Why China Has Stalled CPEC Project

Table of Contents

The news

The China–Pakistan Economic Corridor (CPEC) is an economic route stretching from western China through Pakistan to the Indian Ocean coast. It is part of China’s Belt and Road Initiative.
CPEC is a collection of infrastructure projects that are under construction throughout Pakistan since 2013.
Originally valued at $47 Billion, the value of CPEC projects is worth more than $70 Billion as of 2020.

The Chinese Communist Party (CCP) has maintained that CPEC will bring political stability and economic resilience to Pakistan.
According to Chinese officials, the CPEC will create around 3 million jobs in Pakistan by 2030 and will provide an alternative pathway for exports and energy imports from West Asia to China.

The timelines of the CPEC is facing hurdles in Pakistan.
The crucial 10th meeting of CPEC’s Joint Cooperation Committee (JCC) has been unexpectedly deferred.
The reasons for the adjournment of the JCC meeting are believed to be disagreements between the two countries on the future roadmap for industrial cooperation and also on the Industrial Parks and Special Economic Zones (SEZs) earmarked under the CPEC.

Chinese Communist Party has halted some of the CPEC projects
- Imran khan government cleared US$ 6.8 billion for the Mainline-1 (ML-1) rail upgrade to double the speed of trains.
- The ML-1 project is the costliest project of the CPEC, with 90 percent finances made available by the Chinese.
- However, Beijing has been reluctant to make progress on ML-1 rail upgrade agreement till date.

The politics of Pakistan
- CPEC was formalized in 2015, during former Prime Minister Nawaz Sharif tenure.
- The Sharif government took great pride and credit for the overarching project.

Corruption
- In 2018 itself, the World Bank had cautioned the participating countries in the BRI projects about the impending debt risks, stranded infrastructure, social risks, and corruption.
- All these risks propounded by the World Bank have come true for the CPEC.

Corruption
- Former army official Gen. Asim Saleem Bajwa was appointed the chairman of the CPEC Authority.
- In August 2020, Pakistan media reported that, Asim Bajwaa amassed tonnes of undisclosed wealth during his tenure as the chief of the CPEC Authority and acquired offshore assets with his wife and brother.
- Despite protests, Bajwa refused to step down from the post of the chairman of the CPEC Authority. The Imran Khan government has refused to investigate the corruption charges in the CPEC projects.
- Chinese officials expect that about 80 percent of investments in the CPEC is lost to corruption and this leakage is difficult to avoid.

Insurgency
- Baluchistan Liberation Army (BLA) has intensified its demands for Baloch independence, blaming Beijing for exploiting and making the province more volatile.
- Growing corruption, promises of jobs not materialising, rampant exploitation of natural resources and increased Chinese presence have triggered anti-state insurgency among the people of Baluchistan.