China’s friendly grip may end up ‘swallowing’ Pakistan

Chinese money pouring into Pakistan is not gratis but are largely loans that will need to be paid back

An ally through the last several decades since independence, China has stood steadfast in its ties with Pakistan, crucial for both countries as a political counter to India. Image: iStock

If India is locked in a messy wrangle with China on the border issue, Pakistan too is in a peculiar soup of sorts caused by its close friendship with Beijing.

The bear hug of friendship from across its northern border is squeezing Pakistan, sparking fears that the country may be heading into a giant debt trap with China, to a point where the bonhomie could even encroach on its sovereignty.

An ally through the last several decades since independence, China has stood steadfast in its ties with Pakistan, crucial for both countries as a political counter to India. In recent years, with Beijing emerging as a big global power practising its home-grown capitalism, it has sought to expand its footprint across the world through the Belt-and-Road Initiative (BRI).

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No surprise that China has exploited its relationship with Pakistan to sign the $62 billion China-Pakistan Economic Corridor (CPEC) deal, considered the flagship project under the BRI. At the heart of this corridor is a highway that runs from Tibet all the way to the Gwadar port in Baluchistan, a road that will open up the Arabian sea for Chinese goods.

The CPEC also involves a railway network that will link Pakistan to Xinjiang in southern China and includes a complete overhaul of the Karakoram highway which runs through Pakistan-controlled Gilgit Baltistan.

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On paper, the deal is a win-win for both—huge investments for Pakistan and easy access for China to a strategically-located port besides, of course, a substantial market.

The trouble, however, stems from what is not written in the contract. For example, the Chinese money pouring into Pakistan is not gratis but are largely loans that will need to be paid back. Under the deal, Islamabad by 2023 will have to return $21.8 billion of commercial loans and $7.75 billion taken as bilateral debt to Beijing.

But considering that Pakistan has not been doing too well economically for several years now it is doubtful whether it can ever return the loans. In July 2019, it was the recipient of an IMF bailout to the tune of $6 billion.

As a quid pro quo, China will eventually end up acquiring ownership and controlling large tracts of land housing Chinese workers and businesses. Nine Special Economic Zones (SEZs) are being built under the CPEC. Plans are afoot to construct a “Chinese-only” township that, as the name suggests, will not be accessible to Pakistanis. Reports say China has bought land extending to 3.6 million square feet in Gwadar to build a colony for at least half a million Chinese workers.

China has already shown that it means business of a kind not seen in recent times. Take the case of the Hambanthota port in Sri Lanka. Unable to service the debt of $1 billion for the port, Colombo in 2015 handed it to China on a 99-year lease—which leaves the coast clear to Beijing to use it as it wants. The port is of strategic importance and gives China valuable foothold in a part of the region that it could have only dreamed of earlier.

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Meanwhile, in Islamabad, the government has little choice but to accommodate China’s diktat. But this necessarily may not be to the liking of locals along the CPEC. There have been attacks on Chinese workers, clashes between the police and the Chinese and an increasing ferment in the already troubled Balochistan that has witnessed secessionism for several decades now.

In November 2018, Baloch separatists attacked the Chinese consulate in Karachi—seen as the most audacious coming after other sporadic attacks targeting Chinese individuals. Much of the centrepiece highway in the CPEC plan, incidentally, runs through Balochistan. Over 60,000 Chinese workers are reportedly working in Pakistan on the CPEC.

In another incident a couple of years ago, at Khanewal between Bahawalpur and Faisalabad, reports said Chinese workers building a highway clashed with the police for not being allowed to leave their campus to go into a nearby town. Police insisted that they would accompany the Chinese who refused to be monitored. The police then blocked them from leaving, leading to clashes.

Politically, Pakistan is also caught in a fix as two of its closest allies China and the United States have mutual problems of their own. Washington has been consistently warning Islamabad not to get any closer to Beijing. Reports quoting US administration officials term the CPEC deal a “debt trap”, which has been shrugged off by Pakistani officials who say they cannot be bothered about the larger politics between Washington and Beijing—an indication that Islamabad is in no position to offend the Chinese on US instigation.

There are other problems too in China-Pakistan relationship that could blow up unexpectedly. The treatment to the minority Uighur population in Xinjiang has outraged Muslims around the world including in Pakistan. China has pressured its allies in the Muslim world not to make it an issue but the issue simmers with no way of knowing when there will be a blowback.

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Though there has been no public outcry in Pakistan, sporadic attacks have targeted the Chinese. According to reports, in 2012 a Tehreek-e-Taliban Pakistan (TTP) militant killed a Chinese tourist in protest against Beijing’s treatment of Uighur Muslims. But in recent years, such attacks have reduced. Prime Minister Imran Khan has categorically said he will not comment on China’s treatment of the Uighurs.

However, militant groups like the Turkistan Islamic Party (TIP) are reportedly active in Gilgit-Baltistan, particularly the Wakhan Corridor, which links Afghanistan via Gilgit-Baltistan to China’s Xinjiang region.

For its neighbours in South Asia, including India, the aggressive expansionism of China is clearly Beijing’s new face. As with any other capitalist country, China too needs markets to expand and hold on to its economic gains. Pakistan besides Sri Lanka and Nepal are easy pickings. India, for the record, has declined to be part of China’s BRI.

The ongoing stand-off and clashes in Ladakh’s Galwan valley was triggered off after the inauguration of a new all-weather 255 km Darbuk-Shyok-Daulat Beg Oldie road linking Leh to the Karakoram pass by India on its side of the Line of Actual Control. This, the Chinese fear could enable a strategic advantage for India over the Karakoram highway (part of the CPEC) that runs from Kashgar in China’s Xinjiang via Gilgit-Baltistan to Abbottabad in Pakistan.

The friction with India needs to be seen in this context, where China will go to any lengths to prevent even if only a potential threat to its Belt and Road Initiative and its economic domination. Beijing’s edgy reaction, by encroaching on Indian territory, is also an unintended warning to Pakistan that it cannot get away from China’s “friendly” grip even if it wants to.

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