CPEC to CPEC 2.0 – The Nation

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One of the finest initiatives of early Pakistan’s foreign policy was opening up to China during the early 1950s. It is worth noting that Pakistan was the third non-communist and first Muslim country in the world that recognize the People’s Republic of China and establish full-fledged diplomatic relationships with China while other parts of the world- especially the West- did not recognize PRC as a sole representative of China and extended Chinese UNO and UNSC seats to Taiwan at that time. Meanwhile, global politics and regional dynamics changed during the 1970s justified China-USA relations where Pakistan was a key player in facilitating Henry Kissinger’s visit (July 1971) to China which later on provided the groundwork to President Nixon’s arrival (Feb 1972) at Dragon Doors. Afterwards, China became part of the international community.

Meanwhile, during that period, owing to the convergence of interests, Pakistan and China have fully established political, economic, diplomatic and cultural relations. It is also noted that China didn’t forget the diplomacy and statecraft of Pakistan during the isolation period of China that acted as a bridge between China and the international community. It is not surprising that after becoming the second largest economy in 2010 when China decided to establish BRI- China and Pakistan decided to establish China Pakistan Economic Corridor (CPEC).

Although the genesis of CPEC can be traced back to the late 1950s, the initial groundwork of the project was set by President Musharraf’s era. In 2013, then the government of PPP under President Asif Ali Zardari signed a MoU with the Chinese government for the startup of CPEC. In 2015, both governments decided to kick off the projects of CPEC.

In the year 2024, the new coalition government of Pakistan under the leadership of PM Shahbaz Sharif has embarked on the revival of CPEC- phase 2 where both governments are trying hard to revive the Main-Line 1 (ML1) project. The initial project value of ML-1 was around $9bn which was later on cut to $6-7bn owing to concerns of debt obligation. In that project, the 1726 km track of railway line would be reconstructed and redesigned for the upgradation and modernization of the Railway of Pakistan. Through ML1, Pakistan’s economy, cargo facility and passenger traffic would be manifold.


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In the second phase of CPEC, both countries have decided to build Special Economic Zones (SEZs) to attract trade, investment and manufacturing capabilities of Pakistan. Initially, nine SEZs would be established, however, due to COVID-19, Pakistan was able to establish four SEZs in the country, where special incentives and taxation exemptions are given for the facilitation of a friendly business environment.

Now let’s move towards Gwadar. Experts viewed that the real strategic reason for CPEC lies in the building of Gwadar port facilities;70pc of Chinese goods and services go through the Strait of Malacca where China’s rival powers are in charge. China opted that in the case of potential war or high tensions with the USA, this vital choke point might be blocked which essentially plugged the Chinese economy. Therefore, upon that consideration, China decided to create an alternative route where Gwadar connected with Kashgar through the networks of roads, railways, and highways. Meanwhile, Pakistan through Gwadar port can become the potential hub of regional trade and connectivity among South Asia, Middle East, and Central Asia.

Upon these considerations, Pakistan viewed CPEC as a game changer in the region. It is also notable thing that owing to the economic component between China and Pakistan, both countries can deepen their strategic relations and become partners in regional peace and connectivity. China has also inked a strategic relationship with Iran, in the form of economic investment, having worth $400bn meanwhile China has also become a key player in Taliban’s Afghanistan by pumping economic investment in rare minerals. These omens indicated that strong possibility of the extension of CPEC into Iran, Afghanistan and Central Asia.

Meanwhile, the USA is watching these economic developments of China through a suspicious lens and is fully locked into strategic competition with China. Initially, the USA has tried to present rival plans for BRI like B3W, Global Gateway and India-Middle East-Europe Economic Corridor, and all of them have backfired. Thereby, the USA has been directly involved in defaming projects of BRI and CPEC as debt traps and asking Pakistan to roll back some of CPEC projects IMF has also taken a cautious outlook of CPEC projects, most of these considerations are politically in nature. Not to forget India here, which always indulges in sabotaging Pakistan. India, from the first day, questioned CPEC due to the alleged involvement of the GB region. However, Pakistan has set aside Indian claims and doubled down on CPEC projects while calling GB and Kashmir an integral part of Pakistan. Nevertheless, many intelligence reports are claiming that India is covertly attacking Chinese workers and engineers for sabotaging CPEC Projects while instigating terrorism in Baluchistan for crippling Gwadar Port.

Therefore, Pakistan should eliminate the menace of terrorism and build political stability at home for the completion of CPEC projects. In addition to that, this country needs to revamp basic economic reforms to clamp down on bureaucratic and red-tapism that are delaying the strategic nature of CPEC projects. Meanwhile, the government should also take a rational approach regarding the nature of debt mounting from CPEC projects while strategies must be devised at both government and non-governmental levels to manage the debt burden of CPEC projects. Last but not least, Pakistan should fully implement CPEC Projects without antagonizing the USA as I repeatedly argued in this newspaper that Pakistan can’t choose between China and the USA.

Sher Ali Bukhari
The writer is a UET alumni with keen interest in Pakistan’s foreign policy.

This post was originally published on 3rd party site mentioned in the title this site

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