First Movement: Pakistan and the Belt and Road Initiative

The China-Pakistan Economic Corridor (CPEC) has been billed as the "flagship project" of the Belt and Road Initiative (BRI), constituting the most expansive package of Chinese investments to be set in motion under its auspices to date.¹ The headline numbers cited by the Pakistani government—$46 billion after CPEC's launch in 2015, rising to $51 billion after the agreement of additional projects in September 2016—may err on the high side, but by late 2016 even the Chinese Ministry of Foreign Affairs' more conservative estimates of activities moving forward on the ground already totaled $14 billion.² The scale and nature of CPEC, incorporating energy projects, rail and road connections, infrastructure development, and industrial zones, make it one of the only so-called corridors that genuinely seems to match the purported ambitions of Xi Jinping's scheme. In the florid language of Wang Yi, China's foreign minister: "If 'One Belt, One Road' is like a symphony involving and benefiting every country, then construction of the China-Pakistan Economic Corridor is the sweet melody of the symphony's first movement."³

That Pakistan should occupy such a prominent role in the initiative is surprising. Despite deep political and security ties between China and Pakistan, trade and investment has long been a weak element in the relationship, with a cautionary history of similarly grand announcements failing to translate into effect. One RAND study found that between 2001 and 2011, while $66 billion of Chinese investments in Pakistan were cumulatively announced, only 6% of these were ever actually realized.⁴ The concept of CPEC is only the latest iteration of proposed transportation and energy corridors between the two countries, which have tended to take more vivid form in the minds of geopolitical strategists than in reality. Although some of the conditions leading to this consistent pattern of disappointment in bilateral economic links have improved—including the security situation in Pakistan—many have not. As a result, when Xi launched CPEC during his April 2015 visit, many analysts evinced understandable skepticism about whether it would really move ahead at all.

The subsequent period has provided other grounds for skepticism too. The original list of projects included some figures that had a "back of the envelope" quality: rushed agreements on paper to generate high-dollar-value headlines, some of which have since been shelved after more detailed studies were undertaken.⁵ There are transparency concerns, with even the governor of Pakistan's central bank stating that he did not have a clear overview of the financing of the scheme.⁶ Fights have unfolded between different provinces, with critics, particularly in Khyber Pakhtunkhwa and Baluchistan, arguing that CPEC would benefit the traditionally dominant Punjab Province disproportionately. Economic analysts have raised questions about the implications of such a large volume of Chinese loans and imports for Pakistan's balance of payments and broader financial situation, which has been crisis-prone even at the best of times.⁷ CPEC also attracted more vociferous criticism from India than had been anticipated. Prime Minister Narendra Modi personally objected to an initiative with infrastructure connections that pass through disputed territory and pointedly raised the Baluchistan issue as a warning to China of the potential repercussions.⁸ It is not difficult to assemble the material to portray CPEC as a geopolitically controversial scheme that will load Pakistan with debt, leave it in hock to China, stoke internal divisions, and leave behind a host of white elephant projects and incomplete plans. More lurid versions of the picture feature Chinese land-grabs, a creeping imperial takeover of Gilgit-Baltistan, and an influx of People's Liberation Army troops.

Yet this characterization of a scheme that is simultaneously strategically threatening and doomed to fail seems at best inadequate and at worst a serious misunderstanding of China's objectives. For long-term watchers of the China-Pakistan relationship, the most striking fact is that, unlike previous economic ventures, CPEC is materializing on the ground. Early-harvest projects are in the process of being completed, roads are being built, Gwadar port has already been connected...