China- Pak ink new CPEC agreement

Last Updated05/02/2022

China and Pakistan on Friday signed a new agreement on industrial cooperation as part of the China Pakistan Economic Corridor (CPEC) plan during Pakistan’s Prime Minister's ongoing visit to Beijing.
The industrial cooperation agreement is a key part of what is being called “phase two” of CPEC.
The first phase primarily involved Chinese investments in energy projects as well as road infrastructure.

It is a part of China’s ambitious One Belt One Road (OBOR) Initiative to link China with Europe.
Started in 2013, the CPEC is a developmental project between Pakistan and its all-weather friend China.
CPEC is a 46 billion dollar project connecting Kashgar in Xinjiang province of China, with Gwadar port in Balochistan which is the largest province in Pakistan.
It is connected through a vast and complex network of roads as well as other infrastructure projects such as dams, hydropower projects, railways, and pipelines.

Under the‘1+4’ cooperation framework of CPEC, ‘1’ represents ‘CPEC’ and the 4 includes Energy, Gwadar Port, Transport Infrastructure, and Industrial cooperation.
The Chinese investments are supposed to boost Pakistan’s 274 billion dollar GDP by over 15 percent.
Energy needs of Pakistan: Large-scale energy production has been termed as the biggest breakthrough of the project.
Hydropower projects in this initiative can double Pakistan’s energy capacity.
Infrastructure development & Employment Opportunities:

Access to the Middle East and Europe: By shortening its route by about 12,000 km which is critical for energy imports.
Gwadar Port provides a link between Maritime Silk Road and the Arabian Sea.
Gwadar will have the estimated capacity to handle 19 million tonnes of crude oil per year, which will be sent to China after being refined at the port.
The port at the mouth of the Persian Gulf provides China with the shortest route to the oil-rich Middle East, Africa, and most of the Western hemisphere
At present, China transports 80% of its oil through the Strait of Malacca.
China also has huge strategic and geopolitical advantages in the Indian Ocean region.
Apart from these lucrative commercial benefits, China also has huge strategic and geopolitical advantages in the Indian Ocean region.

The planned CPEC route passes through POK and Gilgit-Baltistan, which India claims to be its own integral and indispensable territory, illegally held by CPEC also somewhat legitimizes
Pakistan’s ownership over disputed PoK may lead to the internationalization of the Kashmir Issue which India doesn’t want.
Apart from this India feels that the high economic stakes in the project will push China to ally with Pakistan on the Kashmir dispute.
With the complete realization of CPEC, China will get a free corridor to move its armor and mechanized weapons which are a threat to India in the plains of Punjab and Rajasthan.
In the guise of securing CPEC, China can permanently position troops on Pakistan soil not too far from the Indian
Despite clarifications from China and Pakistan that the port at Gwadar will be used only for economic purposes, India fears that China may establish a naval base at Gwadar to ensure Chinese maritime hegemony in the Indian Ocean.
India considers Gwadar Port as part of China’s String of Pearls” bases, that extends from its eastern coast to the Arabian Sea.

In order to counter Chinese dominance in Gwadar Port, India has invested in Iran’s Chabahar port which is very near to Gwadar.
Also, India, Iran, and Afghanistan signed a trade corridor deal giving India land access to Central Asia from Chabahar, bypassing Pakistan.
India can work on improving the relationship with Pakistan as it can provide the shortest land route for us to access Central Asia.
Therefore a good relationship with Pakistan can give a boost to our trade relations with central Asian countries.
India should keep in mind that the realization of CPEC is important as a stable and economically strong Pakistan is necessary for peace and prosperity in the region.

China-Pakistan Economic Corridor (CPEC) can act as a catalyst for economic connectivity and integration in Central Asia, South Asia, and West Asia.
However, it should not jeopardise the India’s sovereignty through any channel. India should highlight its concerns via diplomatic initiatives to address it fears.
India should be cautious while explicitly opposing the project as it would strain the relationship with China.
Last but not the least a prosperous South Asia is possible only if India and Pakistan leave their political clout and work closely with each other to find an amicable solution to the bilateral Issues.