{"id":5190,"date":"2022-11-03T00:00:00","date_gmt":"2022-11-03T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/03-11-2022\/china-pakistan-economic-corridor-cpec\/"},"modified":"2025-08-05T17:56:27","modified_gmt":"2025-08-05T12:26:27","slug":"china-pakistan-economic-corridor-cpec","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/03-11-2022\/china-pakistan-economic-corridor-cpec","title":{"rendered":"China-Pakistan Economic Corridor (CPEC)"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">In a reference to <strong>China\u2019s Belt and Road Initiative (BRI)<\/strong>, at a virtual meeting of the <\/span><span style=\"color: #1155cc;\"><strong><a href=\"https:\/\/www.nextias.com\/blog\/shanghai-cooperation-organisation\/\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/blog\/shanghai-cooperation-organisation\/\">Shanghai Cooperation Organisation (SCO)<\/a><\/strong><\/span><span style=\"color: #000000;\">, India\u2019s External Affairs Minister recently reiterated that <strong>connectivity projects (China-Pakistan Economic Corridor (CPEC) should respect sovereignty and territorial integrity.<\/strong><\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>About<\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The External Affairs Minister also pitched for more trade through Iran\u2019s Chabahar port and the International North South Transport Corridors (INSTC) that India is a part of, aiming to improve bilateral trade with Central Asian countries.&nbsp;<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>About China-Pakistan Economic Corridor (CPEC)<\/u><\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Launched in 2015<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">, the CPEC is the flagship project of the multi-billion-dollar <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Belt and Road Initiative (BRI)<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">, a pet project of Chinese President Xi Jinping, aimed at enhancing Beijing\u2019s influence around the world through China-funded infrastructure projects.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>3,000 km-long China\u2013Pakistan Economic Corridor (CPEC) <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">consists of highways, railways, and pipelines.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">CPEC eventually aims at linking the city of Gwadar in South Western Pakistan to China\u2019s North Western region Xinjiang through a vast network of highways and railways.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The proposed project will be financed by heavily-subsidised loans that will be disbursed to the Government of Pakistan by Chinese banks.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Significance<\/u><\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The agreement is aimed at boosting Chinese investment in Pakistan as well as transferring Chinese industrial capacity.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The framework will promote industrialisation and development of economic zones, and initiate, plan, execute, and monitor projects, both in the public as well as the private sectors.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The corridor links Xinjiang with Gwadar and also passes through Pakistan-occupied Kashmir (PoK) where China is investing in a number of projects.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">CPEC\u2019s early-harvest projects had transformed Pakistan\u2019s economic landscape, thus laying a solid foundation for sustainable economic growth.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Challenges Associated with the Plan&nbsp;<\/u><\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Delays in execution:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> The CPEC projects were also facing delays because of the change in taxation policies by the last government in violation of commitments given to China.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Pakistan\u2019s failure:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> The Chinese authorities were irritated because of Pakistan\u2019s failure to honour its contractual obligations under the CPEC framework.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Financial crisis:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> China is also concerned over the acute financial crisis faced by Pakistan, prompting it to step in periodically to bail it out with induction of foreign exchange loans.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Pakistan was a critic of the China Pakistan Economic Corridor (CPEC) earlier for its<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong> secrecy and uneven investments<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> neglecting certain provinces of the country.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">India has protested to China over the CPEC as it is being laid through the Pakistan-occupied Kashmir (PoK).<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">A report by US-based international development research lab AidData said that a substantial chunk of Chinese development financing under the CPEC consists of loans that are at or near commercial rates as opposed to grants.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Lack of transparency:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> As much as 40 percent of China\u2019s lending to Pakistan does not appear on the government\u2019s books.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Laxity:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> The project is behind schedule and only three of the total 15 projects announced have been completed so far.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>China\u2019s debt trap policy:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> 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.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>India\u2019s Concerns<\/u><\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Violation of Indian Sovereignty:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The project violates the sovereignty of India as it passes through Pakistan-occupied Kashmir (PoK), which is a disputed territory between India and Pakistan.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">As per well-established international conventions, no construction is allowed in any disputed territory, without taking the other country into confidence.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Exploitation of Natural Resources:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Under CPEC, China plans to build two mega-dams on the Indus, named Bunji Dam and Bhasha Dam.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">This will put a heavy strain on the Indus Water Basin.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Security Concerns for India:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Increase in China\u2019s Activities in IOR:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">With Gwadar being a part of CPEC, India fears an escalation of PLA Navy activities in the Indian Ocean Region (IOR).&nbsp;<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Threat to Indian Trade and Connectivity:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Majority of Indian tangible imports pass through the Strait of Hormuz.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">China can easily create impediments to its access to the Middle-east in case of a conflict, jeopardizing India\u2019s energy security.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Enhanced threat from Pakistan:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">With the overhauling of the Karakoram Highway, Pakistan will enjoy an advantage in mobilizing troops as well as heavy military equipment to PoK.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">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.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Way Ahead<\/u><\/strong><\/span><\/span><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Maintain Communication:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Experts have advocated that India maintain communication and cordial relations with its neighbours.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">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.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>International Collaboration:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">It is well settled that India cannot compete with China in the matter of financing developmental projects like CPEC in other developing countries.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">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.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Security Concerns:&nbsp;<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Developing countries, especially the countries of Southeast Asia have pinned their hopes on India to counter China\u2019s hegemony in the region.&nbsp;<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Here, India needs to build on alliances like Quad to maintain the balance of power in the Indo-pacific region.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Source<\/strong><\/span><\/span><\/span><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: <\/span><\/span><\/span><a style=\"text-decoration: none;\" href=\"https:\/\/indianexpress.com\/article\/explained\/china-belt-and-road-initiative-india-position-explained-8244276\/\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #1155cc;\"><u>IE<\/u><\/span><\/span><\/span><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News About About China-Pakistan Economic Corridor (CPEC) Significance Challenges Associated with the Plan&nbsp; India\u2019s Concerns Way Ahead Source: IE<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[56,30],"class_list":["post-5190","post","type-post","status-publish","format-standard","hentry","category-current-affairs","tag-agreements-involving-india-or-affecting-indias-interests","tag-gs-2"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/5190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=5190"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/5190\/revisions"}],"predecessor-version":[{"id":50326,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/5190\/revisions\/50326"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=5190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=5190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=5190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}