Much has been written about the ongoing Chinese Pakistan Economic Corridor (CPEC) and how its completion will provide a major boost to the economy of Pakistan while ensuring the future economic growth of a resurgent China. The main challenge to the CPEC project given its benefits to China, currently emanates from the insecurities of United States. India, which unfortunately has an existential conflict with Pakistan and which therefore considers any benefit accruing to Pakistan as a zero sum game to itself has joined the US bandwagon (often exploiting the US concerns) in an effort to contain both China and Pakistan.
The main challenge to the CPEC project given its benefits to China, currently emanates from the insecurities of United States. India, which unfortunately has an existential conflict with Pakistan and which therefore considers any benefit accruing to Pakistan as a zero sum game to itself has joined the US bandwagon (often exploiting the US concerns) in an effort to contain both China and Pakistan.
While, the USA and China have a symbiotic economic relationship where the two economies are interdependent in a number of areas. Yet, despite the co-dependency, USA feels threatened by the growing economic power of China and fears its status as the superpower of the globe will be undermined -as is abundantly clear from the plethora of US strategic writings over the past one decade. The much-awaited visit of the Chinese president Xi Jinping to Islamabad, the capital city of Pakistan finally materialized on April 20, 2015. A number of memoranda under the umbrella of China-Pakistan Economic Corridor (CPEC) were signed for the construction of a network of highways, railways, and pipelines connecting Pakistan’s newly commissioned deep seaport of Gwadar with Kashgar in the northwestern province of Xinjiang in China.
Why China needs CPEC
China has agreed to invest a colossal sum of forty-six billion US dollars, (with additional commitments: around $51 billion) considered, hitherto, one of the largest investments by China in a foreign country. CPEC allows China to expand its trade and commerce sea lines of communications via the seaport of Gwadar in Pakistan. This will link the Chinese mainland with ports throughout the Middle East and coasts of Africa.
China mainly relies on the shipping route that pass through the Strait of Malacca and it takes some 45 days to reach Europe via the Middle East. CPEC will reduce that to 10 days.
The Peoples Republic of China (PRC) is second largest oil consumer and largest oil importer with the bulk of oil imports from the Gulf States and Africa. With expected oil consumption growing by 5.8 percent annually, the creation of new trade routes as envisaged in the CPEC is considered imperative for the continued growth and sustenance of the Chinese economy. It is a mega project and once on ground, the corridor would shorten the current sea routes from the Middle East and Africa considerably.
In terms of the trade route, China mainly relies on the shipping route that passes through the Strait of Malacca and it takes some 45 days to reach Europe via the Middle East. When the CPEC is completed, it would take approximately 10 days for Chinese shipments to reach their destination, as the Kashgar-Gwadar route will play a pivotal role in reducing the staggering amount of time and distance.
Pakistan won China’s goodwill when it supported PRC’s quest to replace Republic of China (Taiwan) as the true representative of the Chinese nation in the UN General Assembly.
Not only this, the reliance on the Malacca route would be significantly reduced, as it is already a potential flashpoint of blockade by the United States Pacific Command (USPACOM) in periods of major hostility.
In spite of CPEC’s clear commercial objectives, which are primarily to protect and expand China’s economy; USA views it with deep suspicion. The US Department of Defence explains it in terms of the ‘String of Pearls’ theory that refers to a network of Chinese military and commercial facilities and relationship along the sea lines of communication.
The military aspect of the String of Pearls theory has been refuted by China and questioned by some analysts who point to China’s strategic vulnerabilities, specifically in terms of its naval power which pales in front of its rival, the US Naval behemoth, which makes it very unlikely for China at this stage to undertake such a provocative naval initiative. Unfortunately, the String of Pearls theory has been accepted by the Indian military and its media.
How the Chinese evolved their relationship with Pakistan to achieve the new ‘Silk Road’
Zulfiqar Ali Bhutto, the young foreign minister of Pakistan under President Ayub Khan in the first half of the 1960s was the principal architect of the policy that propelled China-Pakistan friendship to new heights.
A commerce and trade corridor through Pakistan, reminiscent of the old Silk Road, one that would provide access to the warm waters of the Arabian Sea has have always been a high priority agenda for the Chinese since the country won its independence in 1949.
However, the formidable hurdle posed by the mighty Himalayas and the lofty Karakorum that formed a land barrier between the two countries, the lack of political and economic might of the PRC as it struggled to establish and regain its past glory and status as an empire and major player in the world scene did not permit realisation of the new Silk Road dream. The vision was not discarded but put on the backburner and necessary steps related to capacity building to undertake such a gigantic project were put in motion.
The CPEC aims to expand the Chinese trade and commerce sea lines of communications via the seaport of Gwadar in Pakistan that would link the Chinese mainland with ports throughout the Middle East and coasts of Africa.
For the new Silk Road to become a reality, as a first step, China needed to establish a cordial and friendly relationship with Pakistan. Pakistan during the 1950s was firmly in the US camp as an active member of CENTO and SEATO whose primary objectives were to contain the Communist threats posed by both the USSR and China. Despite these very hostile conditions, Sino-Pak relationship survived partly because India was viewed as a common adversary.
Pakistan won China’s goodwill when it supported PRC’s quest to replace Republic of China (Taiwan) as the true representative of the Chinese nation in the UN General Assembly. In the Indo-Chinese War of 1962, Pakistan’s sympathy lay with China. The subsequent Sino-Pakistan Boundary Agreement that was signed by the two sovereign states in 1963 resolved the border disputes between China and Pakistan in Northern Kashmir and Ladakh regions. These agreements – based on old British memoranda and agreements with Chinese; accepted by Pakistan – are classic examples of rational boundary settlements between two states. These further cemented the bonds between the two nations: Pakistan & China.
During the Indo-Pak War of 1965, China played a crucial role in support of Pakistan. Besides the diplomatic and moral support, the Chinese military threats to India across the Himalayas had prevented the latter from withdrawing its forces from the mountains to deploy them against Pakistan. Post-war, China’s unconditional military aid to Pakistan when the latter was reeling because of the crippling US arms embargo cemented the relationship to an extent where China became the staunchest ally of Pakistan and has remained so to date.
Zulfiqar Bhutto helped take relationship to new levels
Zulfiqar Ali Bhutto, the young foreign minister of Pakistan under President Ayub Khan in the first half of the 1960s was the principal architect of the policy that propelled China-Pakistan friendship to new heights. The relationship has continued to grow since then and today China is considered as the only reliable all weather friend of Pakistan.
Any access to the warm waters of the Arabian Sea had to overcome the formidable Karakorum and Himalayan ranges that separated the Chinese mainland from the Indian subcontinent. In 1958 a modest project Indus Valley Road (IVR) was initiated to provide an all-weather road link between Swat and Gilgit. In 1966 under a Sino-Pak agreement, IVR was upgraded to Karakorum Highway (KKH), aka Friendship Highway.
It aimed to connect the Chinese northwestern province of Xinjiang with Gilgit-Baltistan of Pakistan across the Karakorum mountain ranges via the Khunjerab Pass, tracing one of the many paths of the ancient Silk Road. The project was completed in 1978 by a joint Chinese-Pakistani effort and over 800 Pakistanis and 200 Chinese workers and engineers lost their lives in the process. KKH is regarded as the Eighth Wonder of the World. With its completion, the most difficult portion of the new Silk Road project had been surmounted.
Changing fortunes of the USA and China
By 2013, PRC’s economy had leapfrogged to become the second largest economy just behind that of USA. China over the past two decades has amassed a very healthy cash surplus, mostly in the shape of US treasury bonds amounting to over a trillion and a total of about four trillion US dollars that it could easily employ to further its economic and geostrategic interests in the region and beyond.
USA, the sole superpower in the meanwhile is witnessing a waning ability in its effort to control world events, despite still fielding the strongest military force in the world by a wide margin. The decline has been exacerbated because of the fiasco suffered due to the Iraqi invasion and the unsuccessful Afghanistan venture.
Karachi and Port Qasim (adjacent to Karachi) seaports were the only Pakistani harbors in Arabian Sea that were operational in 1978. The two were saturated and had limited scope for further expansion. Gwadar in the coast of the Baluchistan province despite having the potential of being developed as a deep seaport was only a fishing harbour then.
Gwadar’s vantage point
The port will be strategically important for China as sixty percent of China’s oil comes from the Persian Gulf by ships travelling over 16,000 kilometres in two to three months, confronting pirates, bad weather, political rivals, and other risks up to its only commercial port, Shanghai.
Gwadar is located on the shores of the Arabian Sea in Pakistan’s western province of Balochistan. It is about 533 km from Karachi and 120 km from the Iranian border and 380 km northeast of the nearest point in Oman across the Arabian Sea. Placed at the mouth of the Persian Gulf, just outside the Strait of Hormuz, near the key shipping routes in and out of the Persian Gulf, it has a natural hammerhead-shaped Peninsula protruding into the Arabian Sea from the coastline.
The surrounding region is home to around two-thirds of the world’s oil reserves. Along with Chabahar seaport of Iran it is the nearest warm-water deep seaport to the landlocked, but energy rich, Central Asian Republics and landlocked Afghanistan.
Gwadar was identified by Pakistan as a potential seaport way back in 1954 when it was still under the Omani rule. After four years of negotiations, Pakistan purchased the Gwadar Enclave from Oman for $3 million on September 8, 1958 and Gwadar officially became part of Pakistan on December 8, 1958, after 200 years of Omani rule.
Musharaf Regime started Gwadar’s development
The decision to develop Gwadar as a modern deep seaport was taken during the rule of General Musharraf. An all-weather coastal highway linking Gwadar to Karachi was laid out by December 2004 and the first phase of making it into a deep seaport completed in December 2006. Following the completion of phase one the government of Pakistan signed a 40-year lease agreement with Port Authority of Singapore (PSA) for the development and operation of tax-free port and duty-free zone.
the reliance on the Malacca route would be significantly reduced, as it is already a potential flashpoint of blockade by the United States Pacific Command (USPACOM) in periods of major hostility.
The Wall Street Journal reported in September 2011 that Gwadar was doing little business as a commercial port and Pakistan had approached China to take over its operations. A year later China confirmed it would be taking over control of Gwadar as they believed it had the potential to be an oil pipeline hub for Chinese energy needs.
In February 2013, Gwadar port under an official government contract was handed over for expansion, operation and maintenance to the state-owned China Overseas Port Holdings Limited.
The port will be strategically important for China as sixty percent of China’s oil comes from the Persian Gulf by ships travelling over 16,000 kilometres in two to three months, confronting pirates, bad weather, political rivals, and other risks up to its only commercial port, Shanghai. With the expansion of Gwadar as a deep sea port, the requirement of a dedicated harbour to cater for the burgeoning sea trade needs of China has been successfully met.
The die has finally been cast and while major obstacles in the way of the project have been removed, serious internal and regional challenges – and decoupling of US fears and concerns from Indian strategies of proxy terrorism and poltical sabotage – still remain before the dream can be turned into a reality to benefit both countries.
With the Gwadar seaport becoming operational and being run and managed by a Chinese owned consortium, a robust economy, a very cordial relationship with Pakistan and the reduced ability of USA to intervene, the basic parameters for launching of the CPEC were finally in place. The CPEC announcement was planned in the autumn of 2014 but the political upheaval in Pakistan because of the joint PTI and PAT dharnas (sit-ins) delayed the event by about six months. The die has finally been cast and while major obstacles in the way of the project have been removed, serious internal and regional challenges – and decoupling of US fears and concerns from Indian strategies of proxy terrorism and poltical sabotage – still remain before the dream can be turned into a reality to benefit both countries.
Jamal Hussain, is an Author & Columnist and appears regularly on media as Defense Analyst. His latest book ‘Air Power in South Asia has been read widely in defense circles. He writes extensively on defense related issues in the Defence Journal (Pakistan), Probe Magazine (Bangladesh), major newspapers in Pakistan and is associated with the Naval Postgraduate School in Monterey, California, USA. He retired from the Pakistan Airforce as an Air Commodore in 1997.The views expressed in this article are the author’s own and do not necessarily reflect Global Village Space’s editorial policy.