Developments regarding the security of CPEC were the prominent news of this week. China handed over two ships to Pakistan for the joint security of CPEC sea route. Chinese ambassador to Pakistan, Sun Weidong, conveyed China’s satisfaction on security arrangements for CPEC. The English daily, The Express Tribune, reported that the government of Pakistan has been thinking over the idea of treating the Chinese funding under CPEC as FDI. A report of China Central Television (CCTV) said that China’s exports to Pakistan have considerably increased in the aftermath of launching of CPEC. A bench of Peshawar High Court gave the prime minister and planning, development and reforms division a fortnight to come up with answer to a petition filed by KP Assembly Speaker Asad Qaiar.
Ships for Gwadar Port:
China handed over two ships to Pakistan for the joint security of CPEC sea route.[1] The ships which were built in China and equipped with the state-of-art guns were handed over to Pakistan Navy in a ceremony at Gwadar port.[2] These ships are named as Hingol and Bisol after the two nearby rivers. In addition to these two ships, China plans to give Pakistan two more ships for the same purpose. These ships are under construction in China and will be named as Dasht and Zhob.[3] Pakistan and China are cautious about the security of Gwadar port particularly against the backdrop of India’s increasingly assertive regional diplomacy. New Delhi has, on the one hand, shown serious reservations against the CPEC and on the other, ramped up its strategic cooperation with Washington. The U.S. has been keen on countering China through India’s rise in the India Ocean. It is under these circumstances that China and Pakistan are increasing their naval cooperation to secure Gwadar port from any challenge that might emanate from the Indian Ocean.
CPEC funds as FDI:
The English daily, The Express Tribune, reported that the government of Pakistan has been thinking over the idea of treating the Chinese funding under CPEC as FDI.[4] The $51-$55 billion that is considered as loan might be economically problematic for Pakistan in the long run. Some experts including the International Monetary Fund believe that the repayment of loans for CPEC will outweigh the economic gains of the project and that in turn will lead to problem of balancing the current accounts bill. The paper quoted an unidentified source as saying that for this reason the government might change certain accounting definitions to declare the Chinese money as investment. It is not clear yet whether merely changing name of this funding from loans to FDI will resolve the issue as China and not the Pakistani government is the primary donor. However, it might lead to bilateral consultations between the two governments in the future to ponder over this economic complexity.
Satisfaction over CPEC Security:
Chinese Ambassador to Pakistan, Sun Weidong, in a meeting with Pakistan’s Chief of Army Staff, General Qamar Javed Bajwa, conveyed China’s satisfaction on security arrangements for CPEC.[5] The envoy also acknowledged and appreciated Pakistan Army’s efforts in combating terrorism and militancy.[6] The message can be interpreted as success of Pakistan’s strategy of ensuring the security of CPEC. Militants groups in Pakistan have targeted the Chinese workers and projects from time to time. Since the beginning of wok on corridor, serious questions have been raised whether Pakistan would be able to secure CPEC from its homegrown militants. But the government has taken this issue rather seriously. In addition to launching the successful military operation of Zarb-e-Azb in 2014, Pakistan has established a Special Security Division of 12,000 security personnel for the protection of Chinese workers involved in CPEC projects.
Increase in Chinese Exports:
A report of China Central Television (CCTV) said that China’s exports to Pakistan have considerably increased in the aftermath of launching of CPEC.[7] The report noted China’s exports to Pakistan rose from 11 percent to 14.1 percent.[8] With bilateral trade of $15 billion, China is Pakistan’s largest trading partner. However, the trade equation has favored China as Pakistan is running trade deficit of $6.2 billion with its neighbor.[9] On the other side, this increase highlights the feasibility of gigantic economic potentials that have been attached to CPEC. The project that has yet to be launched in full can play important role in boosting Pakistan’s exports not only to China but also other regions through the sea-bound trade via Gwadar port.
PHC on CPEC case:
A bench of Peshawar High Court gave the prime minister and planning, development and reforms division a fortnight to come up with answer to a petition by KP Assembly Speaker Asad Qaiar.[10] KP assembly had decided in November last to move the court for multiple directions to the federal government to develop the western route and other projects of CPEC in the province. KP has long resented that the central government has intentionally neglected the progress on the western route. It maintains that the projects in Punjab has been prioritized while KP has been given little share in the projects of CPEC. The court’s order comes on the heel of sixth Joint Cooperation Committee (JCC) meeting that was also attended by KP’s Chief Minister and who had shown satisfaction with the talks. Taking the last meeting of JCC into consideration, the central government seems to have mustered some provincial consensus behind CPEC and that will strengthen its position in front of court.
Miscellaneous:
Minister for Planning, Development and Reforms, Ahsan Iqbal, has rejected the news that the government has made any changes in the western route of CPEC.[11] The Chinese government has assured KP government to include industrial zone at the Karnal Sher Khan interchange in Swabi in CPEC.[12]
This report is compiled and written by Abdur Rehman Shah, Research Associate at the Center for Research and Security Studies (CRSS), Islamabad.
[1] Radio Pakistan. (2017, January 15). 2 Chinese ships arrive for Gwadar port security. Retrieved January 16, 2017, from http://www.radio.gov.pk/15-Jan-2017/2-chinese-ships-arrive-for-gwadar-port-security
[2] Baloch, B. (2017, January 16). Two Chinese ships arrive for Gwadar port security. Retrieved January 16, 2017, from http://www.dawn.com/news/1308491/two-chinese-ships-arrive-for-gwadar-port-security
[3] News Desk. (2017, January 15). Two Chinese vessels arrive to secure Gwadar port. (2017, January 15). Retrieved January 16, 2017, from http://tribune.com.pk/story/1295572/two-chinese-vessels-arrive-secure-gwadar-port/
[4] Rana, Shahbaz. (2017, January 10). Govt mulls treating CPEC funds as FDI . (2017, January 10). Retrieved January 16, 2017, from http://tribune.com.pk/story/1289773/govt-mulls-treating-cpec-funds-fdi/
[5] Dunya News. (2017, January 15). China satisfied with Pakistan’s security arrangements for CPEC: ambassador – Pakistan. Retrieved January 16, 2017, from http://dunyanews.tv/en/Pakistan/370193-China-satisfied-with-Pakistans-security-arrangeme
[6] Idrees, M. (2017, January 13). Chinese envoy meets COAS, expresses satisfaction over security of CPEC. Retrieved January 16, 2017, from https://en.dailypakistan.com.pk/headline/chinese-envoy-meets-coas-expresses-satisfaction-over-security-of-cpec/
[7] Pakistan Today. (2017, January 14).China’s exports increased to Pakistan under CPEC. Retrieved January 16, 2017, from http://www.pakistantoday.com.pk/2017/01/14/chinas-exports-increased-to-pakistan-under-cpec/
[8] The News. (2017, January 15). Chinese exports to Pakistan increase following CPEC launching. Retrieved January, from https://www.thenews.com.pk/print/179343-Chinese-exports-to-Pakistan-increase-following-CPEC-launching
[9] Iqbal, S. (2016, August 16). Trade deficit with China swells to $6.2bn. Retrieved January 16, 2017, from http://www.dawn.com/news/1277774
[10] Bureau Report. (2017, January 11). PM, planning sec told to reply in CPEC route case. Retrieved January 16, 2017, from http://epaper.dawn.com/DetailNews.php?StoryText=11_01_2017_007_004
[11] Our Correspondent (2017, January 11). Speculation on western route baseless. Retrieved January 16, 2017, from http://tribune.com.pk/story/1292238/allaying-concerns-speculation-western-route-baseless/
[12] Our Correspondent. (2017, January 11). Swabi industrial zone to be included in CPEC. Retrieved on January, from http://tribune.com.pk/story/1291053/swabi-industrial-zone-included-cpec/