN OPPOSITION TO CPEC

The regional security environment of South Asia is largely shaped by Indo-Pak relations and their traditional rivalries. Thus, emergence of one of them as regional power would mean to be destabilizing factor for the entire region (Bukhari, 2011). Therefore, CPEC, the multibillion projects has raised apprehensions in the neighboring India. Moreover, India has many reservations about this ambitious project and Indian Prime Minster called it unacceptable (Shah, 2017). The Indian hostility against CPCE is driven out of the facts that it is feared about China’s growing influencing in the Indian Ocean and secondly, the proposed project may lead to internationalization of Kashmir dispute which is the principal irritant for New Delhi.

Moreover, India feels concerned that, CPEC would shift the regional balance of power in the China’s favor (Spri Report). Therefore, India would not allow China’s encroachment in the areas which are considered by the former as its own traditional sphere of influence. In addition, India also fears that Pakistan backed by China would be emboldened to peruse anti-India tactics by cross border attacks and also by militant proxies (Markey, 2017). So far, India’s official reaction to the CPEC has remained negative.

AFGHAN CONCERN

The Afghan concern can be explained into two perspectives. Initially the Kabul government was interested to join CPEC, In October 2016, Afghanistan’s ambassador to Pakistan, Dr.Omar Zakhilwal, emphasized his country’s interest in joining CPEC and stressed that a development project of this scale would be beneficial not only to Pakistan but also for the entire region. But due to Indian influence it has remained reluctant. Secondly, the security problem in Afghanistan will have impact on security and stability of Pakistan. Therefore, China has been trying to bring Talban on the negotiation table. The China and Pakistan both are worried about the instability in Afghanistan because it will ultimately affect the implementation of the CPEC project. Meanwhile, Afghanistan has been facing devastating situation since the country has been invaded after 9/11. Thus, in order to develop economically CPEC would be useful tool for the country. Likewise, Pakistan would be able to reach to energy rich Central Asia through Afghanistan. Thus, Afghanistan would be important factor for China’s ambitions to reach out to energy rich CARs for its successful culmination of its One Belt One Road policy.

CONCLUSION

CPEC has brought positive addition in China Pakistan multifaceted partnership. It will forge a deeper relationship between the two countries. The Economic corridor is futuristic in nature but if timely implemented it will foster socio-economic development in Pakistan. Likewise, China’s interests would be served through CPEC not only in region but beyond as well because it will pave the way for regional connectivity and interaction among various regions such as South, Central and East Asia. The huge Chinese investment is likely to attract other countries as well. Thus, CPEC would not only become game changer for Pakistan and China but entire region would benefit from it. However, there are various challenges to successful implement the project which needs to be addressed but opportunities are massive. In this regard, Pakistan and China will have to actively work together to ensure the successful implementation of the mega project.

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