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Beijing Ramps Up Investment Push In Pakistan, Afghanistan, Despite Risks

In addition to a growing array of projects, CPEC will grant Beijing access to the Gwadar port in southern Pakistan, which is close to the Strait of Hormuz -- the world's most vital route for shipping oil.
In addition to a growing array of projects, CPEC will grant Beijing access to the Gwadar port in southern Pakistan, which is close to the Strait of Hormuz -- the world's most vital route for shipping oil.

China is cautiously increasing its role in South Asia by rejuvenating economic interests in Pakistan and forging closer ties to Afghanistan with peace talks between Afghan officials and the Taliban under way.

The enhanced footprint for Beijing in the region comes amid a flurry of activity this summer centered around breathing new life into the China-Pakistan Economic Corridor (CPEC), an estimated $62 billion bundle of projects that forms the cornerstone of China's sweeping Belt and Road Initiative (BRI), which aims to build infrastructure, expand trade links, and deepen ties across Eurasia and Africa.

"The Chinese want to do business, they don't want to be fighting wars," Ayesha Siddiqa, a research associate at London's School of Oriental and African Studies, told RFE/RL. "They want to control the region financially and benefit from that."

But while China's renewed push in the region shows the parties' willingness to move forward, Beijing faces tremendous obstacles as it tries to navigate the notoriously troubled political situations in Afghanistan and Pakistan.

The problems include the uncertain peace talks between the Afghan government and the Taliban in Doha and a series of corruption scandals within CPEC.

Meanwhile, Chinese BRI projects increasingly find themselves to be the target of Baluch and Sindhi separatist groups in Pakistan.

"This is China's neighborhood, it isn't some far-off area. So, there is a strong interest for Beijing to be involved," Rafaello Pantucci, a senior associate fellow at London's Royal United Services Institute, told RFE/RL. "But this region has long-standing issues and there is a reason why international donors aren't there. China now finds itself increasingly embroiled in these difficulties."

A Busy Summer

CPEC forms the backbone of China's presence in Pakistan and the recent spate of new deals marks a new phase in its development after years of delays and implementation problems that slowed down the pace of the initiative.

In June and July, Beijing inked $11 billion worth of deals with Islamabad, agreeing to finance two hydropower projects in the Pakistan-administered Kashmir region and an upgrade for the country's railways -- the most expensive Chinese project to date in Pakistan.

Chinese President Xi Jinping (right) meets with Pakistani Prime Minister Imran Khan at the Great Hall of the People in Beijing in November 2018.
Chinese President Xi Jinping (right) meets with Pakistani Prime Minister Imran Khan at the Great Hall of the People in Beijing in November 2018.

Beijing has also made moves to extend CPEC to Afghanistan, with experts saying China is looking to stabilize the country and improve its political and economic links to the country as U.S. troops look to leave Afghanistan, potentially by May 2021.

In August, China began pushing Pakistan to open key border crossings with Afghanistan to allow bilateral and transit trade that remain closed due to security concerns and Kabul recently signed a $2.2 billion contract to help export Afghan pine nuts to global markets.

The daily Financial Times also reported this month that Beijing has proposed "sizeable investments in energy and infrastructure projects" and offered to build a road network for the Taliban in hopes of ensuring a peaceful transition if there is a withdrawal of U.S. forces from Afghanistan.

Kick-Starting The Restart

While Pakistani Prime Minister Imran Khan's government worries about the long-term implications of becoming dependent on China, proponents hope the CPEC will give Pakistan the infrastructure boost needed to kick-start its economy at a time when Islamabad is struggling to attract international investors.

In addition to a growing array of projects, CPEC will grant Beijing access to the Gwadar port in southern Pakistan, which is close to the Strait of Hormuz -- the world's most vital route for shipping oil.

But the Chinese-financed project has also become embroiled in Pakistan's own tense domestic politics, with the country's influential military and civilian government jostling for control of the lucrative initiative.

The Pakistani military has so far managed to wrestle greater control through the creation of the CPEC Authority last year, a government body authorized to oversee BRI projects in Pakistan. Under a proposed law put forward this month by supporters of the army, the government would cede further ground to the military, granting it wide-ranging autonomy to implement CPEC with limited oversight.

According to Siddiqa, an expert on the Pakistani military, Beijing prefers to partner with the army as they are seen as more reliable and can guarantee the timely completion of projects that elected officials have failed to deliver.

Moreover, Siddiqa says military control helps ease concerns within the Pakistani elite that strategic territory could be given to China under the guise of CPEC. "Contracts with China by the previous government were drawn up in a very nontransparent way and it made the military nervous," she said. "It's not just about what kind of a share the military will get, it's about how much is being conceded to Beijing."

Navigating Pushback

But while CPEC has new momentum and Beijing is looking to extend it to Afghanistan, the project faces new obstacles from various forces inside Pakistan.

In August, a report was published alleging that Asim Saleem Bajwa, the retired general who heads the CPEC Authority and also serves as special assistant to Khan, used his influential position to help his family amass huge wealth.

The report led to a backlash on social media and calls for his resignation along with a further investigation. Bajwa offered his resignation as special assistant to the prime minister -- which was later rejected by Khan -- and has stayed on as chairman of the CPEC Authority.

There are several other developments inside Pakistan that could greatly slow down China's ambitions in the country.

The Tehrik-e Taliban, Pakistan's leading Taliban group, which operates out of Afghanistan, has announced the reunification of various splintered factions, leading some analysts to believe that Pakistan's internal security problems could threaten BRI projects.

Similarly, Baluch and Sindhi separatist groups in Pakistan announced an alliance in July aimed at attacking CPEC and Chinese interests in the country.

That development is likely to increase the security costs for BRI projects in Pakistan.

Baluch insurgents claiming to be aided by Sindhi separatists attacked Pakistan's stock exchange in June and, in 2018, three gunmen tried to enter the Chinese Consulate in Karachi before being killed in a shoot-out. The attack was later claimed by the Balochistan Liberation Army, a separatist group.

"Sindh and Balochistan are equally affected by the 'expansionist' and 'oppressive' resolve of China," said a statement from the Baloch Raji Ajoi Sangar, a merger of several Baluch separatist groups, and the Sindudesh Revolutionary Army, another separatist organization. "Through [CPEC], China aims to subjugate Sindh and Balochistan and occupy the coasts and resources from Badin to Gwadar.”

"Increasingly, China risks becoming a target in the region," Abdul Basit, an expert on South Asian insurgent groups at Nanyang Technological University in Singapore, told RFE/RL. "But China has the support of the Pakistani military and its own channels in the region, so these types of threats are unlikely to stop Beijing from [pursuing] its goals."

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    Reid Standish

    Reid Standish is an RFE/RL correspondent in Prague and author of the China In Eurasia briefing. He focuses on Chinese foreign policy in Eastern Europe and Central Asia and has reported extensively about China's Belt and Road Initiative and Beijing’s internment camps in Xinjiang. Prior to joining RFE/RL, Reid was an editor at Foreign Policy magazine and its Moscow correspondent. He has also written for The Atlantic and The Washington Post.

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