BENAZIR BHUTTO SHAHEED UNIVERSITY LYARI, KARACHI, SINDH

Department of English
(11th Batch 2nd Semester)
Section - B
International Relations

FUTURE IMPACTS OF CPEC

Submitted By :
Zubair Baloch S/O Ayoub Gul
&
Zuhair Ahmed D/O Mansoor Ahmed
Submitted to :
 Sir Nisar Ahmed Chandio
INTRODUCTION

The China–Pakistan Economic Corridor (CPEC) is an economic route stretching from

western China through Pakistan to the Indian Ocean coast. It is part of China's Belt and Road
Initiative. The idea of the CPEC was combined plan of then President Asif Ali Zardari and
China. It is a collection of infrastructure projects that are under construction
throughout Pakistan since 2013. Originally valued at $47 Billion, the value of CPEC projects
is worth more than $70 Billion as of 2020. CPEC is intended to rapidly 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, while some
major power projects were commissioned by late 2017. Modern transportation networks built
under CPEC will link seaports in Gwadar and Karachi with northern Pakistan, as well as
points further north in western China and Central Asia. A 1,100-kilometre-
long motorway will be built between the cities of Karachi and Lahore as part of CPEC, while
the Karakoram Highway from Hasan Abdal to the Chinese border will be completely
reconstructed and overhauled. The Karachi–Peshawar main railway line will also be
upgraded to allow for train travel at up to 160 km per hour by December 2019. Pakistan's
railway network will also be extended to eventually connect to China's Southern Xinjiang
Railway in Kashgar. The estimated $11 billion required to modernise transportation networks
will be financed by subsidized concessionary loans. A network of pipelines to transport
liquefied natural gas and oil will also be laid as part of the project, including a $2.5 billion
pipeline between Gwadar and Nawabshah to eventually transport gas from Iran. Electricity
from these projects will primarily be generated from fossil fuels, though hydroelectric and
wind-power projects are also included, as is the construction of one of the world's largest
solar farms. Should the initial $46 billion worth of projects be implemented, the value of
those projects would be roughly equivalent to all foreign direct investment in Pakistan since
1970, and would be equal to 17% of Pakistan's 2015 gross domestic product. From the initial
project, the scope has expanded from a net worth of $46 billion to $60 billion according to
some sources. CPEC is seen as the main plank of China's paramount leader Xi Jinping's Belt
and Road Initiative.
Background

Chinese interest in Pakistan's deep-water harbor at Gwadar had been rekindled by in 2002
China began construction at Gwadar port which was completed in 2006. Expansion of Gwadar
Port then ceased thereafter owing to political instability in Pakistan following the fall of
General Pervez Musharraf and subsequent conflict between the Pakistani state and Taliban
militants. In 2013, the then Pakistani President Asif Ali Zardari and Chinese Premier Li
Keqiang decided to further enhance mutual connectivity. A memorandum of understanding on
cooperation for long-term plan on China–Pakistan Economic Corridor between the two
governments was inked by Xu Shao Shi and Shahid Amjad Chaudhry. In February 2014,
Pakistani President Mamnoon Hussain visited China to discuss the plans for an economic
corridor in Pakistan. Two months later, Pakistan Prime Minister Nawaz Sharif met with Premier Li
Kequiang in China to discuss further plans, resulting in the full scope of the project to be devised
under Sharif's tenure. In November 2014, Chinese government announced its intention to
finance Chinese companies as part of its $45.6 billion energy and infrastructure projects in
Pakistan as part of CPEC.

CPEC-Energy Priority Projects

1. Sahiwal Coal-Fire Power Plant Punjab

2. Coal-Fire Power Plants Port Qasim Karachi
3. HUBCO Coal Power Project Hub Balochistan
4. Engro Thar Coal Power Project Thar Sindh
4.1 Surface mine in block II of Thar Coal field, 3.8 million tons/year Thar Sindh
5. Quaid-e-Azam Solar Park Bahawalpur Punjab
6. Hydro China Dawood Wind Farm Ghari Sindh
7. UEP Wind Farm (Jhimpir, Thatta, Sindh)
8. Sachal Wind Farm (Jhimpir, Thatta, Sindh)
9. Three Gorges Second and Third Wind Power Project (Jhimpir, Thatta, Sindh)
10. SSRL Thar Coal Block-I 6.8 mtpa & Power Plant (Shanghai Electric) (Thar, Sindh)
11. HUBCO Thar Coal Power Project (Thar Energy) (Thar, Sindh)
12. ThalNova Thar Coal Power Project (Thar, Sindh)
 13. Karot Hydropower Station (River Jehlum)
14. Suki Kinari Hydropower Station (Naran, Khyber Pukhtunkhwa)
15. Matiari to Lahore HVDC Transmission Line Project (Sindh+Punjab)
16. Imported Coal Based Power Project (Gwadar, Balochistan)
17. Thar Mine Mouth Oracle Power Plant & surface mine (Thar, Sindh)

Positive Impacts
Boost to Economy:

The CPEC will show a major increase in Pakistan’s economy by increasing trade with China,
Central Asia, Russia, Middle East and Europe. Even within the construction phase and
completion of the CPEC there will be a visible economic growth in Pakistan by about 3
percent because of increase in industrial development due to the availability of resources.
Increase in Value of Land:

Between the construction phase of the CPEC and after the completion of CPEC route the
value of the land surrounding is improving significantly and is providing many commercial
opportunities  to owners and developers of the land.
Agricultural Growth:

Due to increase in the agricultural production Pakistan will observe a significant agricultural
growth with cooperation of China and sharing modern technology and strategies along with
our feasible weather conditions.
Increase in Foreign Investment:

CPEC will promote foreign investment in Pakistan, which will ultimately show increase in
our economic growth rate.
Increase in Import and Export:

Another major advantage would be increase in the trade from which revenue will be
generated, which will be earned from transiting goods to and from other countries.

Employment Opportunities:
CPEC would create employment opportunities for the local people to an extent of about two
to three million which will contribute a lot to economical condition of the Pakistan.
Increase in Tourism:

The CPEC would provide for ideal tourism conditions in Pakistan, facilitating the flourishing
of the tourism and hotel industry of Pakistan by providing a safe route and attractive
commercial activity around Gawadar city.
Enhance Pakistan’s International Stature:

Many regional and extra-regional countries will be joining CPEC; this will improve
Pakistan’s international stature, our contacts and will create an aura of peace and stability in
the region.
Improve Relationship with other Countries:

We can  guaranteed expect that South Asian countries will also prefer CPEC lead geo-
economics over geopolitics and  resolving  major disputes like Jammu & Kashmir will get
easier  and peace will be achieved successfully. This would also facilitate South Asia’s
interconnectivity and its connectivity with China, Central Asia, West Asia and Russia.
Strengthen Pak-China Bond:

The bond between Pakistan-China will be further strengthened and will help enhance
Pakistan’s defense capabilities. Pakistan-China’s defence agreements will increase and
having stakes in Pakistan’ security and stability, China will be standing with Pakistan in
troubled times.
Increase in Stability:

Major countries like Russia and some European powers will want to develop their
partnerships with Pakistan and play their part in contributing towards peace and stability in
South Asia hence further enhancing the stability in the region.
Strengthen Defense:

Pakistan will get an opportunity to import Defense technology from Western countries and
Russia to strengthen its defense.
CPEC will definitely bring vast strategic and economic advantages to Pakistan and regions
surrounding it. Not only will CPEC will be beneficial for the country but the citizen of
Pakistan will also be able to bear fruits of its development on individual level.

Negative Impacts
Pakistan’s economic sovereignty essentially mortgaged to China
The CPEC is based on a $46 Billion loan that Pakistan has taken from China. It is not a
FDI that China will recover from the proceeds of the CPEC. The success of CPEC
depends on China’s economy remaining successful and free of global sanctions to freely
move its goods to the rest of the world. This certainty has recently turned suspect under
the new US administration. What happens a when the CPEC fails to generate the
proverbial golden eggs? How does Pakistan propose to repay this loan?
Military sovereignty at risk too
China has sent a naval ship and other military assets to “safeguard” it investment. If the
port is in Pakistan and the ships are docked in Pakistan’s terrirotorial waters, what is
China protecting its investments against? It is doubtful that a boatload of armed
terrorists will arrive from Mumbai to indiscriminately shoot the Chinese or Pakistanis!
To a casual observer, it seems an awful lot like China is setting up a small naval base in
Pakistan to militarily control this part of the world.
China with the lions share
it is estimated that the movement of Chinese goods over the next decade will be $1
Trillion. And no, that is not a typo! All that business growth for China, while Pakistan
assumes all the risk and is liable for the $46 Billion loan. Suddenly the $46 Billion
seems like loose change, which it is for China. But it is a mountain of a loan for
Pakistan.
India conflict
Pakistan’s assertion of being a peaceful nation seeking friendly relations with its
neighbors is contradicted by this project, because this inevitably exacerbates conflict
with India. It is an unnecessary provocation with short term economic benefit and
appeasement of China in mind. It might have been more prudent to negotiate India’s
involvement and partnership into this venture - not as an afterthought as has been
demonstrated through some half hearted comments from vague unknown persons in
Pakistan - but as a truly well thought out venture that could wipe out the India enmity
and the risk of the venture in one master stroke. Very shortsighted indeed!
US relations
The US was not in good terms with China earlier under the Obama administration, and
the relationship has exponentially worsened under Trump. In fact, there is a real chance
of military conflict between the US and China. In an extreme scenario, China might
even implode and break apart like the erstwhile Soviet Union. In such an event, US’s
need-based “friendship” will evaporate very quickly for China’s allies and especially its
“"all weather friend”.
Balochistan
With its track record in corruption and catering to the powerful Pounjabi elites in
civilian and military circles, Pakistan is not expected to fairly distribute the riches of this
venture to its rightful recipients, including the Balochistan people. This will result is
further aggravation and disillusionment of this large province that is already trying to
break away from Pakistan. This is a tremendous opportunity to bring them back in the
fold, and away from Indian influence, and hopefully Pakistan will play its cards well.
Indigenous industry
China has an established track record of arriving much like a horde of locusts and
completely wiping out local indigenous industry. The floodgates to Pakistan have been
opened to the Chinese and it is just a matter of time before Chinese goods do the
Walmart-effect on Pakistani industry and destroy what is left of it. Perhaps Pakistan
could learn a lesson or two from neighbouring India’s "Make in India” initiative to not
only sustain local industry but also master strategic technology in house.
Environmental impact
A repeat of the point above, except China’s disregard for the environment and utter
destruction of ecological systems wherever its tentacles reach, are a sad eventuality of
letting China in.

References
wikipedia.org
cpec.gov.pk