Pakistan’s investment from China is Declining?
Pakistan’s Investment from China has requested to increase funding for CPEC projects. However, experts say Beijing is being cautious given Pakistan’s worsening economic crisis. At a time when China is celebrating the tenth anniversary of its Belt and Road Initiative (BRI) this year, one of the most important investments under the initiative, the China-Pakistan Economic Corridor (CPEC), seems to have stalled.
CPEC Pledged Billions of Dollars
Under an agreement signed between the two countries in 2015, CPEC pledged billions of dollars in Chinese investment to develop rail and road links. The purpose of this infrastructure development is to transport Chinese goods from the Xinjiang region through Pakistan’s mountainous borders to the Gwadar port, 630 km west of Karachi, to the Arabian Sea. CPEC also promised investment of billions of dollars for the development of energy infrastructure in Pakistan.
CPEC’s Decision-making Body
However, according to details of a high-level meeting of CPEC’s decision-making body in July, China has recently expressed reluctance on Pakistan’s request to provide funding for several CPEC projects. “CPEC’s slowdown can be attributed to both economic and security factors. Pakistan’s worsening economic crisis and China’s own recent slowdown,” says Michael Kugelman, a South Asian affairs specialist at the Woodrow Wilson International Center in Washington. has reduced the chances of new projects.”
Pakistan has expressed hope that this landmark project in the infrastructure sector will act as a ‘lifeline’ for the country’s economy. However, many experts believe that the actual results of CPEC in Pakistan will be less than expected.
Burden of Public Debt
“Over-promising and under-delivering have been a key factor, including capacity issues and instability on the political and security fronts,” said Azeem Khalid, a scholar of Pakistan-China relations at Comstate University Islamabad. Speaking to foreign news Agency, he said that he believes that the tangible benefits of CPEC for the Pakistani people have been limited, while the burden of public debt and payments to Chinese companies has increased. It is safe to say that the loud claims about CPEC were more a product of propaganda than a reflection of reality. China, with the help of Pakistan’s media and intellectuals, marketed the project vigorously, raising people’s expectations.”
However, Pakistan’s former ambassador to the US, Maleeha Lodhi, told DW that she thinks “CPEC is proceeding as planned.” “The pace which was slow down due to the coronavirus epidemic is now accelerating,” he add. Maleeha Lodhi said, “It is CPEC’s critics who wrongly claim that it is not moving forward. In fact, it is modernizing Pakistan’s road, rail energy, and transport systems and its connectivity. There is a lot of work to be done in terms of scaling up.”
Political instability of Pakistan
Since the removal of former Prime Minister Imran Khan in April 2022, Pakistan has plague by constant political instability. Imran Khan is behind bars on corruption charges while a caretaker government oversees the country until the next election. Kogelman told foreign news agency, “China is a foreign investor. Naturally, Pakistan is concerned about the threat of unrest and violence due to political instability, which could also pose a threat to its citizens and interests in Pakistan,” he added. The lack of clarity on when the elections will be held, a situation of political uncertainty, has worry China because it creates an unstable combination of political uncertainty and instability.”
Beijing’s Strategic Objectives in Pakistan
Pakistani intellectual Khalid says that China has “significant and real concerns” regarding Pakistan’s political landscape. “Unlikely, it is of utmost importance to Chinese policymakers. Beijing’s strategic objectives in Pakistan’s investment are intimately link to the country’s political stability.”
Security Threats to Chinese Workers
China is very concerned about security threats to BRI investment project plans, which could jeopardize new investments and the completion of projects. A militant attack on engineers was foil. In 2021, nine Chinese workers were kill in a bus attack in northern Pakistan, which China called a “bomb attack”. A suicide bomber killed Chinese teachers in Karachi in 2022. After the attack, Chinese Foreign Ministry spokesman Wang Wenbin said. “There is no intention to damage China-Pakistan friendship. And the construction of the China-Pakistan Economic Corridor (CPEC). Even the attempt will never succeed.”
“China’s concerns about security threats are increasing as it now faces increasing threats,” Kogelman says, adding that it includes the ever-present Baloch insurgents, the two-time Pakistan Tehreek-e-Taliban. And the so-called IS (Khorasan) are involve. “China’s worries are compound by Pakistan’s failure to mitigate these threats,” says Kugelman. may consider bringing in its own security forces to protect it, which would be politically disadvantageous for Islamabad.”
Former ambassador Maleeha Lodhi, however, believes that “security concerns are there, but not insurmountable. Pakistan is alleviating China’s security concerns. While on the other hand, it is facing an increase in terrorist violence, particularly by the TTP.” Analyst Khalid says China is “commit to protecting its personnel and infrastructure projects operating inside Pakistan’s investment.” “Any threat to CPEC projects and the security of Chinese citizens could greatly hamper CPEC’s progress,” he said.
Stay tuned for latest news, breaking news, current affairs, economic issues and world news.