Foreign Policy Watch: India-China

CPEC- The corridor of uncertainty


From UPSC perspective, the following things are important :

Prelims level: Gilgit-Baltistan Region, CPEC

Mains level: CPEC and India's sovereignty concerns

The China-Pakistan Economic Corridor (CPEC) has turned five.

What is CPEC?

  • China–Pakistan Economic Corridor (CPEC) is a collection of infrastructure projects that are under construction throughout Pakistan since 2013.
  • It is an extension of the Belt and Road Initiative of China.
  • It intended to upgrade Pakistan’s required infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and special economic zones.
  • On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia.

Why in news?

  • The viability of some of the CPEC’s projects, and how they were going to be paid for in a pandemic-hit economy, had come under renewed attention in Pakistan.
  • China had sought additional guarantees before sanctioning a $6 billion loan for the Main Line-1 (ML-1) project, which includes upgrading a 1,872 km rail line from Peshawar to Karachi.
  • This is due to the “weakening financial position of Pakistan” and had “proposed a mix of commercial and concessional loans against Islamabad’s desire to secure the cheapest lending”.

An overrated project

  • The CPEC, to some degree, has been a victim of its own hype.
  • Its economic figure may never materialise as the plan has been “considerably slimmed-down” from the scope that was first imagined.
  • This largely due to the ever-deteriorating financial situation of Pakistan and a visible debt-trap.
  • Pakistan had established a CPEC authority to speed up the execution of several projects that were mired in delays (and to give the military a greater role in the project).

Threats of Baloch insurgency

  • Gwadar, the heartland of CPEC certainly faces serious threats.
  • The city is a prime target for Baloch nationalist insurgents. Hence Pakistan has decided to fence the area.
  • This has sparked a new furore among the local residents.

India’s concerns with CPEC

  • CPEC passes through Pakistan-Occupied Kashmir (Gilgit-Baltistan) which is an Indian territory illicitly occupied by Pakistan.
  • Thus CPEC undermines India’s strategic interests and territorial integrity.
  • More importantly, with CPEC, China will get access to the western Indian Ocean through Gwadar port.
  • This will help China in controlling maritime trade and would affect the freedom of navigation and trade-energy security of India.

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