delivered a talk on China-Pakistan Energy Corridor and its ramifications at Thinkers Forum Pakistan on May 31, 2015, chaired by Air Chief Marshal (retd) Kaleem Saadat and attended by Lt Gen (retd) Lodhi, and members both from civil and military. After the talk, there was long question/answer session followed by summing up by the Chairman. Details of presentation are covered in succeeding paragraphs:
CPEC. Establishment of China-Pakistan Economic Corridor (CPEC) was first proposed by Chinese Premier Li Keqiang during his visit to Pakistan in May 2013. The proposed project of linking Kashgar in northwest China with Gwadar Port on Arabian Sea coastline in Baluchistan was approved on July 5, 2013 during the visit of PM Nawaz Sharif to Beijing, which included construction of 200 km long tunnel.
China’s Investments. In December 2013, China committed $6.5 billion for the construction of a major nuclear power project in Karachi. In May 2014, another agreement was signed to supplement Orange Line metro train project in Lahore worth $1.27 billion. In November 2014, the two countries signed 19 agreements related to CPEC. In addition, Chinese firms started work on six mega power projects in Gilgit-Baltistan such as Dassu, Phandar, Bashu, Harpo, Yalbo to tackle Pakistan’s energy crisis.
Quest for Warm Waters. Mindful of the under development of its western provinces which are its soft belly and ongoing Uighur movement, China wants speedy modernisation of Xingjiang and other under developed provinces to bring them at par with eastern provinces. For the accomplishment of these dreams, China needs access to warm waters in Arabian Sea through Gwadar since this route to world markets is the shortest and the cheapest. This access was never granted to Russia.
Visit of Xi Jinping. With this objective in view, President Xi Jinping visited Islamabad on April 20-21, 2015 and raised the level of investment from $ 26 billion to $ 46 Billion. He signed 51 agreements/MoUs worth $28 billion, with $17 billion in pipeline spread over 15 years. His visit achieved the milestone of the groundbreaking of historic 3,000 km-long strategic CPEC.
Projects in Hand
It includes $ 33 billion worth energy projects such as coal, solar, hydroelectric power projects which will inject 10,400 MW electricity in the national grid by 2017/18, and hydro power projects. Other projects are fibre optic cable from Xingjiang to Rawalpindi, 1240 km long Karachi-Lahore motorway, metro and bus service in six major cities, up gradation of 1300 km long Karakorum Highway, oil/gas pipelines to connect Kashgar to the seaport of Gwadar, 1,800-km railway line, commercial sea-lanes, special economic zones, dry ports and other infrastructure.
Routes: Three routes have been marked:-
Western route originating from Gwadar will pass through Turbat, Panjgur, Naag, Basima, Sohrab, Kalat, Quetta, Qila Saifullah, Zhob DIK, Mianwali, Hasanabdal, Isbd.
Central route will originate from Gwadar, Quetta, and reach DIK via Basima, Khuzdar, Sukkar, Rajanpur, Liya, Muzaffargarh, Bhakkar, DIK.
Eastern route will include Gwadar, Basima, Khuzdar, Sukkar, RYK, Bwp, Multan, Lahore/Fsbd, Isbd, Mansehra.
Importance of Gwadar. Gwadar is one of the least developed districts in Baluchistan province. It sits strategically near the Persian Gulf and close to the Strait of Hormuz, through which 40 per cent of the world’s oil passes. Work on Gwadar deep-seaport had started in 2002 with China’s investment. In 2013, management of the seaport which was in the sloppy hands of Singapore PSA International was handed over to China’s Port Holdings. It is planned to develop Gwadar into free trade zone with a modern airport on the model of Singapore or Hong Kong and a gateway to CPEC. It will be largest, deep seaport, overshadowing Chahbahar and Dubai seaports.
Views of Analysts
Some analysts perceive Gwadar seaport turning into China’s naval base in the Indian Ocean, enabling Beijing to monitor Indian and American naval activities and thus frustrating their ambition to convert the ocean into exclusive Indian lake. Modernization of Pak Navy by China is seen as a step in that direction.
Analysts say the projects conceived under CPEC will ease Pakistan’s energy shortages and make a substantial difference in the long term.
Some experts opine this initiative can bring greater cohesion in South Asia, one of the world’s least economically integrated regions. It is also feared that clashing geo-economic interests may lead to unhealthy competition.
Gains for China
While the CPEC may be ‘monumental’ for Pakistan, for China it is part of more ambitious plans to beef up the country’s global economic muscle. Chinese officials describe the corridor as the “flagship project” of a broader policy — “One Belt, One Road” — which seeks to physically connect China to its markets in Asia, Africa, Europe and beyond. The New Silk Road will link China with Europe through Central Asia and the Maritime Silk Road to ensure a safe passage of China’s shipping through the Indian Ocean and the South China Sea. CPEC will link China with nearly half of the population of the world.
Access to Indian Ocean via Gwadar will enable China’s naval warships and merchant ships to bypass Malacca Strait and overcome its “Malacca Dilemma”.
Development of Gwadar seaport and improvement of the infrastructure in the hinterland would help China sustain its permanent naval presence in the Gulf of Oman and the Arabian Sea.
At the same time, the new silk roads are bound to intensify ongoing competition between India and China –and to a lesser extent between China and the US – to invest in and cultivate influence in the broader Central Asian region.