The China-Pak Energy Corridor

China. What comes to mind when we think of this powerful country? The Great Wall, Chinese food, perhaps the Forbidden City or some other ancient stronghold. One thing that we do know about China however is its status as a world super power. Its economy is nothing short of astonishing and the People’s Republic armed forces are not to be taken lightly. Coupled with their very warm relations with Pakistan, these two countries are always on the verge of something ground breaking.

Such a plan was proposed during the Pakistani President’s (Mamnoon Hussain) visit to Beijing in the beginning of 2014. The three-day visit was Hussain’s first official trip abroad since assuming the presidency. During his visit, Hussain met with Chinese President Xi Jinping and Premier Li Keqiang in talks designed to underline the historically close ties between the two countries. “Friendship with China is the most important pillar of our foreign policy and security policy,” Hussain said just before his meeting with Xi.

Besides emphasizing China and Pakistan’s generally close ties, Hussain’s trip was focused on the new China-Pakistan Economic Corridor (CPEC) project. The idea was first proposed during a visit to Pakistan last May by Chinese Premier Li Keqiang. Hussain has embraced the idea as well, predicting that the “project is going to be a monument of the century. It will benefit not only Pakistan and China, but also the whole region with billions of people.”

An ambitious project such as this will no doubt be beneficial; as such the end goals are twofold. First, China envisions its western transportation networks as an alternate route for oil and other energy sources. The China-Pakistan Economic Corridor, for example, is expected to include construction of an oil pipeline from Gwadar’s port to northwestern China. Second, China’s western regions are underdeveloped compared to the eastern coastal areas. By focusing on westward trade, China hopes to spark a general economic boom in the western parts of the country, especially in Xinjiang province.

Pakistan will also benefit vastly. Firstly Pakistan’s 6% GDP loss because of a lack of power and infrastructure bottlenecks would significantly be addressed. As an estimate almost $46bn would be invested into the country, contrast that with a miserly $31bn invested in Pakistan by the United States since 2002 and that too two-thirds on security projects, and already things are looking up. The potential pressure on the external account can be mitigated, however, through some smart negotiations. Contracts signed with Chinese companies under the CPEC should emphasis the maximum possible use of local labor and maximum possible local procurement. This could generate greater employment opportunities for locals and better economic activity for domestic businesses. However we do know that ‘smart business’ isn’t really a strength of our government – nor a primary interest. But perhaps as a citizen who is hardly benefiting in the short run from such a project. The ray of light is the positivist this sort of news brings to our nation, and would encourage further positive development projects (hopefully) from companies all across the world. And if CPEC is handled with proper organisation and structure, the benefits for Pakistan and Pakistanis would be enormous.

There are also talks of China looking up to India, Bangladesh, and Myanmar to set up a “new silk road”, but as China Daily pointed out, increased economic interaction will also help support China and Pakistan’s longtime strategic and diplomatic cooperation. Should Pakistan reap the economic benefits of the new corridor, it could boost Islamabad’s regional power and prestige—and it can only help Beijing to see the influence of a long-time ally increase.

Clearly the People’s Republic would not want decades worth of work and trust turn sour. Coupled with India’s RAW and their desperate attempts (some say funded by the US) to thwart the CPEC project picking up speed. As it would not only benefit them to see their long time bitter neighbors, Pakistan suffer economically, but China as well. And this would benefit the western powers who view China’s ability to become a super power very seriously as well as their relations to Pakistan. Whatever schemes they do concoct up, the hour is not in favor of the opposed.