China’s Tepid Response leaves Pakistan’s economic aspirations unfulfilled

China’s Tepid Response leaves Pakistan’s economic aspirations unfulfilled: 

In a recent high-stakes meeting with Chinese President Xi Jinping, Pakistan’s Prime Minister Shahbaz Sharif came back empty-handed, with no significant investment pledges for Pakistan’s key projects. Instead, the summit yielded only a few non-committal agreements and diplomatic niceties, dashing Islamabad’s hopes for economic support amid a crisis.

This outcome suggests a waning Chinese interest in the China-Pakistan Economic Corridor which has seen declining enthusiasm over recent years.

Factors such as delayed payments, political instability, and security issues in Pakistan have made Chinese leaders wary, indicating that Pakistan may need substantial policy changes to attract future investments.

A Challenging Partnership:

Since its inception in 2013, the China-Pakistan Economic Corridor has faced numerous hurdles, shaking Beijing’s confidence in Islamabad. Initially hailed as the flagship project of China’s Belt and Road Initiative, The CPEC has experienced significant delays. The first phase progressed swiftly due to Chinese leadership, but the momentum slowed considerably by 2019, with Pakistan missing several deadlines. Major projects, including the special economic zones and the strategic ML-1 railway line, remain incomplete.

These delays stem from a mix of poor economic decisions and external factors. Pakistan has faced severe financial crises, the impact of COVID-19, and devastating floods in 2022. These challenges have hindered payment arrangements with Chinese power producers, causing repeated complaints over the past three years.

Political Instability and Bureaucratic Confusion:

Beijing’s hesitation also stems from Pakistan’s political volatility. Since CPEC’s launch, four Pakistani governments have come and gone, each mired in protests and uncertainty. Protests in 2014 delayed President Xi’s visit, while allegations of corruption, political infighting, and public dissent over CPEC’s benefits have further strained relations.

Frequent changes in agencies responsible for CPEC have added to the confusion. The project’s oversight shifted multiple times, each change bringing new faces and policies but little progress. Promised improvements like a “one-window operation” and “revolving accounts” for payments remain unfulfilled, often requiring intervention from the prime minister’s office.

Security Concerns and Chinese Safety:

The volatile security environment in Pakistan, marked by increased militant attacks targeting Chinese workers, poses a significant risk. Since the Taliban’s takeover of Afghanistan, terrorist incidents in Pakistan have surged, particularly in Khyber Pakhtunkhwa and Balochistan, key regions for CPEC. Chinese nationals have faced growing threats, with attacks rising sharply despite Pakistan’s efforts to provide special security measures.

China’s public statements about expanding CPEC to Afghanistan and Iran are complicated by Pakistan’s strained relations with its neighbors. Border tensions and the threat from groups like the Tehreek-e-Taliban Pakistan (TTP) and Islamic State-Khorasan Province (ISKP) add to the concerns, making Chinese investors cautious about further commitments.

Can Pakistan Revive CPEC?

While Prime Minister Sharif’s visit highlights his commitment to CPEC, it also underscores the challenges in the China-Pakistan relationship. Recent measures, such as payments to Chinese energy companies and a nationwide counterterrorism operation, signal Pakistan’s efforts to address these issues. However, meaningful progress requires long-term policy overhauls, political stability, and improved relations with neighboring countries.

Pakistan’s leadership must focus on economic reforms, security, and political consensus to reassure China and attract future investments. Until then, China-Pakistan economic relations may continue to rely on temporary arrangements, with substantial gains remaining elusive.

This article is written by Ms. Hadia Safeer Choudhry who is a student of International Relations with solid academic basis in diplomatic relations, International law, and intercultural communications. The views expressed in this article is authors’ own views and do not represent the views or opinions of the Youth Diplomacy Forum.