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May 4, 2015

Regional dynamics of the economic corridor


May 4, 2015


Xi Jinping’s visit to Pakistan two weeks ago was the first to the country by a Chinese president since that of his predecessor Hu Jintao in 2006. It had originally been scheduled for September last year as part of a wider South Asian tour including India, but had to be postponed because of the PTI’s siege of the capital at that time.
Xi’s rescheduled visit to Pakistan was timed by the Chinese side to take place before Indian Prime Minister Modi’s upcoming trip to China later this month, the second bilateral visit between China and India at the top level in less than a year. By visiting Pakistan before hosting Modi, the Chinese president wanted to reassure Islamabad that while pursuing closer ties with India, Beijing continues to attach high importance to maintaining and strengthening its traditionally close multi-faceted relationship with Pakistan.
During Xi’s visit to Pakistan, the two sides reaffirmed their common desire to strengthen and expand their strategic partnership. In the words of the joint statement, they agreed to “elevate the Pakistan-China relationship to an all-weather strategic cooperative partnership”. The highlight of the visit was the signing of dozens of agreements to launch the China-Pakistan Economic Corridor (CPEC), a $46 billion project spanning decades that, besides developing the Gwadar Port and linking it by road and rail with Xinjiang, also includes energy, infrastructure and industrial development projects in Pakistan.Xi called the Economic Corridor a focal point of Pakistan-China economic cooperation and both he and Nawaz emphasised that it would cover all parts of Pakistan and benefit other countries of the region.
But the CPEC is not just a bilateral economic cooperation project that could boost the Pakistani economy and benefit people in some of the least developed parts of the country. It has a very important strategic dimension.
For Pakistan, it could become an additional new factor in fortifying and

deepening its vitally important relationship with China in the 21st century, a relationship which the joint statement described, somewhat redundantly, as the cornerstone of Pakistan’s foreign policy. The CPEC will also have a beneficial spill-over effect on the neighbouring countries to the west of Pakistan in both the economic and political fields. It is expected to stimulate greater economic activity and exchanges between Pakistan and Afghanistan and help bring stability to Afghanistan, besides having a positive impact on the historically troubled Pakistan-Afghan relationship. Further afield, it could attract the land-locked states of Central Asia to route some of their overseas trade through Pakistan.
To the Chinese, the CPEC will provide a short new trade route, through the Gwadar port, to the Arabian Sea and the oil-rich Gulf region to supplement the narrow and overcrowded sea lane through the Malacca Strait that carriesmuch of China’s trade and energy imports.
The strong mutuality of interest between Pakistan and China in developing the economic corridor is therefore clear. Besides, its economic and strategic justification is completely independent of the India factor: it is neither predicated on hostility towards India, nor does its viability depend on India’s participation or cooperation.
From the Chinese perspective, the China-Pakistan Economic Corridor is linked with two much larger infrastructure projects embracing the whole of Asia and designed to establish new trade and transport links between China, Central Asia, South Asia and Europe. Named after the ancient silk route as the Silk Road Economic Belt and the 21st-Century Maritime Silk Road – the ‘Belt and Road Initiative’ for short – these projects were proposed by the Chinese president during visits to the countries of Central Asia and Southeast Asia in 2013.The Silk Road Economic Belt is the overland network while the Maritime Silk Road is its maritime counterpart.
China’s Belt and Road Initiative has been supported by most countries of South Asia – with the notable exception of India. India is also stalling on the Chinese-sponsored Bangladesh-China-India-Myanmar (BCIM) Economic Corridor project. India sees the Chinese projects as an attempt to stymie Indiandesigns to extend its influence in South Asia, the Indian Ocean and Central Asia. These are plans in which India not only has the active support and encouragement of the US. Washington’s ‘New Silk Road’ project, for example, quite unashamedly seeks to promote India’s economic penetration of Afghanistan and Central Asia under the label of regional cooperation.
To counter what India sees as China’s inroads into its strategic domain, Delhi has come up with its own proposals for stronger shipping and trade links in the Indian Ocean under its leadership. ‘Project Mausam’, announced in June 2014, seeks to revive ancient maritime routes between India and its trade partners of those timesin the Indian Ocean. The ‘Spice Route’ project similarly refers to historic sea routes that once linked Asia, Europe and Africa, with India at the centre.
But Delhi has done little beyond announcing its grandiose plans, evidently because unlike Beijing it lacks the necessary resources. Besides, there are few countries interested in what is obviously a very hazy and self-serving idea. India has also shown little inclination to consider a Chinese suggestion to link its Belt and Road Initiative with India’s Spice Route and Mausam projects.
In his speech to the Pakistani parliament, Xi drew attention to the mutual benefits that could flow if South Asian countries were to support the Chinese connectivity projects. South Asia, he said, was where the land and maritime Silk Roads meet. It was therefore a focal area and important cooperation partner for advancing the Belt and Road Initiative. The China-Pakistan Economic Corridor and the Bangladesh-China-India-Myanmar Economic Corridor were closely connected with the land and maritime Silk Roads. The building of these two economic corridors, Xi said, would give a strong boost to the economic growth of the participating countries and provide a strong new force for deepening regional cooperation in South Asia.
India, of course, is not exactly thrilled at the prospect. It supports regional cooperation among South Asian countries only if and when it advances its hegemonic ambitions. That aim will become more difficult to achieve if China becomes a participant in the region’s economic development through its connectivity initiatives. India was virtually alone at last year’s Saarc summit in opposing the proposal to associate China more closely in the activities of the regional grouping. It is equally isolated in its opposition to China’s Belt and Road initiative.
India has even less reason to welcome the China-Pakistan Economic Corridor project. Although the Indian government has kept silent in public, it is known to be worried. Indian concerns have been expressed in subdued tones by Indian media and security analysts. One leading newspaper noted with concern that the realisation of the economic corridor project will give China a “point of access in the Indian Ocean at the virtual tri-junction of South Asia, [Middle East] and Africa”.Another daily has spoken of “fears of encirclement in India, as Gwadar could soon become a base for the Chinese navy.”
C Raja Mohan, one of India’s greatest strategic minds, has a very simple solution for India’s worries on this score. His suggestion, hardly novel, is that on his forthcoming visit to China, Modi should convince his Chinese interlocutors “that the costs of Beijing’s alliance with Rawalpindi could soon exceed the benefits”.Mohan obviously forgets that Indian leaders before Modi have been trying this for decades.
There is of course no rational basis under the present circumstances for Indian concerns, if indeed they are genuine, that Gwadar could become a Chinese naval base. India’s real fear is that the economic corridor could further consolidate the Pakistan-China strategic partnership and that it could give a big boost to Pakistan-Afghanistan economic ties that could take Afghanistan out of the Indian orbit. Another alarming scenario for India is that of Iran deciding to make use of the economic corridor project to promote its gas exports.
With so much at stake for India, it cannot be expected to remain a passive bystander. But lacking a credible diplomatic strategy, it will resort to covert means. The brunt will be felt most of all in Balochistan.
The writer is a former member of the Pakistan Foreign Service.
Email: [email protected]




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