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China Pakistan Economic Corridor to hurt India on sovereignty issues

By TN Ashok. Dated: 5/22/2017 10:36:25 AM

The recent diplomatic faux by China in withdrawing its ambassador Lou Zhaohui's statement on the controversial China Pakistan Economic Corridor (CPEC) is actually symptomatic of a larger geo political malaise on China's ambitious $46 billion One Belt One Road (OBOR) project involving construction of highways, economic zones, railways networks etc.
China's ambassador Luo Zhaohui had told a strategic affairs think tank meeting in New Delhi that his country was ready to rename the China Pakistan Economic Corridor as a pre- condition for Prime Minister Narendra Modi to attend the One Belt , One Road crucial meeting at Beijing on May 14 -15 this year. China wanted to placate India on its reservations on the project even though External Affairs Minister Ms Sushma Swaraj did not have any objection to the economic project as it believed it would contribute prosperity to the region and usher in economic stability. But expressed reservations on sovereignty issues.
Given this background, China was keen to have India on board for the One Belt , One Road project and had clearly stated that it was an purely an economic project that would link the land locked western China to Europe through south Pakistan and Afghanistan. China said it was not interfering in the internal dispute or conflict between India and Pakistan infringing on sovereignty issues as the highway and corridor passed through Pak occupied Kashmir. A disputed territory. Chinas interests were purely economic.
The double standard in first trying to placate india by renaming the CPEC and then withdrawing the same from its official websites in order not to upset its all weather friend Pakistan as a murmur of protests followed from India's ever hostile neighbour shows China's predicament more than India's.
China wants to please Pakistan at the political level as an ally in the sub continent giving it a measure of strength against India and at the same does not want to displease India where it has huge economic interests as Chinese companies have made heavy investments in the power sector, consumer goods electronics and want to tip the scale in its favour against the powerful lobbies of South Korea and Japan which dominate the consumer electronics as well as the automobile sector.
China has huge plans to bring in its less priced motor bikes to compete with indian bike manufacturers such as Hero Honda, TVS, Yamaha, and Suzuki as they have already made strong inroads into the tyres sectors which are becoming popular by the day even as the indian automotive tyre manufacturers association has mounted a large battle against them at government level led by JK Tyres, MRF and Apollo tyres besides foreign operators such as Michelin and GoodYear. China wants to bring in its automobiles to compete with Indian , European and US based automobile companies.
Given this background China is virtually walking a tight rope and is on the horns of a great diplomatic dilemma on how to balance its interests between India, a huge trading partner , and Pakistan, a strong political ally. There are some 10 important things to remember on the One Belt, One Road project which subsumes the CPEC that's hard put to balance relations between India, China and Pakistan.
Firstly, for China it's an ambitious project valued at over $ 46 billion. Launched in 2015, the 3,000-km network of roads, railways and pipelines will link western China to Southern Pakistan. Its part of a larger Chinese strategy. The CPEC is a part of Chinese President Xi Jinping's Silk Road Economic Belt and the 21st Maritime Silk Road projects, two development plans that seek to deepen Mainland China's economic cooperation with a number of Asian and European countries. So, where does the problem lie? CPEC falls in three geo-politically significant regions. The corridor will pass through Baluchistan province - where a separatist movement has been under way for decades - as well as through Gilgit-Baltistan and Pakistan-occupied Kashmir (PoK).
CPEC holds great advantages for Pakistan in economic terms. Pakistan's interest to invest in the project is multi fold. It hopes the CPEC will stimulate economic development and increase energy production. In fact, $35 billion is to be invested in coal and LNG-based thermal energy projects in Pakistan, according to some economic journals.
The project also holds great advantages for China. Reports outlinethe wins for Pakistan's 'all-weather friend.' First, China expects to be able to transport its energy supplies from the Persian Gulf faster. Second, the corridor could lead to economic development in Western China, a land-locked region. And finally, China, by "establishing its physical footprint" in Gilgit-Baltistan, also hopes to check the movement of Uighur separatist militants.
For Pakistan development of the deep water Gwadar port is a big boon from the CPEC. The Gwadar deep-water port in Baluchistan province is an important cog in the CPEC apparatus. China Overseas Ports Holding Company Ltd, firm that in 2013 took over port operations, expects Gwadar port to be fully operational before the end of the year, and to process a million tons of cargo in 2017. Most of the cargo will be construction materials for the CPEC. It is worth noting that in the conflict-torn region where the port is situated, there has been a decades-long struggle for independence from Pakistan, which is accused of siphoning the region's resources into its coffers to the detriment of its residents, media reports say. ..
Pakistan has gone out of its way to provide security for Chinese nationals working on the project. Over 17,000 Pakistani security personnel have been tasked with providing protection for Chinese nationals in Pakistan. Reports appearing in media in April suggested that Pakistan was set to deploy an additional 4,000 personnel to provide security for Chinese nationals working on the CPEC - amongst other projects - in Punjab province.Satellite monitoring: Pakistan and China will monitor the progress made on CPEC projects using a satellite, which is set to be launched in June 2018, Pakistan's daily Dawn reports online. .
Mounting Ire against China, Pakistan: In August, reports came in that that residents of Gilgit-Baltistan and PoK were increasingly angry with Pakistan's and China's exploiting their natural resources without sharing the benefits of development with them. In Gilgit-Baltistan, the influx of Chinese workers has left many locals unemployed, and it is also feared that the CPEC will create an ecological imbalance in the region. In addition, the Gilgit-Baltistan government and the Pakistani Army are forcibly acquiring locals' ancestral lands for the CPEC, Senge H Sering, director;Gilgit-Baltistan National Congress is quoted by Indian media reports as saying.
Says Priyanka Singh, a Sino-Indian expert at the , Indian Institute for Defence Studies and Analysis (IDSA), that in December two years ago the Chinese state run Xinhua news agency announced the closure of the strategic Khunjerab Pass and in the process referred to Gilgit Baltistan as part of Pakistan. China had previously maintained that J&K was a bilateral problem/dispute between India and Pakistan. So it seemed a reversal of stand on the issue from a previously held neutral position. Diplomatic observers say that a section believes that by taking up a long term project such as the CPEC, the arteries of which will originate in Gilgit Baltistan, China has yet again tacitly approved Pakistan's claim and control over this region. India did not react to the Xinhua statement. In the past, a similar statement was withdrawn after India registered a protest to the Chinese news agency.
External Affairs Minister Ms Sushma Swaraj has gone on record to state in the Lok Sabha that "Government was aware of reports on China and Pakistan being involved in infrastructure building activities in Pakistan Occupied Kashmir (POK), including construction of China-Pakistan Economic Corridor. Government had conveyed its concerns to China about their activities in Pakistan Occupied Kashmir, and asked them to cease such activities."But somewhat contravening the above is a recent statement by India's High Commissioner to Pakistan, who noted: "India has no worry over the construction of Pakistan-China Economic Corridor as an economically strong Pakistan would bring stability in the region." Says Priya Singh India is yet to comprehensively articulate its approach towards the CPEC despite the fact that the corridor bodes strategic implications for India.
As stated, the corridor will pass through the Gilgit Baltistan region where China has invested in the past in infrastructure and hydropower projects. In the Gilgit Baltistan segment, the CPEC project design includes a major expansion of the Karakoram Highway, establishing industrial parks in special economic zones, constructing hydropower projects, railway line and road building. The project also entails building hydropower projects and motorways/highways in the so-called Azad Jammu and Kashmir (AJK). India has occasionally raised objections to Chinese infrastructure investment in the region.
The origin of the CPEC could be traced to the Border Agreement of 1963, considered a milestone in China-Pakistan relations. The agreement ceded the 5000 plus square mile Trans Karakorum Tract to China and served as a precursor to the Karakoram Highway, conceived later as a strategic link defining China and Pakistan's 'all-weather friendship'. The then Defence Minister of India, Krishna Menon, elaborately enunciated India's position on the issue at the UN, condemning the agreement as illegitimate. Besides, India lodged an "emphatic protest" to China and conveyed its concerns in a letter of protest. But now four decades down the line, India's policy orientation and broader claim on Gilgit Baltistan remains unchanged, its stance on Chinese investments in the Karakoram Highway, and Chinese efforts to leverage this territorial link to build a strategic corridor, is perceived to be weakening over time, Says Priya Singh.
India's Dilemma: Participating in the project would require a major alteration in India's policy. Overlooking the territorial dimension could be interpreted as a massive climb-down from its stated position. It may even be construed as acquiescing to the China-Pakistan alliance in the region and beyond. Thus, the CPEC poses a policy challenge to India on how best to strike a precarious balance between securing its strategic/territorial interests without at the same time being confrontational.
India needs to take a clear position on the CPEC sooner or later. Internally, there has been no serious political or public debate on how India should approach the issue, claims Priya Singh. -- IFS
T N Ashok is a Corporate Consultant, Resident Editor and Writer of Economic Affairs.