China has recently demonstrated its reluctance to fund several Pakistan-requested CPEC projects, according to the minutes of a high-level meeting of CPEC’s decision-making body released in July, reported news website Deutsche Welle (DW).
The key reasons attributed to Beijing’s cold feet towards the economic corridor, designed to connect Pakistan’s Gawadar to China’s Xinjiang, are economic and security factors -★including China’s own economy, which remains in poor shape.
“The CPEC slowdown can be attributed to both economic and security factors. Pakistan’s worsening economic crisis, and China’s own recent slowdown, have dampened prospects for new projects,” Michael Kugelman, a South Asia expert at the Washington-based Woodrow Wilson International Center for Scholars, told DW.
The infrastructure project which Pakistan had hoped would change its economic fortunes was marred with several setbacks, including attacks on Chinese workers.
At least nine Chinese workers were killed in a “bomb attack” on a bus in northern Pakistan in 2021. The next year Chinese teachers were killed by a suicide bomber in Karachi, which Beijing called “an to undermine the China-Pakistan friendship”.
Outfits like Baloch insurgents, and the Pakistani Taliban (TTP) have further made the CPEC progress look bleak with their targeted attacks.
“Security risks are concerning to China because it is now confronting an expanding array of threats. China’s worries are compounded by Pakistan’s inability to put an end to these threats. In a worst-case scenario, China may be tempted to bring in its own security forces to protect Chinese assets, which could be politically damaging for Islamabad,” Kugelman told DW.
Meanwhile, political instability, particularly after the ouster of PTI chief Imran Khan, has added to the woes of the country’s effort to revive its economy due to a delay in the national election.
“Naturally as an external investor, China is worried about political stability because of the risk of unrest and violence that may pose a threat to its nationals and interests in Pakistan,” Kugelman was quoted as saying by DW.
“The political uncertainty, flowing from the lack of clarity about when or if the election will occur, is likely to worry China because it makes for a volatile combination of political uncertainty and instability,” the analyst further said.
Earlier, Beijing had turned down several of Islamabad’s proposals related to direct investments in multiple sectors under the China-Pakistan Economic Corridor (CPEC), including energy, tourism, water management and climate change.
The minutes signed in the meeting of the CPEC’s Joint Cooperation Committee (JCC) brought to the fore the formidable challenges both sides have been facing in deepening economic ties.
The JCC meet was held in October 2022 and its minutes were signed by the Chinese Vice-Premier and Pakistan’s former planning minister Ahsan Iqbal on July 31 this year. The draft shared with Beijing by Pakistan and the final minutes signed by both sides were different in many ways.
Details of the minutes reported by a local daily reveal that China had turned down cooperation in cross-border tourism in Gilgit-Baltistan (G-B), Khyber-Pakhtunkhwa (K-P), Pakistan-controlled Jammu and Kashmir and the country’s coastal areas.
Pakistan had proposed Chinese participation in a strategic underground gas storage project but it was not included in the final minutes. The minutes were also silent on a push to get Chinese technology for joint exploration, development and marketing of metallic minerals.
Summary:
★The China-Pakistan Economy Corridor (CPEC) is facing a stalemate as China is finding it difficult to fund Pakistan’s crumbling economy.
★China has shown reluctance to fund several Pakistan-requested CPEC projects due to economic and security factors.
★Attacks on Chinese workers and security risks have dampened prospects for new projects.
★Political instability and a delay in the national election have added to the challenges.
★Beijing has turned down several of Islamabad’s proposals for direct investments in various sectors under CPEC.
★The minutes of the CPEC’s Joint Cooperation Committee meeting highlight the challenges in deepening economic ties.
★China had turned down cooperation in cross-border tourism and a strategic underground gas storage project proposed by Pakistan.
Source: https://timesofindia.indiatimes.com/world/pakistan/china-pakistan-economic-corridor-enters-stalemate-as-beijing-finds-it-hard-to-fund-islamabad/articleshow/95047845.cms
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