China Pakistan Economic Corridor (CPEC)

Syllabus: General Studies Paper 2

The CPEC is bilateral project between Pakistan and China. Its stated objective is to enhance connectivity across Pakistan with a network of highways, railways, and pipelines accompanied by other infrastructure development projects.

• Under CPEC plan, China will invest in industrial power stations, roads and railways from Kashgar in Xinjiang (China) to Gwadar port (Pakistan) in the 3000 km long belt.
• The proposed project is financed by heavily-subsidized Chinese loans, disbursed to Pakistan Government by Chinese banking giants such as China Development Bank, Exim Bank of China and Industrial and Commercial Bank of China.
• CPEC is a component of OBOR (One Belt One Road) initiative of China.

China’s Interest in CPEC

• China is interested in CPEC because it will help it to access the Middle East and Africa from Gwadar Port, enabling China to access the Indian Ocean.

Pakistan’s Interest in CPEC

• China will support development projects in Pakistan to overcome the latter’s energy crises and stabilizing its faltering economy.

India’s stand

India is against joining CPEC due to the following reasons:

• Passes through a disputed area: China’s insistence on establishing the CPEC project through PoK is seen by India as infringing its sovereignty as it passes through disputed territory of Gilgit-Balistan.
• If CPEC project gets implemented successfully, this would hamper India’s strategic interests in the South Asian region. It will serve Beijing’s strategic ambition to encircle India.
• If India joined CPEC, it would legitimize the territorial claims of China-Pakistan over the land that actually belongs to India.
• China’s interference in Kashmir: India shares a great deal of trust deficit with China and Pakistan and has a history of conflict with both.