CPEC Is An Indication Of A Bigger Problem For China

Arindam Mukherjee
Updated: May 22, 2022 20:30
The picturesque Makran Coastal Highway is part of CPEC

The conventional thinking among the Indian population, those that are aware of the behemoth named CPEC, is that it is China’s way of encircling India by debt-trapping Pakistan into a project that Pakistan does not have the financial capacity to absorb.

And they would be partially correct in assuming so. An infrastructural project of that size that is a primary mix of railway, roadway, oil and gas pipelines, with a host of allied systems like power plants to support it, is indeed an anomaly on the infrastructural map of Pakistan – a country not known for its economic or financial might.

But that is only a part of the picture; the other part of the picture shines a light on the issues that face China – the reason why China decided to invest north of USD 50 billion in a geography that has consistently presented trouble for its partners.

So, what does the picture look like?

China is a trading nation of massive proportions. As per 2019 reports, China exported more than USD 2.5 trillion, and imported close to USD 2 trillion, making it the largest exporter and the second largest importer in the globe.

Now a trader of this proportion needs trading routes. That is where matters of dependence set in and China, with its behavioural issues in dealing with its neighbours finds itself in a quandary along the Indian Ocean – which remains the chief lifeline to its trade.

The Malacca Strait is an extremely crucial point in the Indian Ocean to both India and China for a number of reasons (that have been covered extensively over the years by media and publications).

Both India and China enjoy certain advantages and disadvantages owing to their interest over this point through a number of treaties and agreements with the smaller states that are a part of the proximal geography of this region. However, for China, Malacca Strait accounts for a lion’s share of its imports and exports – which is open to violent disruption in case of trouble irrespective of which side finally ‘wins’.

That is where a functional CPEC makes a value-add of serious proportions.

Hindawi, a journal of advanced transportation published a research back in 2019. This research dealt elaborately in the finances considering all the major factors like routes, transport rates (of trucks and trains and ships), time, average speed, manpower etc and concluded that for China-bound ships to offload at Gwadar and bypass the rest of maritime length of Arabian Sea, Indian Ocean (and Malacca Strait) by way of overland transport through CPEC to Kashgar and then on to different destinations in mainland China would mean approximate savings of USD 71 billion and a distance reduction of approximately 12000 kms. (This research only considered China’s trade with the Gulf region, Germany, France, and the Netherlands).

To those accustomed to the partial picture shared at the beginning of this article, CPEC – under this light, acquires a different dimension; an investment of such massive dimensions (both money and stake) in the most unstable region of South Asia suddenly makes it look like a perfect geopolitical tool for anyone looking to exploit a vulnerability.

The US undertook an ambitious pipeline project back during the first decade of the new century. It was called the Baku-Tbilisi-Ceyhan Pipeline, or BTC for short. BTC is an 11-partner-consortium owned pipeline in the Caucasus region, aiming to collect oil from the Caspian Sea basin and open up the produce to the market (chiefly EU), through the Black Sea-Mediterranean Sea. With a length of slightly more than 1700 kms, this pipeline has to travel through six extremely volatile zones: Nagorno-Karabakh, Chechnya, Dagestan, South Ossetia, Abkhazia and Turkish Kurdistan.

Fully functional now, the BTC today carries only 1% of the global supply of oil and is perhaps not cost-effective at all for the kind of security it demands, but it has taught a valuable lesson to the West about investing in immovable assets in conflict-prone regions.

BTC cost the US somewhere around USD 2-3 billion. CPEC is a goliath in comparison. Add to that Pakistan’s recent change of status quo and a renewed American interest in the region, trouble in Afghanistan in the shape of a resurgent ISKP – one that the Taliban is going to find difficult to control, the different Islamist movements rearing their heads in the central Asian landscape, and the CPEC suddenly does not look as much a strain on Pakistan as it does on China.

Eurasian Times once ran an article where it emphasized on the urgent need for a shift of focus of China to the Northern Sea Route and the Polar Silk Road, and not wait for a possible airstrike on Gwadar in case of an open war. But with choke points like the Bering Strait, or China’s predatory claim on the Kamchatka Peninsula of the Russian East that would put it in confrontation with Russia, or Japan’s genuine security concerns, the Polar Silk Route – even conceptually – is far from a smooth sail either.

The BRI, or the CPEC (as a part of the BRI) would make sense with stable partner states. Beijing probably lifted the headline of the US handling unstable partners in the 20th century to preserve its supremacy. But it looks like the pages which described the way these partners were handled by the US have been left intact.

One does not invest in and build expensive land routes along corridors that have secessionist tendencies (Xinjiang), or have reverted to medieval mindedness (Afghanistan) or are threatening to go medieval (post-USSR-CAR) or are known to use terrorism as foreign policy (Pakistan); the same way one does not invest in one ambitious project after another with little or no guarantee on returns.

Many experts are of the opinion that China might crumble under its own weight. If that comes to pass, these uncertain investments could well be those crucial few straws that finally broke the camel’s back.

 

(Arindam Mukherjee is a Calcutta-based author and a Learning & Development professional who likes to dabble in Eurasian geopolitics during his spare time.
Disclaimer: Views expressed above are author’s own.)

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