CHINA WATCH [May 9 – 15] – Belt and Road Forum (BRF) For International Cooperation

Summary:

The summit of the BRF for International Cooperation in Beijing was the top story of the last week. China and Pakistan signed new deals worth nearly $500 ahead of the summit. In its efforts to induce New Delhi to attend the BRF summit, China showed willingness to rename the China-Pakistan Economic Corridor (CPEC). However, India did not participate in the BRF summit and called the initiative as “unsustainable debt”. Two major terrorist attacks in Baluchistan refreshed the questions about the security of the CPEC. In an exclusive report, English daily Dawn has revealed the details of the much-awaited masterplan of the CPEC. A large number of protestors gathered in Skardu to protest against the exclusion of Gligit-Baltistan (GB) form the CPEC projects. The Director of the United States (U.S.) National Intelligence, Daniel Coats, observed that the CPEC “will probably offer militants and terrorists additional targets.”

CPEC in the Limelight:

China and Pakistan inked new deals worth nearly $500 ahead of the Belt and Road summit in Beijing.[i] Pakistan’s delegation at the summit is led by Prime Minister (PM) Nawaz Sharif, Chief Ministers of all the four provinces and some cabinet ministers. The agreements signed included: a Memorandum of Understanding (MoU) on bilateral cooperation within the framework of the Silk Road initiative, agreement for up gradation of the main track ML-I, MoU about a dry port in Havelian, and three agreements related to economic and technical cooperation worth 3.4 billion yuan for the Gwadar port and East Bay Expressway.[ii] On the other hand, the Chinese President Xi Jinping in a meeting with Pakistani PM Nawaz Sharif called for pushing forward the construction of the CPEC.[iii] The Pakistani PM warned that CPEC should not be politicised and said the corridor was open to all countries.[iv] He went on to say that “[W]e are not striving to merely leverage geography for economic prosperity; we are also trying to build a peaceful, connected and caring neighbourhood.” The two governments seem to be determined to step up measures to expeditiously implement the multi-billion dollar project against all the odds, challenges and pressing questions directed at this venture. However, the actualisation of the project would not necessarily and so easily translate into a win-win situation which is incessantly portrayed by the officials of two countries.

The Epitome of Chinese Pragmatism:

In its efforts to induce New Delhi to attend the BRF summit, Beijing showed a remarkable shift in policy. To address India’s concerns against the running of CPEC through Kashmir (which India claims to be its territory), China’s ambassador to India Luo Zhaohui was reported to have said that “[T]he CPEC is for promoting economic cooperation and connectivity. It has no connection to or impact on sovereignty issues. Even we can think about renaming the CPEC.”[v] He insisted that “OBOR and regional connectivity could provide China and India with fresh opportunities and highlights for the bilateral cooperation.”[vi] However, such an unconventional shift – “renaming CPEC”- was met with alarm in Pakistan. Consequently, the Chinese embassy removed the relevant sentences from the script of the ambassador’s speech available on Chinese embassy website. Even if China has supported Pakistan diplomatically and militarily vis-a-vis India, it has adopted a stance – more like that of India – on the Kashmir issue (since 1990) and maintained that issue should be resolved bilaterally. However, the suggestion of renaming CPEC seems a step too far if analysed from the conventional Pakistani perspective. It also reveals that China and Pakistan can have rather different visions for the CPEC. If Pakistan has conditioned India’s joining of the CPEC to the resolution of Kashmir issue, China has pragmatically prioritised its economic agenda to draw more and more countries to the OBOR project.

India Calls OBOR as “unsustainable” Debt:

Despite all the conciliatory gestures from China, India stayed away from sending its delegation to the BRF summit in Beijing. Surprisingly, India went one step further and questioned the very economic feasibility of Chinese initiative of the new  “Silk Road”. While explaining the basic reason for New Delhi’s decision to skip the summit, Indian foreign ministry spokesman Gopal Baglay said that “[N]o country can accept the project (i.e. CPEC) that ignores its core concerns on sovereignty and territorial integrity.”[vii] More importantly, Baglay added that “[C]onnectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities.” India has always shown reservations about the CPEC project due to its territorial claims on Kashmir but the caution of “unsustainable debt” is something unheard before from New Delhi. The move can be emblematic of the fact that Narendra Modi’s government is ready to be more dauntless in casting doubts on China’s initiative of OBOR beyond the argument of ‘territorial integrity’. None of these Indian moves – i.e. skipping BRF summit and questioning the idea – will go down well with China which has recently shown greater sensitivity to the image of its OBOR diplomacy.

Issue of Security Looms Large on CPEC:

At time when Beijing has been fervently busy in highlighting the significance of its “Belt and Road Initiative” internationally, CPEC – the “flagship” project of OBOR – is once again faced with security threats. Baluchistan that is home to Gwadar port of the CEPC project was the scene of two major terrorist attacks. First, on Friday a suicide bomber attacked the convoy of Senate Deputy Chairman and the Secretary General of Jamiat Ulema-e-Islam-Fazl, Ghafoor Haideri, in Mastung killing 26  people and wounding 30 others. Then next day, 10 labourers were killed in a gunfire attack in Gwadar district by separatist Baloch Liberation Army. The attacks raised serious concerns in Beijing and Pakistani PM had to reassure the Chinese leaders that such “troublemakers” would be “taken care of”.[viii] Although the Pakistani government has established ‘Special Security Division’ and ‘Maritime Security Force’ consisting of 15,000 strongmen, the goal of abolishing security threats has so far evaded the authorities. It is the most daunting challenge the country has to overcome to make sure the smooth functioning of the corridor.

CPEC Master Plan Revealed:

In an exclusive report, English daily Dawn has revealed the details of the much-awaited masterplan of the CPEC.[ix] The report highlights that agriculture takes precedence over other areas in the CPEC planning. Other spheres projected for massive Chinese investments include industry, fire optics and surveillance, tourism and recreation and finance and risk. However, Gwadar port gets relatively little mentioning in the plan. The plan explains the details of Chinese investments, intentions and priorities in Pakistan for the next decade and a half. The report highlights that Chinese investment plans are primarily motivated by access to the different sectors of Pakistani market for economic gains. The significance of such massive development funding for a country like Pakistan are beyond any questioning. Notwithstanding, there are many reasons to be cautious and let the logic of economic rationality prevail. Unfortunately for now, this logic has taken the back seat as China seems to have gained disproportionately upper hand in finalising the deals of CPEC.

Miscellaneous:

A large number of protestors gathered in Skardu to protest against the exclusion of GB form the CPEC projects.[x] The Director of the U.S. National Intelligence, Daniel Coats, observed that the CPEC “will probably offer militants and terrorists additional targets.”[xi]

 

This report is compiled and written by Abdur Rehman Shah, Research Associate at the Centre for Research and Security Studies (CRSS), Islamabad. He tweets @abdur_shah

Notes:

[i] Johnson, Kay. (2017, May 13). Pakistan signs nearly $500 million in China deals at Silk Road summit. Retrieved on May 14, 2017, form http://www.reuters.com/article/us-china-silkroad-pakistan-idUSKBN1890KD

[ii] Reuters. (2017, May 13). Chinese president Xi calls for boosting CPEC construction. Retrieved on May 15, 2017, from https://www.dawn.com/news/1332894/chinese-president-xi-calls-for-boosting-cpec-construction

[iii] Xinhua. (2017, May 13). Xi calls for boosting China-Pakistan Economic Corridor construction. Retrieved on May 15, 2017 from http://news.xinhuanet.com/english/2017-05/13/c_136279150.htm

[iv] Dawn. (2017, May 14) Geo-economics must take precedence over geo-politics. PM says in Beijing. Retrieved on May 15, 2017, from https://www.dawn.com/news/1333084/geo-economics-must-take-precedence-over-geo-politics-pm-says-in-beijing

[v] Haidar, Suhasini. (2017, May 9). China offers to rename OBOR to allay India’s fears. Retrieved on May 15, 2017, from http://www.thehindu.com/news/national/china-offers-to-rename-obor-to-allay-indias-fears/article18410413.ece

[vi] Monitoring Report. (2017, May 10). China removes ‘ready to rename CPEC’ remark following Pakistan’s protest. Retrieved on May 15, 2017, from https://www.pakistantoday.com.pk/2017/05/10/china-removes-ready-to-rename-cpec-remark-following-pakistans-protest/

[vii] Reuters. (2017, May 15) India skips China’s Silk Road summit, warns of ‘unsustainable’ debt. Retrieved on May 15, 2017, from https://www.dawn.com/news/1333087/india-skips-chinas-silk-road-summit-warns-of-unsustainable-debt

[viii] Sikandar, Sardar. (2017, May 15). Terrorist attacks: Nawaz moves to allay Chinese leadership’s concerns. Retrieved on May 15, 2017, from https://tribune.com.pk/story/1409879/terrorist-attacks-nawaz-moves-allay-chinese-leaderships-concerns/

[ix] Husain, Khurram. (2017, May 15). Exclusive: CPEC master plan revealed. Retrieved on May 2017, from https://www.dawn.com/news/1333101/exclusive-cpec-master-plan-revealed

[x] Taj, Imtiaz Ali. (2017, May 15). ‘Thousands’ protest govt’s negligence of Gilgit Baltistan under CPEC. Retrieved on May 15, 2017, from https://tribune.com.pk/story/1409879/terrorist-attacks-nawaz-moves-allay-chinese-leaderships-concerns/

[xi] News Desk. (2017, May 12). CPEC will offer militants additional targets: US. Retrieved on May 15, 2017, from https://tribune.com.pk/story/1407854/cpec-will-offer-militants-additional-targets-us/

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