Understanding Belt and Road initiative & CPEC Project in Actual By Imran Hanif

Introduction: China is presently undertaking what it considers to be the largest project of the century by building a network of railroads and shipping lanes linking itself with approx. 65 countries across Asia, Africa, Europe, and Oceania. The main focuses of the "Belt and Road" initiative - also known as "One Belt, One Road" are in infrastructure, transportation, and energy. From a strategic viewpoint, the corridor will bring unlimited benefits to China; as after completion, it will expand the number of trade routes between China and other regional countries. China imports 60 percent of its oil from the Middle East and 80 percent of that is transported to China through the long, expensive, and dangerous piracy-rife maritime Malacca Strait route through the South China, East China, and Yellow Seas. At present, transportation of energy through the Strait of Malacca takes around 45 days, which could be easily shortened to less than 14 days if done via Gwadar port as it provides the best possible land and sea routes for this purpose. Thus Gwadar-Xingjian route can serve as an alternative to the Malacca straits for the transportation of energy which will be time and cost effective. It will also enable China to import energy and find new markets for its products in Central Asia, Africa, and Middle East.

To understands China-Pakistan Economic Corridor (CPEC) which is said to be a game changer in the region one must understands broadly about the whole concept of this Mega project by China. Striking aspects are as under:

1.     “Belt and Road" is a massive trade and infrastructure project that aims to link China — physically and financially to dozens of economies across Asia, Europe, Africa, and Oceania.

2.     It consists of two parts: The "Belt," which recreates an old Silk Road land route, and the "Road," which is not actually a road, but a route through various oceans.

3.     The Silk Road was an ancient land route across Europe and Asia that connected traders and travellers from regions like the China, Persia, and the Roman Empire.

4.     Merchants used to transport silk and other commodities by camel or horse along those roads.

5.     China has invested at least $900 billion (￡635 billion) in projects along the belt and road, mainly in infrastructure, transport, and energy. These include a gas pipeline in Pakistan, a motorway in Hungary, and a high-speed rail link in Thailand.

6.     Numbers tell around 200 billion cubic meters of natural gas has been piped from Central Asia to China through a network of pipelines since December 2009. The project, which will further develop under the Belt and Road Initiative, benefits over 300 million Chinese and creates nearly 10,000 jobs in Central Asia. 

7.     Countries that haven't joined Belt and Road have also profited from the mega-project — western multinationals like General Electric and Caterpillar in the US, and DHL in Germany, have all signed trade agreements to build Belt and Road projects.

8.     War-torn Syria and Yemen have also signed up to be part of Belt and Road. Last November 2017, Chinese Foreign Minister Wang Yi gave China's support to Syria's reconstruction.

9.     Britain isn't part of Belt and Road, and its stance is unclear. Prior to her trip to China, UK Prime Minister Theresa May refused to formally endorse the project, and said it would only contribute to global growth if it was "well implemented".

10. while Chancellor Philip Hammond has appeared keen for Britain to join Belt and Road. Speaking in China last December, he expressed his wish for "closer collaboration in delivering the ambitions of the Belt and Road programme."

11. The US isn't a part of Belt and Road, but formally recognised it in a statement last May following the signing of a bilateral trade deal.

12. Belt and Road also has its critics. Although India is part of the programme, it opposes China's investment in an economic corridor linking it to Pakistan because it passes through Kashmir, a contested territory between the two countries.

13. Other countries say Belt and Road is actually a series of exclusive bilateral deals between China and other economies, but is touted as a multilateral project. If true, this would violate EU standards.

14. China's ambitions appear to go even beyond Asia, Europe, Africa, and Oceania. Last quarter of year 2017, the country announced plans for a "Polar Silk Road," which aims to build infrastructure and explore shipping routes across the Arctic.

15. In 2016, China also established the Asian Infrastructure Investment Bank, an international development bank to help build infrastructure in region — almost like the Asia-Pacific equivalent of the IMF. The UK, Germany, and France all joined despite the Obama administration warning its allies not to.

16. As Britain prepares to leave the European Union in 6 months' time, it's pretty clear that landing big trade deals with the world's superpowers is a top priority.

17. While EU officials have warned the UK not to negotiate any bilateral trade agreements outside the EU until after March 29, 2019, Theresa May's government has embarked on various international tours in a bid to lay foundations for future deals.

18. One country that the UK will want to count, in particular is China. It has invested some $14 billion (￡10.8 billion) in the UK since the start of 2016, according to the American Enterprise Institute and Heritage Foundation.

19. The 30 best-performing Chinese companies in the UK alone yielded a total of ￡9.8 billion in revenue and employed over 20,000 people in Britain in 2015, research firm Grant Thornton reported. 

20. Britain has also appeared keen to join China's "One Belt One Road" initiative, which aims to link some 65 countries across Africa, Asia and Europe through trade and infrastructure.

China –Pakistan Economic Corridor (CPEC) & Its Impact on Pakistan

Overview: In 2015 CPEC was inaugurated as a 46 billion dollar Chinese investment project in Pakistan under its One Belt One Road (OBOR) initiative to seek connectivity with its western region of Xinxiang to the southern Pakistan port of Gwadar, a lot of change has taken place in terms of Beijing’s role to modernize infrastructure and improve the energy production of Pakistan. While the Chinese investment has gone up to 58 billion dollars under CPEC, the construction of economic zones in different provinces of Pakistan is termed as a landmark in boosting the country’s economy and enhance its Gross Domestic Product (GDP). CPEC would be running through one of the most essential geostrategic locations in South Asia. It shall mainly act as a trade bridge between China, the Middle East, and Europe through Pakistan and will generate thousands of jobs and revenue worth billions for both countries. The corridor will connect Kashgar China’s north western autonomous region of Xinjiang, to Pakistan’s Southern port of Gwadar in Baluchistan by a crisscrossed network of railways, highways, airports, and energy pipelines for trade and tourism purposes. This will be the longest land corridor, which will run approximately 2800 km from Kashgar to Gwadar, expected to be fully operational by 2030. CPEC will also help China to counter US influence in Asia. In view of President Obama’s 2012 regional strategy, Pivot to East Asia strategy, which stresses on “strengthening bilateral security alliances; deepening working relationships with emerging powers, including China; engaging with regional multilateral institutions; expanding trade and investment; forging a broad-based military presence; and advancing democracy and human rights,”. Chinese policy makers are pretty conscious and consider it as a part of US policy to contain and confine the military power and economic expansion of China. “Proponents of this theory in China’s ruling circle believe that United States needs a militarily, economically, and socially weak and divided China so that US can continue its martial hegemony in Asia and Africa.” Thus in the view of foregoing, the corridor signifies an attempt by China to prevent the US from expanding its influence in Southeast Asia and thus bears enormous implication in the perspective of Sino-US strategic rivalry in Southeast Asia and Pakistan being main battleground. Pakistan needs to have a clear cut policy on relationship with USA vs China because sailing on two boats won’t help at all. Following are the realities as regards to CPEC project which needs understanding & contemplation.

Economic Stability of Pakistan: For a state like Pakistan, which faces stark economic and political challenges, CPEC can prove to be a golden opportunity which will provide a big opportunity to stabilize its economy while refining relations with its neighbours and by making Gwadar a trade and economic hub of the region. For an unstable economy like Pakistan, the corridor will offer a remedy to its problems and will open new horizons of development by improving socio-economic conditions of the people and by uplifting their quality of life. Many Special Economic Zones are conceived to be established in Punjab, Gilgit-Baltistan, KPK, Baluchistan, and Sindh. This will eventually bring prosperity with the investment from the potential international investors and will help Pakistan drive its economic growth. One glaring fact remains that more emphasis is given on roads development projects under CPEC but still no concrete steps towards construction of rail links with China. Fact of the matter is that transportation of goods via road link vis a vis rail link needs to be catered for because rail option would be much cheaper as compared to road transportation. There is no point if goods take longer time period and more money spent via roads. Poor planning and not properly implanting Special Economic Zones on ground in true letter and spirit can also jeopardise long time economic goals for Pakistan.

Monitoring of CPEC projects: In last five years 2013-18 government of Pakistan under Mr Sharif has doubled Country debt which is itself a record. If CPEC with its 46 Billion dollars investment is considered a game changer in the region then last government borrowed approx. 35 billion dollars and no game has yet been changed so far which is a matter of great concern. There is dire need of joint mechanism for monitoring of all CPEC projects at national level. Some kind of arrangement does exists but it needs to be given due importance so that huge sum of money don’t go to looters & fraudsters as it happened in last five years.

Enhancement of Security Cooperation: An additional benefit of CPEC will be enhanced security cooperation between China and Pakistan which is of primary importance for both countries. Since the so called War on Terror begun, Pakistan is inundated with terrorist activities and similarly China is also concerned over the situation of Xinjiang where secessionist movement of Muslim Uighurs and rising terrorist activities by East Turkestan Islamic Movement (ETIM) are a dangerous situation. This is where CPEC comes in as broad based security cooperation between two sides needed to stabilize the situation in Xinjiang and the adjacent regions. Both countries are united in the fight against the evils of terrorism, extremism, and separatism, which are hampering progress on both sides. The improvement in security condition as a result of CPEC cooperation would contribute to the peace and stability of the whole region specially in Baluchistan where external powers are investing heavily to create confusion. Recent attack on Chinese Consulate (November 2018) in Karachi is a clear cut example of damaging Pak-China relations.

Expanding Naval Partnership: Through CPEC, Pakistan and China would also get an opportunity to augment their naval cooperation in fields as joint exercises and training against counter piracy at high seas. China’s right to manage the Gwadar Port has strong military potentials for the country as it provides China a way into Gulf countries and a chance to consider establishing a naval base on the Arabian Sea in the future. Thus the improvement in China-Pakistan naval partnership as a result of CPEC cooperation would contribute to the balance of power in the whole region.

Upgrade of People-to-People Contact: Another important prospect of CPEC for both countries would be enhancing people-to people contacts and increasing cultural cooperation among the people from both sides which is of foremost importance to reinforce this project and to build a harmonious neighbourhood. In the words of President Xi Jinping: “It is the people who advance progress of nations and history. The support of our peoples is an endless source of force fostering China-Pakistan all-weather friendship and all-round cooperation. We should use the platforms of sister cities, cultural centres and media organizations to conduct diverse events of celebration. China and Pakistan should continue to send 100-member youth groups to visit each other’s country and encourage more contacts and exchanges between young Chinese and Pakistanis. In the next five years, China will provide 2,000 training opportunities for Pakistan and train 1,000 Chinese language teachers for Pakistan”.

Bearing on Regional and Extra-Regional Actors

In coming years, CPEC, the mega land-sea project, will radically change the overall geo-political and strategic landscape of Asia and has enormous potential to reshape the economic outlook of the regional states. It is expected that millions of people of the region will benefit from this corridor as the project has the capacity to boost economic activities, increase trade linkages, enhance technical cooperation, generate new financial opportunities, and amplify sociocultural connectivity among people in the region. The implementation of this inclusive project would bring economic revolution that can transform the fate of the regional states in a positive way. This way CPEC has a greater regional and economic value as it would provide opportunity to all regional actors to make South Asia a all-in-one integrated region. Although there exist many advantages for enhancing economic collaboration and establishing regional interconnection, to put the idea of CPEC into reality is still facing some challenges. The divergent and conflicting interests of some regional and extra-regional actors are threat to the construction and success of CPEC. Since the announcement of CPEC, the regional scenario has already started to change as many countries have begun to see the project with critical eyes and as a thread to their interest, which can hinder the peaceful completion of the project. It is very much possible that few regional actors would try to create friction and rift between China _ Pakistan long-lasting relationship by conducting terrorist activities under the umbrella of Baluchistan Liberation Army (BLA) or other anti-Pakistan factions operating within Pakistan but controlled from outside. .

Afghanistan: For a landlocked country like Afghanistan, CPEC is of vital importance in geo-strategic sense. With the extension of CPEC to Afghanistan, the country can become a major beneficiary of this project as in future the corridor will contribute to the economic development of this hard country by enhancing economic activities in the area, which can bring the fragile economy of Afghanistan back to normalcy. Islamabad has already pledged to construct 265 km long Peshawar to Kabul motorway in order to link up Afghanistan with CPEC. This connection will integrate Afghanistan with other regions and also allow her to start commercial activities through Indian Ocean. The western alignment of the corridor, which originates from Gwadar and runs through Khuzdar, Zhob and finally reaches Islamabad via D.I. Khan. There will be an additional connectivity to link Afghanistan through Quetta-Chaman route. This route will provide an easy and short access to Afghanistan to reach to the sea port of Gwadar which is almost 600 kilometre shorter than the existing transit route being used by the traders and people of Afghanistan. Likewise, the eastern alignment of the corridor which will pass through the motorways starting from Karachi to Lahore and onward to Islamabad and Abbottabad, will also improve road connectivity between both countries.

Central Asian Republics (CARs): The Central Asian States are situated in the heart of Eurasia, which presents exclusive benefit as key transport passage. Due to their vital geo-strategic location and their richness in oil and natural gas resources with major reservoirs in Uzbekistan, Kazakhstan, and Turkmenistan, all regional and international states including Pakistan and China are desirous to get into closer interaction with these states. For CARs, all of the five landlocked countries wish to get access to the sea and diversification of energy channel which CPEC project can fulfil. The project can also help in bringing immense opportunities for the CARs in the economic fields. For the transportation of their natural energy resources, CARs can be facilitated with transit trade and pipeline routes by Pakistan; and their goods can be smoothly exported to Middle East and European states via Gwadar Port. In addition, these energy rich states of Uzbekistan, Azerbaijan, and Turkmenistan have a fine chance to come out from Russian control and export their natural resources through CPEC.

Iran: Initially, the corridor faced resistance from Iran who perceived it to be a competition and is working with India to develop its port of Chabahar. However, recently in September 2015, Iran has considered options of participation in CPEC, the aim being to improve connectivity through road and railway networks to expand the scope of trade and transportation. Good news for Iran is that as part of CPEC, China and Pakistan will construct the liquid natural gas (LNG) terminal at Gwadar and the 700 km long pipelines to import LNG from China which can become the Iran-Pakistan pipeline as well. All that Pakistan has to do now is to link Gwadar with the Iranian border, which is a distance of some 80 KMs. The proposed Iran-Pakistan pipeline will then run from Asaluyeh in Iran to the Pakistani port of Gwadar, which is the nerve centre of CPEC and from there onward to Nawabshah in Sindh to the north of Karachi. This way Pakistan can become the transit country for an Iranian mega gas pipeline leading to China. It would also be the shortest route connecting China with Iran’s tremendous gas fields. At present, the trilateral of “Pakistan-China-Iran” in the region is improving which is a positive sign for CPEC as it promises huge benefits in inter-regional trade.

India: CPEC which is still a bilateral initiative between Pakistan and China has increased Indian mania, creating some sovereignty concerns for India as the corridor can counter its hegemonic designs in the Indian Ocean, Arabian Sea, and the Persian Gulf. In addition, CPEC will have a direct land route access to the CARs with Afghanistan and Iran that India does not have. Moreover, while China is one of India’s largest trading partners, India may have long-term security concerns about Chinese control of the Pakistani seaport of Gwadar. For India CPEC means that China shall have the upper hand in the Arabian Sea as it will have complete control over the Strait of Hormuz through Gwadar’s sea port. This will likely have adverse effects on India’s trade route. Thus the increasing strategic relationship between the two countries in the form of CPEC is a major concern for India – the preeminent power of South Asia, which is visibly upset over the plan of CPEC and has explicitly voiced its opposition. Even Indian PM Modi during his visit to China tried to propose the Chinese President to drop the plan of the corridor as India found the very idea unacceptable, however, China is determined to move ahead with the project. This incited India not to lag behind and to discover new strategic partners around to balance its political rivalry with the two countries: First one in this regard is Indo-Iranian Nexus. An important initiative taken by India to curtail the value of CPEC route is to build “Chabahar” port in the southeast of Iranian land, located 72 km west of Pakistan’s Gwadar port. Now as it seems likely the international sanctions against Iran would be over, the cooperation between Iran and India has visibly increased. Both countries have signed MoU for increasing bilateral trade to $30 billion and an air-services agreement was inked to increase the number of flights between the two nations and allowing each other’s airlines to fly to additional destinations. Plans are taking place for greater maritime cooperation, and Iran has already joined the annual Indian Ocean Naval Symposium, which provides a forum for the navies of the Indian Ocean coastal states to engage each other. Most significantly, “the Modi government has decided to invest $85.21 million in developing the strategically important Chabahar port in Iran, allowing India to evade Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.” India has funded and constructed link roads to establish this seaport which holds immense strategic significance for India as its presence in Chabahar will counterbalance Chinese presence in Gwadar, and it will also get access to landlocked CARs through this port. Another development which made India vary is China’s increasing role in Afghanistan as it is funding a range of projects for reconstruction in the country. India which has invested in Afghanistan, and is eager to play a key role there, is now adopting political and unconventional tactics to derail the development of the corridor. Nevertheless, CPEC can open up trade doors for both Afghanistan and India. The geographical positioning of Pakistan makes it costly for both India and Afghanistan to take up other routes for bilateral trade. The alternate channel for Indo-Afghan transit trade can be carried out through Iranian Chabahar Port; however, that land-sea route would not be cost-effective much as compared to the land-based path through Pakistan. Thus, due to this geographical compulsion, at present India needs to soften its rigidity and to let Afghanistan get the benefits of CPEC. In its efforts to counter CPEC, India has also turned to the UAE which appears to become its new strategic partner in the region. During Modi’s recent visit India and the UAE were able to establish an infrastructure investment fund, with the aim of reaching the target of $75 billion, to support investments in the rapid expansion of next generation infrastructure in India, especially railways, ports, roads, airports, industrial corridors and parks. Also, they agreed to facilitate the participation of Indian companies in infrastructure development in the UAE and promote strategic partnership in the energy sector.  Furthermore, India does not seem pleased with the handing over of Gwadar Port to China due to its security concerns; therefore, there is possibility that “India-UAE nexus will attempt to fail the Gwadar Port development project and create obstructions in the way of exploration activities in the resource rich province of Baluchistan by fuelling insurgency.

Conclusion :

At present, Pakistan should comprehend the shifting ground realities; and through diplomatic endeavours, it should adopt a balanced approach in its foreign policy towards both China and the West; and should explore and capitalize on all opportunities so that its economy does not get trampled under the interests of strong powers. Pakistan should also make attempts to decrease tension with its eastern and western neighbours, which are significant countries for Pakistan’s security and thriving economy in the foreseeable future. A balanced Pakistan would gain more in terms of economy, strategic value, and improved amount of security. Therefore, to realize the long-term trade goals of CPEC, Pakistani government and people need to resolve their internal differences and realize that this project is beneficial for Pakistan.

About The Author

Major (Rtd) Imran Hanif spent almost two decades in the Pakistan Army before moving to United Kingdom. He graduated from Prestigious Pakistan Military Academy (PMA) as commissioned officer in 1991. PMA is equal to Sandhurst in United Kingdom and West Point in USA. He is a graduate of Police Management Course (train the trainer) from Centre of Excellence for Stability Police Units (COESPU) from Vicenza, Italy. He got early retirement in 2008 at his own request and pursued his Post Graduation degree of Master of Business Administration (MBA) from UK. He completed his Post Graduate diploma in Strategic Management and Leadership from Chartered Management Institute (CMI) UK. He achieved the ultimate accolade in management and awarded Chartered Manager (CMgr) status and was declared Fellow of Chartered Management Institute (FCMI). He is also Member of International Professional Security Association (MIPSA) and try to keep himself abreast of latest developments in the field of Strategy & Security. He is a freelance trainer in the field of Conflict Management, Physical Intervention, Security guarding within Private Security Industry. He has spent almost last four years researching and writing his book titled “Storm over Kabul” which reveals all dimensions of Afghan Conflict including a way forward and a logical conclusion for peace and stability in the region. Nowadays he is pursuing his Business goals and working towards his PhD degree.