China-Pakistan Economic Corridor (CPEC)

The China-Pakistan Economic Corridor (CPEC) constitutes one of the largest foreign investments China has made in the framework of the one belt one road (OBOR) initiative.

The $46 billion China-Pakistan Economic Corridor between Pakistan and China traverses Jammu and Kashmir, the status of which has been a subject of contention between India and Pakistan since 1947.

Background

• Regionalism has failed to take off in South Asia due to political differences, socio-religious cleavages and deep rooted conflicts between the states, particularly India and Pakistan.
• These differences have created an obstacle for proper galvanization of interest both within and around South Asian Association for Regional Cooperation (SAARC)
• As a result, the member states of SAARC have chosen to collaborate with extra-regional powers in various bilateral and trilateral engagements.
• China has shown special interests in South Asia and the potential vast market that the region provides.
• it is the emerging power most ambitious geo-political and economically significant initiative called one belt one road
• One such connecting thread in OBOR is the CPEC.

Highlights of CPEC

• CPEC plays a key role in Chinese foreign policy, linking infrastructure measures aimed at establishing “New Silk Road” (One road) running through central and south asia with efforts to create a “Maritime silk Road “(One Belt) in the Indian Ocean.
• Upon completion, CPEC will form a network of roads, railways and gas pipelines encompassing approximately 3,000 kilometers in length.
• The aim here is to alleviate chronic energy shortages, stimulate economic development and establish new industrial parks.
• CPEC stretches from the autonomous region of Xinjiang to the Gwadar port.
• CPEC provides China the opportunity to access the Arabian Sea and the Indian Ocean.
• It will also enable Pakistan to create an alternative to the US for patronage while bringing economic development in desperately poor regions including Pakistan Occupied Kashmir (POK).
• The project when it is completed would enable China to pump its oil supplies from the Middle East through the pipelines to Xinjiang cutting considerable distance for Chinese ships to travel to China.
• What the project means for India?
• India is the third party on which the CPEC impacts a lot of intangible and indirect effects.
• The project goes through the disputed Pak occupied Kashmir (Gilgit- Baltistan) is problematic for India.

CPEC and India-Pakistan Relations
The corridor runs through the region of Gilgit-Baltistan (GB) in northern Pakistan. This region belongs to Jammu and Kashmir, to which both India and Pakistan have asserted claims.

Negative Effects

• Improved economic development could lead to an increase in Pakistan military spending. This would presumably further fuel the arms race with India.
• Pakistan economically strengthened by Chinese support would have little interest in expanding economic cooperation with India.
• Pakistan could then more forcefully place the Kashmir dispute on the foreign policy agenda, as it did intermittently in 2014/15.
• The economic and political effects of CPEC would essentially prolong the negative cycle of India-Pakistan relations.

Positive Scenario

• This would have an effect on the constitutional status of the Gilgit Baltistan region in Pakistan, on the one hand, and on relations between China, Pakistan and India on the other.
• CPEC to improve Pakistan’s economic development, this could foment discontent in Gilgit-Baltistan over the growing gap between the region and other provinces.
• Contributing to improving Pakistans infrastructure and easing its chronic energy shortage.
• CPEC and its economic effects will also contribute to the transformation of Pakistani society and the strengthening of moderate forces.
• Peaceful development in Pakistan could in turn also have a positive influence on the region, for example with regard to the situation in Afghanistan.
• Granting Gilgit-Baltistan the constitutional status of a province would codify the status quo, thus indirectly bringing the Kashmir dispute to an end.

What the project means for Pakistan?

• Such projects will give rise to jobs (particularly unskilled ones), will allow local businesses to benefit, and might open the way to development.
• If Pakistan is able to overcome its security problems, the CPEC can be a game changer.
• Pakistan can get an opportunity to develop its infrastructure – especially energy.
• Bulk of the CPEC is aimed to develop Pakistan’s energy sector including the construction of the largest solar energy plant in the world.
• Pakistan as a natural resource exporter can sell its commodities to the lucrative Chinese markets through the CPEC transit route.

Concerns

1. First and most importantly it runs through POK which is claimed by india. So if china is going ahead with this project that means it considers this part Pakistani territory not a disputed region.
2. China gets Gwadar port through which china gets a strategic naval presence to encircle India from third side.
3. Also it gets a place where its naval resources can stay, putting a bit of pressure on India.
4. Next most important thing, in case of war like situation it can quickly mobilize its army to help its all whether friend.