China-Pakistan Economic Corridor (CPEC)


    In Context

    • Recently, India slammed the move by Pakistan and China to involve third countries in CPEC projects.

    More about the news

    • About:
      • China and Pakistan extended a welcome to any country joining the multi-billion dollar economic corridor for “mutual beneficial cooperation”.
      • This proposal was made at a meeting of the CPEC Joint Working Group on International Cooperation and Coordination (JWG-ICC)
    • India’s stand:
      • The Ministry of External Affairs has reiterated that the China-Pakistan Economic Corridor (CPEC) is an ‘inherently illegal, illegitimate, and unacceptable‘ endeavour, and any new nation participating in it would be infringing on India’s geographic sovereignty.
    • Significance:
      • The invitation by Pakistan and China to countries comes after reports emerged of the project stalling due to ground-level corruption, resistance by locals in places like Balochistan, and attacks on Chinese engineers and workers by Islamic fundamentalists and terrorists.

    China-Pakistan Economic Corridor (CPEC) 

    • About:
      • The CPEC is a collection of infrastructure projects that have been under construction throughout Pakistan beginning 2013
      • The CPEC is part of China’s larger Belt and Road Initiative, which aims to spread Chinese investments in trade and connectivity infrastructure to bring Central Asian and European markets closer.
    • Details: 
      • The CPEC is a 3,000 km route of infrastructure projects that seek to create a series of contiguous economic and trade hubs with road and rail infrastructure.
        • It will link places like China’s restive western province of Xinjiang Uyghur Autonomous Region and the new Gwadar port in Pakistan’s equally unquiet Balochistan state.
    • Funding:
      • Originally valued at $47 billion, the value of CPEC projects bumped up to $62 billion as of 2020. 
    • Mutual Benefit for China and Pakistan: 
      • For China, the project will bypass the Strait of Malacca, which can be a choke point in case of a conflict with the US or other adversaries. 
      • On the other hand, Pakistan expects CPEC to be a lifeline for its deteriorating economy, leading to a multiplier effect on production and employment generation and sustainable economic growth. 
    • Issues:
      • India’s position:
        • New Delhi has protested the project from its inception since it passes through large chunks of Pakistan-occupied Kashmir.
      • Laxity:
        • The project is behind schedule and only three of the total 15 projects announced have been completed so far.
      • China’s debt trap policy:
        • Critics also foresee that the weak economic indicators of Pakistan might lead to a possibility of the country defaulting on debt repayments, as Chinese loans have high interest rates.

    India’s Concerns

    • Violation of Indian Sovereignty: 
      • The project violates the sovereignty of India as it passes through Pakistan-occupied Kashmir (PoK), which is a disputed territory between India and Pakistan. 
      • As per well-established international conventions, no construction is allowed in any disputed territory, without taking the other country into confidence.
    • Exploitation of Natural Resources: 
      • Under CPEC, China plans to build two mega-dams on Indus, named Bunji Dam and Bhasha Dam
      • This will put a heavy strain on the Indus Water Basin.
    • Security Concerns for India: 
      • Increase in China’s Activities in IOR: 
        • With Gwadar being a part of CPEC, India fears an escalation of PLA Navy activities in the Indian Ocean Region (IOR). 
      • Threat to Indian Trade and Connectivity: 
        • Majority of Indian tangible imports pass through the Strait of Hormuz. 
        • China can easily create impediments to its access to the Middle-east in case of a conflict, jeopardizing India’s energy security.
      • Enhanced threat from Pakistan: 
        • With the overhauling of the Karakoram Highway, Pakistan will enjoy an advantage in mobilizing troops as well as heavy military equipment to PoK
        • At the same time, an increase in financial returns to Pakistan through CPEC may expand its ability to fund military infrastructure as well as state-sponsored terrorism in Kashmir, thus destabilizing the region.

    Way ahead

    • Maintain Communication: 
      • Experts have advocated that India maintain communication and cordial relations with its neighbors. 
      • In such a context, India has done well to keep participating in forums like Shanghai Cooperation Organization to maintain communication with both Pakistan and China.
    • International Collaboration: 
      • It is well settled that India cannot compete with China in the matter of financing developmental projects like CPEC in other developing countries. 
      • Therefore, it needs to collaborate with agencies like Japan International Cooperation Agency (JICA) to offer soft loans to save them from falling into the Chinese debt trap.
    • Security Concerns: 
      • Developing countries, especially the countries of Southeast Asia have pinned their hopes on India to counter China’s hegemony in the region. 
      • Here, India needs to build on alliances like Quad to maintain the balance of power in the Indo-pacific region.


    Pakistan Occupied Kashmir

    • History:
      • It is an area of 13,297 sq km, which was under the control of the Pakistani forces when the ceasefire line came into effect on January 1, 1949
        • That was after a 14-month period of hostilities between India and Pakistan, which began with an invasion of Kashmir by Pashtun tribesmen, and later its Army, to seize Kashmir.
      • In 1963, through an agreement, Pakistan ceded to China over 5,000 sq km of J&K land under its control, in the Shaksgam area, in northern Kashmir, beyond the Karakoram.

    • PoK has a population of over 40 lakh, according to a census carried out in 2017
    • It is divided into 10 districts: 
      • Neelum, Muzaffarabad, Hattian Bala, Bagh, and Haveli bordering areas in Kashmir, and Rawlakot, Kotli, Mirpur, and Bhimber bordering areas in Jammu. 
    • The capital of PoK: 
      • Muzaffarabad
        • It is a town located in the valley of the Jhelum river and its tributary Neelum (which Indians call Kishanganga) to the west and slightly north of Srinagar.


    Source: TH