Why is the China-Pakistan Economic Corridor stalled | Explained Premium

Cash-strapped Pakistan is seeking to appease China and restart investment in the China-Pakistan Economic Corridor (CPEC). Here’s a look at how China’s ambitious CPEC started and why the bilateral project has been stalled of late.

The story so far: Seeking urgent funds to the tune of $65 billion via infrastructure investment, Pakistan’s caretaker Prime Minister Anwaarul Haq Kakar,on October 20, completed a five-day trip to Beijing. He was also attempting to allay China’s demands regarding the China-Pakistan Economic Corridor (CPEC), the ambitious infrastructure project spearheaded by Beijing from 2015 that has reached an impasse due to disagreements over the Gwadar port in Balochistan.

Meeting Chinese President Xi Jinping on the sidelines of the third Belt and Road Forum for International Cooperation, Mr. Kakar pledged that Islamabad would ‘not allow anything’ to undermine ties with Beijing, Pakistani publication Dawn reported. Terming the China-Pakistan partnership as ‘made in heaven’, he assured that Islamabad ‘blindly trusted China’ and was committed to CPEC and peace in the region.

Signing over 20 agreements with China, Mr. Kakar aims to boost his cash-starved nation’s coffers as Islamabad heads to another election in January 2024. The inked pacts include speedy development of the Gwadar port and its auxiliaries to facilitate regional connectivity, keeping the Khunjerab border (dividing China’s Southern Xinjiang and Pakistan Occupied Kashmir (PoK)‘s Gilgit-Baltistan) open throughout the year, construction of the New Gwadar International Airport, the Pakistan-China Friendship Hospital, a desalination plant and other projects.

Attempting to break the impasse , Mr. Xi sought effective security measures to protect the hundreds of Chinese workers and engineers working on CPEC infrastructure projects from Pakistan-based militant attacks. CPEC, a part of China’s Belt and Road Initiative (BRI), is set to receive a lion’s share of the 350-billion-yuan ($47.9 billion) financing windows to be set up by China Development Bank and the Export–Import Bank of China.

The move comes just a month after Beijing refused to further expand cooperation with Islamabad in areas of energy, water management, and climate change under CPEC.

The original idea for bilateral investment in infrastructure projects in Pakistan began in 2001 when China agreed to finance the construction of Gwadar port and the Makran Coastal Highway which connected Gwadar and Karachi. Soon the port became functional and Hong Kong-based China Overseas Ports Holding Company began freight operations from there.

This success gave way to a bigger ‘economic corridor’ project when then Chinese President Li Keqiang visited Islamabad in 2013 and met his counterpart Nawaz Sharif to kickstart China’s One Belt One Road (OBOR)— an initiative to revive the 15th century trade route connecting China to West Asia and Europe via land and sea. Apart from Pakistan, Mr. Li had visited India, Bangladesh and Myanmar to rope them into OBOR.