Changing Geopolitics of CPEC

September 6, 2021

Pakistan is set to leverage the second phase of the China-Pakistan Economic Corridor (CPEC) at a time when the outlook of the economy is somewhat clouded by changing geopolitical dynamics and the evolving realignments of contending regional and global powers, up from 3.9 percent last year to 4.8 percent this year.

While interacting with European diplomats unifying in Islamabad as the world watches with bated breath the return of Taliban rule in Afghanistan, Pakistan has stepped up efforts to re-establish Chinese trust in order to restart the CPEC. The multibillion-dollar action plan, billed as a “turning point” for Pakistan, appears to have stalled in recent years.

Experts sympathetic to the Islamabad regime blame the slowdown on Covid-induced investor reluctance, a set of violent attacks attacking Chinese citizens, and bureaucratic barriers. Others describe it as a lack of policymakers’ thought unity, security flaws, and a hostile bureaucracy.

“According to what I’ve heard in China-related circles, the giant’s quiet diplomats have broken their silence and are not vocalizing their CPEC-related disappointments. The breach of security is unacceptable, but their reservations are not limited to this aspect.

China’s withdrawal from the 10th Joint Coordination Committee just hours before the meeting was their way of reminding Pakistan that it needed to get its act together.The shift in tone suggests that they are already considering other options if their first choice fails,” a reliable source in Islamabad commented.

“We must make CPEC work by regaining the trust of our Chinese partners.” To that end, we will need to strengthen security for Chinese nationals and assets. We are working hard to resolve contentious issues that are causing hostility and impeding progress. The emphasis is also on improving coordination between the federal and provincial governments to ensure smooth and visible progress in the right direction.

This may take a bit of time, but we are completely devoted to CPEC and are concerned about the high shareholding for both sides,” said Khalid Mansoor, the special assistant to the prime minister (SAPM) on CPEC, over the phone from Islamabad, while discussing the CPEC slowdown and Chinese bookings. “CPEC is a key component of China’s One Belt One Road plan — a working example to assess the effectiveness of an elevated global power’s vision. In Pakistan, against a background of desperate need for huge investments, CPEC was a lifesaver that can make or break our future,” an economist agreed and intricate stakes.

“In addition, the benefits of the first phase’s ongoing projects in the energy and infrastructure sectors have neutralized the country’s CPEC deniers, and the stage is now established for the commencement of the second phase,” he added. “My primary responsibility is to expedite the execution of the second phase. My involvement in successful joint project initiatives with China provided an insight into the inner workings of such endeavors.

I’m hoping to quickly extricate the knots that are stifling progress. Since taking office, I have visited numerous project sites, including Gwadar, and met with the heads of Chinese companies that have already invested or are in the process of investing in Pakistan,” the SAPM stated. Khalid Mansoor was appointed to the position in early August, after Rtd General AsimBajwa stepped down as Chairman of the CPEC Authority.

“We hope to approach major Chinese investors with a strong case for Pakistan as a future investment location in a variety of sectors,” Mansoor added. When pressed for names of Chinese firms already present, he did not have many off the top of his head but did mention energy firms he had previously worked with, as well as electrical goods producer Vivo. According to the website of the Federation of Pakistan Chamber of Commerce and Industry, approximately 40 small private Chinese companies operate in the electronic, textile, construction-related goods, and auto sectors.

The second phase of CPEC focuses on intensifying and widening Pakistan-China economic ties beyond infrastructure and energy. It aims to transform the economy through large amounts of foreign investment, resulting in technology transfer, skill up – gradation, and trade facilitation. It will create job opportunities and make use of unutilized natural resources. “We are aiming to create synergy and a package of competitive incentives to nudge Chinese businesses to relocate their industries to Pakistan,” SPAM said.

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