GP Short Notes # 766, 21 October 2023
On 20 October, Prime Minister Anwaarul Haq Kakar returned from Beijing, after attending the five-day Belt and Road Initiative (BRI) Forum. During this meeting, Pakistan and China strengthened their longstanding partnership, thus signifying a renewed commitment to the China-Pakistan Economic Corridor (CPEC). It also resulted in various agreements and Memoranda of Understanding (MoUs) being signed. Pakistan thereby gained a lot from the forum, securing its position as the ‘key link’ in Beijing’s BRI. On the other hand, China asserted itself as a pioneer of “economic multilateralism and globalisation.”
Agreements and MoUs
During Kakar’s visit, he stated that “Pakistan views its ties with China as a longstanding strategic partnership,” and on these lines, 20 agreements covering diverse sectors were signed. They centred around currency swapping, peace talks, infrastructure development, and even a lunar research station. Chinese President Xi Jinping believes that getting involved in different sectors would support an “upgraded version” of CPEC. A statement released after the visit underscored the commitment of both nations to support each other on issues vital to their core interests. Pakistan reaffirmed its adherence to the one-China principle and opposition to “Taiwan independence,” signifying its strong alignment with China on sensitive geopolitical matters.
Furthermore, both countries witnessed the signing of an initial cooperation agreement on the lunar research station project. According to the China National Space Administration, the collaboration encompasses engineering and operational aspects of the Chinese lunar base program. This endeavour, combined with China’s goal to send astronauts to the moon, underlines China’s ambition to become a significant space power by 2030.
While China remains a vital ally and investor in Pakistan, Jinping and the Chinese foreign ministry voiced security concerns that they had. Pakistan has witnessed attacks on Chinese personnel and projects by separatist and militant groups, raising questions about the safety of Chinese organisations and individuals working in Pakistan. Jinping emphasised the need for security guarantees, stating, “We hope the Pakistani side will guarantee the safety of Chinese institutions and personnel in Pakistan.”
The future of CPEC
CPEC, often regarded as the flagship project of the BRI, is crucial for both nations. As Pakistan completes numerous projects under CPEC, there is a renewed focus on expanding the scope of this economic corridor. Both countries aim to enhance cooperation in various domains, including industrial parks, agriculture, mining, and new energy. Early implementation of major connectivity projects is also on the agenda. However, the issue of revenue distribution within CPEC has garnered attention.
Harsh V Pant’s article, “Responding to the China-Pakistan Economic Corridor Challenge,” suggested that China acquires 91 per cent of the revenue generated by CPEC, leaving Pakistan with a meagre nine per cent. Although specific data to substantiate this claim is not readily available, there are “growing voices in Pakistan that China seems to be a bigger beneficiary from CPEC than Pakistan.” The Chinese view, on the other hand, as expressed by the Chinese ambassador to Pakistan Sun Weidong, is that the trade balance will only be rectified when Chinese companies produce those goods in Pakistan that have a Chinese demand.
An additional angle explored by Pant was the evidence that the “viability of CPEC requires India’s participation.” This is based on a statement made by the Chinese ambassador to India, Luo Zhaohui, who said China could “change the name of CPEC” to “create an alternative corridor through Jammu and Kashmir, Nathu La pass or Nepal to deal with India’s concerns.” However, continued Indian opposition to this proposition “galvanized those who remain suspicious of Chinese motives behind Obor in Pakistan as well as in the rest of the world.”
Syed Irfan Raza, “PM returns from China with more pacts under his belt,” Dawn, 21 October 2023;
“CPEC’s potential,” Dawn, 20 October 2023;
“Pakistan to work with China on GB-Xinjiang economic linkages: PM,” The Express Tribune, 20 October 2023;
“Pakistan joins China’s club of lunar base partners,” The Express Tribune, 20 October 2023;
“China ready to boost Pakistan ties but urges security guarantee: Xi,” Business Recorder, 21 October 2023;
Harsh V Pant, “Responding to the China-Pakistan Economic Corridor challenge,” Observer Research Foundation, 01 December 2017