Pakistani Fear that CPEC Will Be Another ‘East India Company’


The China-Pakistan Economic Corridor (CPEC), a collection of infrastructure projects that are currently under construction throughout Pakistan is being financed by China but is creating some stir in Pakistan recently. In November, the announcement of Pakistan withdrawing its proposal of including Bhasha-Diamer Dam which was earlier part of the CPEC.

The problem arises when the World Bank and ADB refused to fund the project until they get a ‘No Objection Certificate’ from India. Pakistan on the other hand approached China instead of India in May and was committed help from Beijing to get the 15 years long-stalled project get a head start. But due to some unacceptable preconditions regarding the ownership, maintenance costs and collateral security, Pakistan’s glee of two years ago was short lived.


When Chinese President Xi Jinping visited Islamabad on April 20, 2015, he was warmly welcomed by the Pakistani leaders with a wild hysteria for the gifts he was bringing along. Xi offered a great deal, the kind Pakistan could not refuse- a proposal for CPEC that was going to cost $46 billion and the amount was later increased having all paid by the Chinese.

This gigantic project was supposed to cover energy and infrastructure projects and had its aim to push the under-performing economy of Pakistan. Xi also boasted about the friendship between the two countries during his visit stating that it was like his ‘second home coming’.

The CPEC project covering Kashgar through Gilgit-Baltistan to Gwadar was going to provide double the FDI by China that Pakistan had received since 2008, which probably shone in eyes of the receiving country that it led to temporary and mathematical blindness.

With the military-political agreement involved, they skipped the fact that Chinese investment was about 20% of Pakistan’s $270 billion economy which will make the debt to be paid around $90 billion by 2030. The project was entirely designed by the China Development Bank and the National Development Reform Commission of the Chinese government.

Nawaz Sharif government, in March, informed the Pakistani National Assembly that across the CPEC projects, the Chinese firms were offered with many tax concessions for having to work in unsettled zones. The proposal is likely to handle a nation which is extremely dependent but on the other hand provides access to water port in the Arabian Sea which can help to take on a rival in south Asia.

China had at least 3 major interests in the proposal of CPEC as it was important for their grandiose Belt Road Initiative.

The primary objective was Development of Gwadar and the infrastructure projects of roads and rail linkages across the country. This in turn provides them with one astounding perk of getting the access to Gwadar for geostrategic and economic reasons.

The next one is establishing a security and communication grid in Pakistan by launching a fiber optic link between Pakistan and China as part of the new CPEC plan. The corridor will pass through the restive Balochistan and the Khyber-Pakhtunkhwa provinces.

Due to the security issues, Pakistan Army has deployed two special security divisions to guard the Chinese labour from Gwadar to Rawalpindi and Khunjerab. Chinese Transmission carrier is also hoped to popularise their culture while keeping security as the project includes a system of monitoring and surveillance across Pakistan

The third huge mileage for China is to get control over Pakistan’s agriculture in order to feed Kashgar district of Xinjiang which is currently broke. Taking thousands of acres of Pakistani agricultural land on lease will give Chinese companies a hub for for mechanisation and scientific techniques for livestock breeding, hybrid varieties and precision irrigation etc.

Pakistani parliamentarians are anxious about the situation as it might be the indication to receive another East India Company.                                                       

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