Economic Corridor Pakistan China Map – Regional relations between Pakistan and China have been in turmoil for two years. Since its launch on April 20, 2015, the China-Pakistan Economic Corridor has met with praise, skepticism and even violence. The result is complete confusion about what constitutes $55 energy and resource spending and how it affects the region.
These two leaders are highly praised. In a speech to Pakistan’s parliament two years ago, Chinese President Xi Jinping called CPEC the key to “all-weather cooperation”. He said the friendship between China and Pakistan is “higher than mountains, deeper than seas and sweeter than honey”.
Economic Corridor Pakistan China Map
Pakistani leaders agreed. Government officials have touted CPEC as the solution to many of Pakistan’s economic problems, from solving energy shortages to boosting manufacturing and exports. In November, Pakistani Prime Minister Nawaz Sharif called the opening of Gwadar port “the beginning of a new era”.
Overlapping Infrastructure Networks Of The China Pakistan Economic…
Outside observers reacted with a mixture of optimism and skepticism. The International Monetary Fund as well as the US credit agency Moody’s and others have highlighted the growth potential of CPEC. But they warn that success depends on Pakistan improving its overall business environment, making structural changes in the energy sector and adopting reform policies.
India is skeptical. CPEC includes projects in Gilgit-Baltistan, a disputed territory that India claims is administered by Pakistan. Indian Prime Minister Narendra Modi publicly criticized this aspect of CPEC earlier this year when he said, “Only by respecting the sovereignty of the countries involved can regional relations fulfill its promises and avoid conflicts and conflicts.”
India’s concerns continue to fuel the CPEC debate. CPEC is positioned as a route, but connectivity is its strongest point. Roads, communication and other connectivity services are a small part of the total effort. On the other hand, more than 60% of the announced CPEC funds are related to domestic energy projects.
The CPEC connectivity project faces serious challenges. Gwadar will struggle to compete with existing ports that are close to existing shipping routes. The Karakoram Highway, which crosses the difficult Pakistan-China border, is being modernized and expanded. After that, it would be closed every winter due to heavy rains. “All Weather” can serve as a metaphor for China-Pakistan relations; literally, it will take a long time for CPEC.
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The discrepancy between CPEC’s rhetoric and reality has raised suspicions among some observers. If these projects have shaky economic value, they believe military goals should be the real driver. This concern is exacerbated by the fact that roads, railways and ports are dual-use facilities open to goods and troops. Finally, some experts say that Gwadar could become a Chinese port.
Harsh reaction to CPEC from Pakistan. Megaprojects stimulate competition between domestic interest groups. Construction projects, service contracts and other assets are at stake. Services can also create new business processes. Road traffic, for example, can benefit some communities and harm others.
Rivalry in Pakistan is fueled by regional and separatist conflicts. The bulk of CPEC spending so far has been concentrated in Punjab, the eastern province where many of the ruling party’s leaders hail from. In sparsely populated western Balochistan, separatist groups went after CPEC construction workers, most recently in early April.
In response, Pakistan deployed around 15,000 troops to secure CPEC-related projects. Official reports and satellite images show that construction continues in West Pakistan, including where attacks have been reported. These efforts will help everyone, but they are unlikely to convince many global companies to send their cargo through the dangerous terrain of CPEC.
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Defense projects make headlines, but CPEC’s biggest risk is slow economic growth. Pakistan is borrowing for these big projects and repayment will require steady growth. Pakistan estimates annual growth in gross domestic product between 6 and 7%. This means optimism about the future, which leaves little room for error, let alone the unexpected. GDP growth this year will exceed 5 percent.
Two recent developments are Pakistan’s growing debt problem. The first is the government’s statement that energy loans come from the private sector and therefore should not be included in Pakistan’s public debt-to-GDP ratio. While this is almost correct, relying on this argument shows a willingness to sidestep risk by defining it rather than addressing it directly.
Pakistan is struggling to find Chinese money. The Bank of Pakistan reported a 54% drop in Chinese investment in its latest quarterly report. “The decline in Chinese investment this fiscal year is encouraging,” the Bank wrote, “as it does not appear to have fallen to the level of CPEC-related projects that could be expected.” It is encouraging that the Bank is aware of this issue and is willing to discuss it openly. But it also suggests that greater institutional capacity is needed to monitor Pakistan’s debt risks.
Capacity building is an area where the international community has much to offer. Helping Pakistan improve its capacity to monitor, implement and monitor related infrastructure projects and financial systems will reduce the likelihood of fraud and surprises. At this time, many projects have been prepared. But those who are just starting construction can benefit from strict supervision and implementation. Of course, there will be difficult decisions to make in the future about how to deal with dysfunctional work.
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There is no doubt that Pakistan stands to make a lot of money from projects under the CPEC banner, especially in the energy sector. The real question is whether Islamabad took too much too soon. Delivering a large infrastructure project on time, cost and with all the intended benefits is rarely achieved, even in the best of business environments.
The issue of friendship between China and Pakistan is also a warning. The mountains are high and the sea is deep, but like a great debt, it is also dangerous. Honey is sweet, but as a stimulant, it provides a temporary boost that quickly wears off. Public assets such as infrastructure and energy services are critical to economic growth, but can be damaging if misused.
Jonathan Hillman is director of the Reconnecting Asia Project at the Center for Strategic and International Studies in Washington. The China-Pakistan Economic Corridor (CPEC) is part development plan and part strategic endeavour. Although Beijing and Islamabad have been close partners for decades, CPEC is an expression of cooperation and expansion at a time of China’s growing geopolitical ambitions and ongoing concerns over Pakistan’s security and development.
CPEC aims to improve connectivity in Pakistan with road, rail and pipeline networks, as well as energy, industrial and other infrastructure development projects to address critical energy shortages to boost economic growth. Pakistan. Finally, CPEC will also facilitate trade along the land corridor that connects China to the Indian Ocean, linking the Chinese city of Kashgar with the Pakistani port of Gwadar.
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Pakistani President Mamnoon Hussain, Chinese President Xi Jinping and Pakistani Prime Minister Nawaz Sharif at Nur Khan International Airport in Islamabad on April 20, 2015. (Department of Information / Government of Pakistan)
Pakistan and China approved the CPEC plan in April 2015 when they signed 51 agreements recognizing Chinese investment worth a total of $46 billion over the next ten to fifteen years. Several projects have already started, including highways and energy projects, which are expected to be completed by the end of 2016.
CPEC development is part of China’s grand regional economic integration plan: the One Belt, One Road (OBOR) plan outlined by China’s National Development and Reform Commission (NDRC) in March 2015. roads, railways, pipelines, ports and information networks to deepen economic relations and integration in Asia, Africa and Europe.
Since OBOR has the Eurasian continent’s “Silk Road Economic Belt” and Southeast Asia’s “Maritime Silk Road”, Pakistan can serve as a link between the two routes, Beijing has described CPEC as a “key project”. Although Beijing was quick to dismiss the geostrategic motivation behind CPEC, many commentators have noted that in the long term, land links between Pakistan and the Arabian Sea could help alleviate the “Melaka Dilemma”. China’s weakness lies in the fact that about 85 percent [PDF] of its oil imports pass through the single bottleneck of the Straits of Malacca.
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Understanding CPEC requires recognizing China’s security concerns, especially from the western region of Xinjiang. Beijing has tried to suppress the Uyghur community in Xinjiang, using political violence, increased security presence and efforts to develop economic development plans. This effort involves Pakistan, as Uighur militant groups such as the East Turkestan Islamic Movement (ETIM) have sought refuge in the Pakistan-Afghanistan region, where they have established ties with al-Qaeda and the Taliban in Afghanistan and Pakistan. China regards ETIM as a constant threat and is determined to target China and attack China’s interests [PDF].
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