Commentary

India Quarterly
CPEC, Afghanistan 75(2) 253–261, 2019
© 2019 Indian Council
and India’s Concerns of World Affairs (ICWA)
Reprints and permissions:
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DOI: 10.1177/0974928419841790
journals.sagepub.com/home/iqq

Manish
Prashant Kaushik

Abstract
This paper highlights China’s views regarding CPEC and argues that stakes are
very high for China in CPEC, and it is a project that must succeed if BRI is to
go down in history as a success. However, CPEC’s success cannot be ensured
without responding to the security challenge present in Pakistan and Afghanistan,
which has the potential to jeopardise the CPEC and as a result the entire BRI.
Hence, China is required to engage with both Pakistan and Afghanistan to ensure
the long-term security of the CPEC. Building of CPEC and its further extension
leaves India with limited options but augmenting economic, political and security
concerns.

Keywords
India, China, Pakistan,   Afghanistan, CPEC, BRI, significance, concerns

Introduction
The aim of this article is to understand how China looks at the China–Pakistan
Economic Corridor (CPEC) in relation to the Belt and Road Initiative (BRI) and
India’s concerns thereof. This article argues that China has a high stake in CPEC,
and to a great extent success of BRI is conditioned upon the success of CPEC.
However, CPEC’s success cannot be ensured without tackling the security
loophole in Afghanistan–Pakistan (Af–Pak) border and docking the development
strategies of Pakistan and Afghanistan with that of China. All this leaves India
with ever augmenting economic, political and security concerns.
The Silk Road Economic Belt (丝绸之路经济带) and the twenty-first Century
Maritime Silk Road (21世纪海上丝绸之路), popularly known as ‘One Belt One
Road’ (OBOR) or the BRI was first proposed by Chinese President Xi Jinping in

Corresponding author:
Manish.
E-mail: manish@cug.ac.in
254 India Quarterly 75(2)

September–October 2013. Today, the initiative has turned into a concrete reality
as ‘China’s top-level cooperation initiative’ (‘国家级顶层合作倡议’). As a
symbol of its acceptability, the initiative has found mention in resolutions and
declarations passed by the United Nations, Forum on China–Africa Cooperation,
Shanghai Cooperation Organisation, Asia–Europe Meeting and so on. (王毅,
2019). China has become the second largest investing country in the world for the
first time through investing in host of BRI projects overseas.1
The scope, reach and duration of the initiative hardly leaves any doubt that it is
the ‘project of the century’ (世纪工程) which China has come up with in order to
realise the long cherished Chinese Dream of the great rejuvenation of the Chinese
nation, that is, to build China into a ‘a great modern socialist country that is
prosperous, strong, democratic, culturally advanced, harmonious, and beautiful’
by 2050 when the People’s Republic of China will mark its centenary (杜德斌，
马亚华, 2015).

CPEC:The Corridor Which Must Not Fail

As one of the most important connectivity corridors of BRI, the CPEC has
emerged as its ‘strategic flagship project’ (战略旗舰项目) (李希光, 2017).
Spanning over 3,000 km, the US$62 billion2 corridor connects the Silk Road
Economic Belt in north at Kashgar, Xinjiang with the Twenty-First Century
Maritime Silk Road in south at Gwadar Port, Balochistan. Proposed in May 2013
by Chinese Premier Li Keqiang, during his visit to Pakistan, CPEC in fact predates
the announcement of the BRI.3 It aims at enhancing regional connectivity by
building a web of roads, railways, air routes, oil and gas pipelines, optical fibre
cables and power plants. China and Pakistan have set the ‘1+4 cooperation model’,
where CPEC is the core and Gwadar, energy resources, transport infrastructure
and industrial cooperation are four fundamental points which will jointly work to
boost trade and investment, establish special economic zones, industrial parks,
trade centres and develop energy and technology cooperation. As the ‘game
changer’, the corridor aims to help Pakistan become an ‘Asian Tiger’ and change
Gwadar into an international trade and logistics centre and a free trade zone.
Undoubtedly, CPEC is rooted in the extremely special and unique Sino-Pak
partnership. China has established 12 types of partnerships with more than 90
countries in the world, but the state-to-state relationship between China and
Pakistan is the number one and the closest partnership, called the ‘all-weather
strategic partnership’ (‘全天候战略合作伙伴’). Pakistan is often referred to as
the ‘Pak iron’ (‘巴铁’) in China, underscoring the ‘iron-solid Sino-Pak friendship’
(陈文玲, 2018a). As a result, there is a consensus between China and Pakistan that
deepening of China–Pakistan economic and trade cooperation and construction of
CPEC is in tandem with the long-term development interests and strategic
interests of the two countries (2017). The completion or near-completion of 20 of
the 30 high priority first phase projects of CPEC, also called the ‘early harvest’
projects, stand testimony to the above consensus (李青燕, 2018). The long-term
plan for CPEC (2017–2030) released in December 2017 clearly highlights that
Manish and Kaushik 255

CPEC aims to achieve a medium to long-term synergy between China’s regional

plan and Pakistan’s national strategy. The important role played by CPEC in
boosting Pakistan’s economic development has already become apparent. In the
2016–2017 fiscal year, Pakistan’s GDP grew by 5.28 per cent, a new high in the
past decade. Given the CPEC impetus, Pakistan has become China’s largest
investment destination in South Asia. By the end of 2017, China’s direct investment
stock in Pakistan was US$5.71 billion and China’s direct investment in Pakistan
in the 2017–2018 fiscal year was US$1,585.8 million, up 30.9 per cent year-on-
year, accounting for 57.3 per cent of the foreign investment in Pakistan and
ranking the first in Pakistan’s source countries of foreign investment for 5
consecutive years (2018).
The initial success achieved by CPEC is in sync with the role China expects it
to play. China believes that on its completion CPEC will have immense location
specific advantages, passing through Afghanistan, Iran and Turkey it will link
China with Europe through a network of roads and railways, provide access
to Indian Ocean for China and other land locked countries in Central Asia and
will become a huge southbound economic corridor to Indian Ocean after joining
the Bangladesh–China–India–Myanmar (BCIM) and the Twenty-First Century
Maritime Silk Road. Lying opposite the Djibouti port and facing the Strait of
Hormuz, the Gwadar port will form the land sea connection point for a continuous
land route for the cargo coming from Africa and West Asia (陈文玲, 2018b).
Alignment of CPEC with its ‘strategy of development of the western regions’ (西
部大开发战略) will help China solve the domestic challenge of regional economic
imbalance. Hence, CPEC has the potential to become a huge transportation hub
linking China to Central, West Asia, North Africa and Europe. If Pakistan
successfully completes transport infrastructure and its industry is laid out
accordingly, it will also become a new economic development centre and three-
dimensional transportation hub in Asia.
Hence, the CPEC could serve as a ‘model’ where Pakistan could act as a
‘fulcrum’ which will integrate into the larger BRI on its completion and have far-
reaching demonstration effect (李诗隽, 2015). The stakes are very high for China
because as the flagship project of BRI, CPEC’s failure will create suspicions
about the feasibility of BRI, which ultimately may also shatter China’s aspiration
to play a greater role in world politics (叶海林, 2017). Thus, for China the CPEC
‘must only succeed and must not fail’ (‘只许成、不许败’).
Given the stakes China also vigorously refutes any idea that CPEC is a ‘debt
trap’ for Pakistan. Huang Renwei argues that various industries are investing in
Pakistan and not providing any aid. Investment, Huang says, is not only supposed
to make profit but also drive local development. Building of power plants under
CPEC will increase the electricity production which in turn will boost Pakistan’s
industrial capacity, create jobs, increase tax revenue and provide financial
resources. The wealth generated by CPEC will far exceed the initial investment
once it starts driving the economic development. Hence, instead of being worried
about the ‘debt trap’, Pakistanis are more concerned about deriving maximum
benefit out of it (黄仁伟, 2018).
Chen Wenling argues that the criticism of CPEC as a ‘debt trap’ looks at
Pakistan’s GDP of $300 billion a year today. Undoubtedly, Chen says, the recovery
256 India Quarterly 75(2)

of investments worth US$60 billion or repayment of any debt based on present

GDP would take many years. But the proponents of ‘debt trap’ ignore several
important points. First, 40 years ago China’s GDP was US$268.3 billion, far less
than of US$300 billion of present-day Pakistan, but today China’s GDP is
US$12.26 trillion. Hence, once Pakistan develops, its GDP will also increase.
Hence, investment by Chinese industry in Pakistan looks at Pakistan’s future and
its huge market potential. Second, the criticism ignores the composition of the
US$60 billion, which is the sum of all the projects in Pakistan that need to be
invested and not the actual investment. Moreover, among all the money in place,
the most important is corporate investment, which cannot be called debt. Pakistan’s
total debt is US$20 billion. In today’s world every country owes debt, including
China. Thus, making fuss of Pakistan’s debt by western media and portraying
China as a ‘debt exporter’ smack of ulterior motives (陈文玲, 2018a).
Nevertheless, the friendship between China and Pakistan remains ‘strong
politically and weak economically’ (‘政治强，经济弱’). Despite having a
free-trade agreement and bilateral investment treaty since July 2007 and September
1990 respectively, the bilateral trade between China and Pakistan stood at US$13.2
billion in 2017–2018, accounting for 16.4 per cent of Pakistan’s total trade
volume. Liu Ying argues that CPEC faces huge economic risks as far as investment
returns and exchange rates are concerned. The market exchange rate between
RMB and Pakistan rupee does not exist, and the local currency settlement of
China–Pakistan trade is still done through the US dollar. Construction of CPEC
also faces the risk of delayed payment. Pakistan’s domestic foreign exchange
reserves are low, its foreign debt is high and its ability to withstand external risks
is not strong. Pakistan’s foreign exchange reserves stand at less than US$8 billion,
which is far lower than the US$13.7 billion foreign exchange reserve adequacy
index, and the country urgently needs about US$12 billion to service foreign
debts and pay for imports. Hence, Pakistan’s currency faces the risk of devaluation
and the Chinese are required to be on guard against any such eventuality
(刘英, 2015).
In addition to economic risks, CPEC also faces huge security challenge along
the Af–Pak border and from volatile situation in Afghanistan. Balochistan, where
Gwadar is located, is a hotbed of Baloch insurgency and shares a long and
contested border with Afghanistan where insurgents of various affiliations take
refuge (姚远梅, 2015; Yao, 2016).The impending US withdrawal from Afghanistan
furthermore portend formation of a security vacuum and the struggle between
various contenders to fill it in the region. As the CPEC just cannot bypass the
Af–Pak border, it becomes imperative for China to bring both Pakistan and
Afghanistan on board to effectively safeguard the CPEC to ensure long-term
success of the BRI.

Afghanistan: At the Crossroad of ‘the Belt’

Owing to its geographical location as a link between the East and the West and
huge mineral wealth (2014) Afghanistan occupies significant position in the entire
Manish and Kaushik 257

gamut of BRI (李青燕, 2018). As Hu Zhiyong argues, China attaches immense

strategic value to CPEC’s extension to Afghanistan. Such an extension, first,
could align the development strategies of Pakistan and Afghanistan with China’s
BRI and strengthen trilateral cooperation. In the long run, Afghanistan can
gradually link up with the China-central Asia-west Asia economic corridor.
Second, it can enhance the demonstration effect of BRI, thus encouraging other
countries to join the initiative. Third, CPEC can stand a chance to become the
important driver of regional integration bringing together western region of China,
south Asia, central Asia, west Asia, north Africa and other countries through
economic and energy cooperation, thus creating economic resonance and
strengthening Pakistan’s strategic position as a bridge and link between Eurasia
and Africa. Fourth, it can highlight China’s growing role in global hot spots. Thus,
strengthening China’s role as a responsible major country and its policy of ‘being
a good neighbour and partner’ (‘与邻为善、以邻为伴”的周边外交方针’).
It can help China ease and reduce the contradictions and differences between
Afghanistan and Pakistan, enabling them to jointly deal with extremism and
fight terrorism. Extension of CPEC to Afghanistan has the potential to improve
the lives of Pashtuns living on the Af–Pak border and improve the deteriorating
security situation. Fifth, it can promote mutually beneficial and win-win globali-
sation through improvement in infrastructure construction and connectivity which
can meet the needs of local economic development, improvement of people’s
livelihood and national transformation (胡志勇, 2018).

India’s Concerns
The US drawdown from Afghanistan and China’s growing influence in its western
neighbourhood is augmenting India’s concerns. India has consistently opposed
CPEC because it violates its territorial sovereignty and poses serious security
challenges. Moreover, ever since the fall of Taliban regime, India has been trying
to cultivate its economic and political influence in the country which Pakistan has
considered its sphere of influence. For more than a decade of political and
economic engagements with Afghanistan, India now faces China as a major
challenge in the form of the extension of its ambitious CPEC. India’s concerns
range from economic to political to security.
First, the Chabahar Port. The foremost concern with Afghanistan joining CPEC
is that India is apprehensive of its investment in Chabahar port in Iran. India is
wary of undermining of the India–Iran–Afghanistan trilateral agreement that
gives Afghanistan access to sea via Chabahar port. Afghanistan shifted majority
of its cargo traffic from Pakistan’s Karachi port to Chabahar and Bandar Abbas in
Iran after the inauguration of Chabahar port. Afghanistan’s chief executive
Abdullah Abdullah also stated that Afghanistan is no more dependent on Pakistan.
Through the trade and development using Chabahar port, India is expecting to
mark its strong presence in Afghanistan which is likely to be undermined if
Afghanistan joins the CPEC. If Afghanistan joins CPEC, there are railroads and
energy transmission projects that China is considering such as Turkmenistan–
258 India Quarterly 75(2)

Afghanistan–Pakistan energy transmission line and a motorway or rail connection

from Peshawar in Pakistan to Kunduz in Afghanistan, motorway project between
Peshawar and Kabul, a road link between Torkham and Kabul to join an existing
road with Pakistan, railway lines already under consideration include one linking
Pakistan’s Landi-Kotal with Afghanistan’s Jalalabad and another from Pakistan’s
Chaman to Afghanistan’s Spin Boldak. With better rail and road connectivity to
Gwadar with Afghanistan India’s concern is the possibility of Chabahar losing its
significance.
Second, weakening of economic influence. Inclusion of Afghanistan in CPEC
is touted as a move that will benefit all the actors including India. There is a notion
that improved infrastructure and security situation in Afghanistan will not only
help it, but also other states such as India to conduct its economic and trade
activities in a smoother way. However, attempts to extend CPEC to Afghanistan
may undermine India’s position as economic, security and strategic partner of
Afghanistan. Indian investments in Afghanistan have earned considerable
goodwill for India. Since the ouster of the Taliban regime, India has been the
biggest regional donor to Afghanistan committing more than US$2 billion for the
developmental work that includes construction of roads, power plants, dams,
parliament building, rural development, education, infrastructure and much more.
India and Afghanistan have strong security and strategic partnership which are
evident from the fact that India is one of the major destinations for the training of
Afghan security forces. With all the developmental work in Afghanistan, India
remains Kabul’s loyal and best friend in the region. However, China is willing to
play a leading role in Afghanistan overpowering India’s economic influence in
Afghanistan. China is quite ahead of India when it comes to economic aid and
loans. While India’s intentions in Afghanistan are aimed at the overall development
of the country with strengthened democratic institutions, China is driven by its
economic and strategic self-interests. In the near future, China’s economic
assistance to Afghanistan is likely to rise. In this way, China is looking to counter
and limit India’s economic influence and primacy in Afghanistan post-US
withdrawal.
Third, terrorism and strategic concerns. China considers India as a geopolitical
rival and a South Asian power and has tried to contain India continuously. Along
with that, due to the eternal rivalry between India and Pakistan, India finds
Afghanistan, along with Iran, as one of the most vital countries providing access
to central Asian republics. India’s effective use of Afghanistan posits a threat to
China’s geopolitical ambitions and India’s growing ties with the US augment
China’s concerns. This is perhaps the reason India has not been included in the
foreign ministers’ trilateral dialogue between China, Pakistan and Afghanistan in
2017. By keeping India away from Afghanistan, China signalled its intention to
play a dominant role in Afghanistan. However, it is not easy for China to
completely snub India since China and India both have a common problem in the
form of Islamic terrorism. For the success of CPEC in Afghanistan and to a large
extent in Pakistan’s troublesome territories, it becomes imperative for China to
stabilise the security situation in the region. To achieve this, China requires
Pakistan and Afghanistan to reconcile their differences and also take Taliban on
Manish and Kaushik 259

board. While it is not hidden that Pakistan has been using Taliban to target Indian
interests in Afghanistan, reconciliation with Taliban will undermine India’s efforts
to help Afghanistan deal with Taliban. American and Chinese decision to hold
talks with Taliban for a political solution is again a setback for India. There is a
realisation both in the USA and China that peace in Afghanistan is possible only
when Pakistan is taken on board and this is not good news for India who blames
Pakistan for the instability and targeting of Indian interests in Afghanistan.
However, Taliban has said that it counts as a friend and a partner in developmental
work in Afghanistan. However, this is not enough to allay India’s concerns.
Though India has its own apprehensions about China’s willingness to curb
terrorism owing to China blocking Indian counter-terrorism attempts in the past,
in case of Afghanistan, China is more likely to be supportive of anti-terror
campaigns due to the huge Chinese investments at stake thus helping India.
Afghanistan’s inclusion in the CPEC will definitely help in the economic
development, but it will also help Pakistan gain the strategic advantage and upper
hand in Afghanistan at the cost of India. Since Pakistan plays a central role in
CPEC, its extension to Afghanistan will consolidate its position as compared with
India.
The CPEC has given China a chance to project its political and economic
influence in Afghanistan which worries India. Even though India enjoys
considerable goodwill in Afghanistan, India has not been able to establish a
working relationship with different warring factions in the country. Unlike India,
China has been successful in negotiating with Taliban. As seen in the visit of
Taliban delegation to Beijing in Dec 2014. On the other hand, India has not been
able to project its political influence on various Afghan factions. An example of
this is India’s inability to negotiate with Taliban at the time of Indian Airline
Flight 814 hijacked in 1999. India’s this failure in the post-Taliban years has led
to drifting away of different political factions in Afghanistan from India. China,
along with Russia, has actively engaged with Taliban and other factions in search
of peace process. While India has limited itself to providing economic assistance
and executing its investments in Afghanistan, China has done much more than
that. It has established bilateral security cooperation with Kabul and is involved in
conducting the trilateral dialogue with Pakistan, Afghanistan and China.
Given India’s limited strategic depth in Afghanistan and China’s growing
strategic footprint as well as China’s influence on Pakistan, China is in better
position to leverage its advantages in Afghanistan. The chokehold of realist
thinking of zero-sum mentality is here to stay in foreseeable future on China,
India and Pakistan, where China constantly plays the Pakistan card against India
and Pakistan keeps denying land access to India. India remains wary of grand
connectivity designs of China and has not shown willingness to join any time
soon. The US drawdown from Afghanistan and the corresponding vacuum that it
is creating is leaving the field wide open for all the players and stakeholders,
including India, in the region. The options available can broadly be summed up in
terms of cooperation and another round of great game. While cooperation among
all the stakeholders does hold some promise for the betterment of the region,
another round of great game, as history has shown it, is bound to prove beneficial
to none.
260 India Quarterly 75(2)

Conclusion
The high stakes involved in CPEC and the close alignment of its development
strategy with BRI have entwined China in Pakistan like never before. China
firmly believes that it must work to make CPEC a success, otherwise the entire
BRI stand the risk of unravelling. The need to ensure BRI’s success and US
withdrawal from Afghanistan are creating conditions for China to utilise its
considerable clout in Pakistan to bring peace and stability to the region. On the
other hand, India’s concerns are augmenting. While Pakistan remains eternal
hurdle, Chinese involvement in Afghanistan affairs is creating new obstacles.
However, the silver lining is that India and China are perhaps realising the
relevance of cooperation in dealing with the regional hotspots as seen in the
consensus reached on starting the joint training programme for Afghan diplomats.

Manish is Professor and Dean, School of International Studies, Central University

of Gujarat, Gandhinagar, Gujarat, India.

Prashant Kaushik is Assistant Professor, Centre for Chinese Studies, Central

University of Gujarat, Gandhinagar, Gujarat, India.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research,
authorship and/or publication of this article.

Funding
The authors received no financial support for the research, authorship and/or publication
of this article.

Notes
1. According to the World Investment Report 2017, FDI outflows from China have
reached US$183 billion making it the second largest investing country in the world for
the first time (2017).
2. China had initially proposed to invest US$46 billion in CPEC but first raised the amount
to US$55 billion and then to US$62 billion in January and April 2017, respectively.
3. The genesis of CPEC can be, in fact, traced back to Pakistan’s long cherished desire
to develop an additional deep-sea port at Gwadar to decrease its dependence on its
only port at Karachi and Pakistan’s desire to serve as China’s energy corridor. See
account given by Lu Shulin, former Chinese ambassador to Pakistan, 陆树林 (2018)
and ‘Musharraf promises to make...’ (2006).

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