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CPEC- An economic Game Changer or Strategic Gamble

Gen Asthana writes: While Pakistan is overjoyed to expect a windfall of economic bounty, was very quick to announce the Chinese Naval deployment in Gwadar, and over assured presence of Chinese military to secure their Lines of Communication and related SLOC, with release of such statements.

With arrival of first Chinese ship at Gwadar port on 11 November 2016, sailing of two container ships from there on 13 November, preceded by a Chinese trade convoy reaching there through land route from Xinjiang, carrying exports for Asian, Gulf and other countries, a formal signaling of the 3218 km long China Pakistan Economic Corridor (CPEC) project commencing to be a potential reality is evident. While Pakistan is overjoyed to expect a windfall of economic bounty, was very quick to announce the Chinese Naval deployment in Gwadar, and over assured presence of Chinese military to secure their Lines of Communication and related SLOC, with release of such statements. (The Times of India, 26 and November 2016). Pakistan was also quick to announce the Russians request to use Gwadar Port (Geo News). The Chinese on the other hand, seem to be trying hard to convince everyone that CPEC and Gwadar port are purely developmental, integrative, economical activities with no military intent. China seems to be adopting step by step approach, by testing the water, without ignoring the potential security concerns. Both these countries know it well that it is not going to be that easy, as it is made out to be. It also raises some concerns for India by re-igniting its sovereignty issue of POK and recalibrating Indian response in potential conflict, assuming Chinese presence in Pakistan. It also signals encroachment of China into historic strategic space of US, who cannot dump Pakistan completely due to its strategic location, and usefulness for foothold in Middle-East, although no significant statement has appeared from them.

The $46bn CPEC  does provide connectivity from Kashgar to Gwadar, warm water access to Western region of China, avoiding Malacca and other choke point for her energy and trade flow, outlet to its overcapacities and trade surpluses, and development of its Western Region. It helps Pakistan in their economic development, with heavy investments and meeting critical energy shortages. Strategically, it clearly indicates China’s effort to seek security in Xinjiang through economic development, hoping that it will help in tackling insurgency by Uyghur related militant groups (especially militants taking refuge inside Pakistan like ETIM, working in conjunction with TTP and other militant groups). Although China, Pakistan and world media have published numerous articles on CPEC, highlighting its economic and developmental advantages, and airing some security concerns of CPEC, however, in the recent past the realistic realization of the actual problems and concerns are being aired by various authors, think-tank’s and global organizations including that of  China and Pakistan. Let me highlight some of them including military impact of the project on India.

Concerns of Pakistan

  • IMF calculates that CPEC will push Pakistan into greater debt burden/trap to reach a current account deficit of approximately 1.5 Percent of its GDP.
  • China is not gifting money. The infrastructure will be built by its own companies using their own workers (sending revenue back to China, hence limited jobs and no significant economic bounty generated for Pakistan), and the energy produced may be too costly to be affordable by average Pakistanis.
  • The dream of SEZ may remain on paper due to peculiar governance system of Pakistan, like there is no drinking water in areas around Gwadar supposed to be a SEZ, indicating the priorities of China. Such incidents do ignite resentment in Baluchistan.
  • Providing double the number of security personnel to increasing number of Chinese workers may not be sustainable in the long run. The commitment of their critical combat resources like Marine Squadron on security duties in Gwadar ( , and SSG on CPEC not being sustainable, is also a concern.
  • Unrest in Baluchistan, Gilgit-Baltistan and activation of militant groups opposing any foreign elements in Pakistan, as it disturbs their Jihadist freedom and terror industry.
  • Facing the collective wrath of US and India, internal political opposition (neglected population calling it Punjab Corridor) and militant groups, vis a vis the anticipated gains is questionable.

Concerns of China 

  • Some of the projects may not be economically viable, e.g. the consumption of oil in Western region may not be sufficient to make an oil pipeline economically viable. Its transportation by land to mainland over rough terrain may work out to be costlier than old sea route.
  • Reactivation of Uyghur related militancy in conjunction with other militant groups inside Pakistan, inimical to any foreign presence. After all some militant groups earlier nurtured by Pakistan are regularly attacking their own Army, hence assurance of Security by Pakistan cannot be relied upon. The recent incident ofwithdrawal of all passports of residents of Xinjiang may add fuel to fire.
  • China also needs to be concerned about the sustainability of the project in terms of cost to its own security. The policy of appeasement of some militant groups like JeM does not work for long time with militants, who are uncontrollable demons, ready to bite their own sponsors. They follow their own interests, dynamics and sympathies for their Uyghur community, which may not coincide with China. Once they start shooting Chinese, China will realize the dynamics of entering a new kind of warfare, just as US realized after 9/11. China needs to worry about expansion of militancy into its mainland as a result of CPEC-Gwadar adventure, because fidayeens, who are mentally prepared to die, are not easy to deal with.
  • A possible US reaction to encroachment of China into some of their strategic space, and disturbing the fine equilibrium with them in using Pakistani territory for their strategic gains by both of them, without undue clash. China has made best use of pre and post election period in US, when bold decisions were not expected, to increase her strategic influence, but it may not be that rosy always.
  • Potential of US and India to actively pursue their concerns, which may hamper success and sustainability of this project. The sovereignty issue of India over POK is being voiced much more, after CPEC plans were rolled out, with a new rhetoric to take back POK.
  • In case of hostilities, Gwadar may well prove to be a vulnerability rather than strength, as PLA Navy in near future may not have the combat power to take on entire hostile environment from East China Sea, South China Sea, Indian Ocean and Arabian Sea. Chinese presence in Gwadar does not make it immune to blockade by others, although the other scenario based implications may have to be thought through by anyone trying such action.

Is there a Need for India to be Concerned ?    

  • Improving economic potential/opportunities, development and its trade prospects is a sovereign right of every country and to that extent, if CPEC and Gwadar improve these prospects of China, Pakistan, Iran, Turkmenistan, and possibly Russia, India has no reason to be concerned about it, but if its aligned to pass through Indian sovereign territory without its consent, then India has every reason to be concerned about it.   
  • India has no reason to worry as it is well used to China developing infrastructure in its neighborhood to include Nepal, Bangladesh, Myanmar and Srilanka, so such developments in Pakistan can be taken in a stride, hence purely from infrastructure perspective, India needs to calibrate her policies.
  • The competition for strategic space in Asia-Pacific is a reality and US, China and India cannot ignore it. Indian concern of Sovereignty over POK needs to be addressed, because in absence of such efforts, Indian rhetoric of taking back POK may gain momentum.
  • The strategic and military options of India against Pakistan, for counter-militancy operations will have to cater for Chinese presence, and the effect on their trade, however considering their “All weather friendship” the possibility of their collusive reaction is not new for India.


Daniel S. Markey and James West (2016), Behind China’s Gambit in Pakistan, Council on Foreign Relations, May 12, 2016.

Akber Ali (2016), China Pakistan Economic Corridor: Prospects and Challenges for Regional Integration,School of Journalism & Communication, Shanghai University, China. http://www. -2151-6200 -1000204.php?aid=77852

Ian Price (2016), Is the US Trying to Sabotage the China-Pakistan Economic Corridor? The Diplomat, September 29, 2016.

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