The new phase of China-Pakistan cooperation and the Middle East

China Pakistan Economic Corridor (CPEC), the flagship project of China’s Belt and Road Initiative (BRI) is entering its second highly promising phase. While its first phase was about the development of road infrastructure and the launching of new power projects, the second phase will focus on the establishment of Special Economic Zones (SEZ), the modernization of Pakistani agriculture, the development of information technology and mining sectors. This will not only give a much needed boost to Pakistan’s currently challenging economic scenario but also create fresh avenues for Middle East investments.

CPEC has already connected Kashghar with Gwadar, a deep sea port-- which will be the hub of this expensive and ambitious international project. Tourist resorts will be developed around Gwadar as it has fabulous beaches and plenty of sunshine. But a point of greater interest for regional energy exporting countries would be the Oil Terminal City in Gwadar with large storage facilities and an allied petrochemical industry. China is a major importer of oil from the GCC countries and Iran. CPEC can afford China a much shorter route to the Middle East and Africa for its exports and from the energy exporting countries to import oil and gas.

The Chinese province of Xinjiang has a vast area, being its largest province. However, it is also less developed than the rest of the country, on account of being far away from the major hubs of economic activity along the east coast. The Chinese leadership is determined to bring this province up to par with the rest of the country. The development of western China would itself require intensive use of energy resources not only in the immediate future but also in years to come. Industrial units being set up in Xinjiang would be able to export their products to the Middle East and Africa through a much shorter route. China-Middle East trade will get a significant boost with Pakistan playing the role of a facilitator in this connectivity.

The coming phase of CPEC will draw GCC countries, Pakistan and China closer and enhance peace and economic development.

Javed Hafeez

Chinese concerns about the security of their personnel notwithstanding, this project envisaging $62 billion investment in Pakistan, has gone on unhindered. This is proof of all-weather strategic relations between China and Pakistan. Chinese leaders often refer to Pakistan as their ‘iron brother’ and these feelings of mutual trust and empathy were evident during PM Shehbaz Sharif’s visit to China last month. On the heels of that visit, the head of the International Department of Chinese Communist Party Liu Jianchao visited Pakistan with a large delegation and held a bilateral meeting with representatives of various Pakistani political parties, including the political opposition. This amply reflected that CPEC enjoys national consensus in Pakistan.

Five large SEZs are being established during the second phase, the largest of these being the industrial city of Gwadar. These would benefit from the existing road infrastructure and boost economic development all over Pakistan, Balochistan in particular. Pakistan’s major railway line from Peshawar to Karachi will be upgraded. One can visualize Karachi and Gwadar as busy ports in the near future, benefitting the entire region in terms of trade through connectivity. Thus, the coming phase of CPEC will draw GCC countries, Pakistan and China closer and enhance peace and economic development.

The Karakoram Highway (KKH) often dubbed a ‘wonder of the world’ because of its notoriously difficult terrain, is being upgraded. This important highway will not only enhance north-south connectivity but also boost east-west overland and maritime trade links. Gwadar port would be a natural choice for Afghanistan and landlocked Central Asia. Lahore-Peshawar road and rail links can also be used by India, one day, for trade with Afghanistan and Central Asia. On his July 1st visit to Dushanbe, Prime Minister Shehbaz Sharif said that Tajikistan and Afghanistan also want to benefit from CPEC and Pakistani ports.

While CPEC is essentially an economic project, aimed at enhancing trade through connectivity, some countries are bent upon giving it a geo-political color. They insist that in case of heightened tensions in the Indian Ocean, Gwadar could be used as a naval base by China. This argument is farfetched for two obvious reasons. Firstly, China has seldom fought international wars. And secondly, Pakistan itself has a strong navy quite capable of defending its maritime interests.

CPEC is a win-win project for China, Pakistan, the GCC countries, and Africa. It will bring prosperity to the under-developed provinces of both China and Pakistan. Energy exports from the GCC countries and Iran will increase through pipelines going north via Pakistan and Gwadar will appear on the world map as an international port of some consequence. 

– Javed Hafeez is a former Pakistani diplomat with much experience of the Middle East. He writes weekly columns in Pakistani and Gulf newspapers and appears regularly on satellite TV channels as a defense and political analyst.

X: @JavedHafiz8