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China-Pakistan Economic Corridor (CPEC)

Topics covered:

  1. India and its neighbourhood- relations.
  2. Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

 

China-Pakistan Economic Corridor (CPEC)

 

What to study?

For Prelims: Key features of CPEC.

For Mains: India’s concerns, ways to address them and global implications of the project.

 

Context: The US has warned that the China-Pakistan Economic Corridor (CPEC) would only benefit Beijing and inflict heavy debt burden on Islamabad.

The US observed that the CPEC was not an aid to Pakistan but a form of financing that guaranteed profits for Chinese enterprises, with little benefits for Islamabad.

 

About CPEC:

The CPEC is the flagship project of the multi-billion dollar Belt and Road Initiative (BRI), a pet project of Chinese President Xi Jinping, aimed at enhancing Beijing’s influence around the world through China-funded infrastructure projects.

  • The 3,000 km-long China–Pakistan Economic Corridor (CPEC) consists of highways, railways, and pipelines.
  • CPEC eventually aims at linking the city of Gwadar in South Western Pakistan to China’s North Western region Xinjiang through a vast network of highways and railways.
  • The proposed project will be financed by heavily-subsidised loans, that will be disbursed to the Government of Pakistan by Chinese banking giants such as Exim Bank of China, China Development Bank, and the Industrial and Commercial Bank of China.

 

But, why is India concerned?

  1. It passes through PoK. Any Indian participation would inextricably be linked to the country’s legitimate claims on PoK.
  2. CPEC rests on a Chinese plan to secure and shorten its supply lines through Gwadar with an enhanced presence in the Indian Ocean. Hence, it is widely believed that upon CPEC’s fruition, an extensive Chinese presence will undermine India’s influence in the Indian Ocean.
  3. It is also being contended that if CPEC were to successfully transform the Pakistan economy that could be a “red rag” for India which will remain at the receiving end of a wealthier and stronger Pakistan.
  4. Besides, India shares a great deal of trust deficit with China and Pakistan and has a history of conflict with both. As a result, even though suggestions to re-approach the project pragmatically have been made, no advocate has overruled the principle strands of contention that continue to mar India’s equations with China and Pakistan.

 

Sources: the Hindu.

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