Pakistan has long flashed China’s friendship and support via CPEC and military acquisitions as a geostrategic card that it is willing to play in South Asia especially qua its archrivals India and Afghanistan over which it has always desired to exercise strategic depth. The Pakistani friendship with China began in the 1960s with Pakistan seceding a part of the illegally occupied Jammu & Kashmir to China. This partnership later transformed into a client-vendor relationship during the mid-80s and 90s when Pakistan relied on Chinese nuclear blueprints or missiles to compete with India. Various Pakistani missiles (like Shaheen) are primarily of Chinese/North Korean origin. It was then that this Axis of Evil developed between Pakistan, China and North Korea with AQ Khan, the global proliferator supplying North Korea with nuclear blueprints in return for North Korean missile technology. This covert friendship between Beijing and Islamabad was formally declared in 2015 when President Xi signed an agreement worth $ 46 billion for CPEC (China-Pakistan Economic Corridor) as an extension to its ambitious One Belt One Road project. From then on Pakistan has long flashed its Chinese friendship as the answer to India’s rise as a global player following the Modi doctrine of Multi-Alignment, while ignoring the long-term ramifications of this partnership with China.
While China and Pakistan’s military and nuclear cooperation have been extensively reported, the geoeconomic and geostrategic implications of the Chinese colonization of Pakistan via CPEC need to be analyzed. We must begin with understanding the Chinese geoeconomic model in South Asia which is very different from the one in Africa or Latin America where the focus has been on natural resources or cultural assimilation. In the South Asian region from Pakistan to Sri Lanka to Maldives to Afghanistan, China is seeking to secure strategic depth owing to the vulnerabilities it faces in the Straits of Malacca or the South China Sea in the case of prospective conflicts. Thus, China’s investments in these countries coincide with its geostrategic interests in the form of OBOR, CPEC or the Maritime Silk Route that is visible in the String of Pearls it is trying to ring around India in the Indian Ocean Region. While China’s stupendous growth via low-cost manufacturing has provided lucrative opportunities and partnerships for Cambodia, Sri Lanka, Nepal, and Pakistan through investments in mega infrastructure projects like Gwadar Port (Balochistan) or Hambantota Sea Port (Sri Lanka); the hidden parts of the terms and conditions of these soft loans reveal the complete picture of the Chinese strategic play in the region.
The Chinese economic model in South and South East Asia closely resembles the Tributary system it employed in its Empire days. The Tributary system which traces its roots back to the Han Empire (206-200 BCE) was a traditional Chinese system for managing foreign relations for seeking compliance from the neighboring states in political, economic, defence and diplomatic matters concerning China. The Tributary system was China’s way of seeking obedience from “the so-called inferior rulers” around it to the Emperor. In return, they were granted trade privileges for accepting their inferior status in Tributary Trade with China. This system reached its peak during the era of the Ming Dynasty (1368-1644) when the Chinese had contacts with many such Tributary countries like Bengal, Sri Lanka, Sumatra, Java and as far as Hormuz to the coast of East Africa. China has craftily deployed the same Tributary model in Cambodia and Sri Lanka and other countries in the region when it comes to trade and investment. China is now Cambodia’s biggest military and economic aid provider; it has nearly given it US$ 3 billion concessional loans since 1992. A 2016 IMF report details how Cambodia’s bilateral public debt with China has risen to $3.9 Billion, which is a staggering 80 percent of its entire debt.
A similar debt trap is being faced by Sri Lanka where China owns $8 billion of its total $64.9 billion debt. Sri Lanka’s borrowings of $301 million from China at an interest rate of 6.3% have further compounded this by massive Chinese investments in its mega infrastructure projects. In the mega port project of Hambantota, Chinese firms were granted a 80% stake with a 99-year lease causing unrest and protests which lead to a renegotiation of terms with the Chinese company agreeing to divest 20% share in the port project while holding on to a controlling share of over 51%. The Sri Lankan debt trap has become so bad that in April 2016, the Sri Lankan Government had to seek a $1.5 billion bailout from IMF and privatise some of its SOE to repay the heavy interest on the Chinese loans. China is attempting a repeat of such colonization in the form of Tributary trade in Nepal and Bangladesh using its AIIB Bank to fund mega development and reconstruction projects in the form of soft loans as debt traps. Nepal has already indicated its keenness to hop onto the OBOR bandwagon.
The Chinese model of Tributary trade is highly lopsided in favour of the Chinese economy while offering a mirage to the tributary states in the form of trade privileges and massive investments which are nothing but instruments of colonisation much like the East India Company. The same model of Tributary trade is at the core of the Sino-Pak geostrategic alliance and CPEC which Pakistan considers a game changer; oblivious of the ramifications that would ensue on it and the region as a whole.
The Chinese mega-project of CPEC, the core of the Sino-Pak Axis consists of various mega infrastructure and developmental projects running across the occupied territories of Jammu & Kashmir all the way to Balochistan; connecting the Karakoram Pass with Xinjiang and Gwadar port on the Persian Gulf. The Chinese trade volumes with Pakistan have increased from $800 million in 2000 to nearly $13 billion in 2013 after it signed a FTA with China in 2007. The Chinese inflow of consumer goods has severely hit the domestic industry in Pakistan from leather to chemicals to high-end electronics, handbags, sanitary ware, shoes, cell phones etc.
After signing CPEC with Pakistan, China has started bankrolling huge infrastructure projects like highways, energy plants and industrial corridors with soft loans again providing the mirage of economic development to another Tributary state. These mega infrastructure projects worth $46 billion in CPEC would ultimately end up costing Pakistan $90 Billion over 30 years as reported in a Pakistani daily. China has also recently bought stakes in the Karachi Stock Exchange, is now dictating policies of Pakistan’s energy plants and employing its own people on the sensitive parts of CPEC causing resentment among the local population. Similar concerns have also been raised by the Pakistani senators who have argued that CPEC will ultimately result in another East India Company type of colonization of Pakistan and cause it to fall into the Chinese debt trap. These warnings on CPEC have also been issued by IMF in its 2016 report which has been dismissed by the ruling Punjabi elite whose hatred for India outweighs selling out their own people to the Chinese colonisers.
At the heart of CPEC is the port of Gwadar in Balochistan which is being developed by China. Gwadar will connect the Persian Gulf with Central Asia through CPEC as an extension of the strategic OBOR project. The Gwadar Port project under development has faced attacks from the Baloch rebels/nationalists who have repeatedly targeted the Chinese engineers in the area as well as critical infrastructure by blowing up Gas pipelines. Balochistan, one of Pakistan’s largest provinces has huge reserves of natural resources which China wants to tap into i.e. 25.1 trillion cubic feet of Natural Gas. The Balochis have already rebelled against the Pakistani state and its Punjabi domination that have devoured the resource-rich province and benefited the most while leaving the Balochis to languish on the sidelines with minor royalties in the mega projects. Moreover, all the critical and important jobs in this province are being outsourced to China. Further, to safeguard Gwadar and CPEC, Pakistan has carried out mass executions of Balochis in the region and even allowed China to deploy it’s Marines corps and submarines at Gwadar to safeguard its investments. This increasing leverage to China for managing Pakistani affairs will inevitably lead to discontent, economic despair and much more by the locals in the neglected provinces of Balochistan, Sindh and occupied Gilgit-Baltistan.
The Sino-Pak model of Tributary trade will also have huge ramifications for South and Southeast Asia. We have already seen how China has hollowed out Cambodia and Sri Lanka in the garb of soft loans for mega infrastructure projects by putting these countries into a debt trap. The Sino-Pak alliance will also impact Afghanistan and Central Asia. The Chinese dream as we have elucidated mandates devouring the precious resources from its Tributary states like Afghanistan over which Pakistan also seeks to maintain strategic depth; considering it a vassal state. China is eager to mine the precious mineral resources like copper, gold etc. in Afghanistan, for which it seeks the active participation of Pakistan as a security provider with the Afghan Taliban and other private mercenaries to securitize its investments. China also plans to connect CPEC with Central Asian routes of OBOR (Silk Route project) to harnessing the vast untapped energy (Oil/Gas) and other mineral resources.
The emerging Sino-Pak axis is further confounded with Russia establishing links with Afghan Taliban (once its sworn enemy) to prevent the rise of Islamic State in Afghanistan and Central Asia. Russia held its first trilateral meet on Afghanistan in early 2017 in Moscow with Pakistan and China, keeping India, the US, and even Afghanistan away from the negotiating table. Iran has also sought cooperation with Taliban. Considering Pakistan’s infamous rent-a-terror-group model and the Chinese tacit backing of Pakistan’s proxies like Afghan Taliban; this Axis of Evil will only seed further chaos in the region.
Apart from Afghanistan the other country which will be directly impacted by the rise of the Sino-Pak Axis will be India adding to its security concerns. This alliance directly undercuts India’s strategic and national interests with projects like CPEC originating from the occupied territories of Jammu & Kashmir which are illegally occupied by Pakistan. India has time and again raised its objections to Chinese infrastructure projects in PoK, Gilgit-Baltistan which are an integral part of Jammu & Kashmir in India. Recent rumors that Pakistan could declare Gilgit-Baltistan as its 5th province under its constitution only underscores these sensitive implications as China has repeatedly raised concerns about the legalities of contracts and projects in occupied territories. India has vociferously objected to these developments which have also been repeated by the local populace in Gilgit-Baltistan who have called for strikes against the China-Pak Economic Corridor (CPEC). Beyond CPEC, the Sino-Pak axis also presents a greater challenge for India in securing its porous borders with Nepal and Myanmar where ISI has been training and sending in terrorists, rebel groups etc. armed with Chinese arms/weapons. China has also been using Pakistan as a tool to stunt India’s rise as a global power from opposing its membership at NSG and UNSC to blocking its bid to declare Jaish Chief Masood Azhar as an international terrorist at UNSC.
India must now not only counter this axis but also draw up deterrence plans for augmenting its military capabilities in the border areas with China in North and North East India, modernize its armed forces and develop a Blue Navy with to achieve dominance over the Indian Ocean Region. Further, India must also augment strategic alliance with countries like the US to counter the Sino-Pak axis and develop its relationship with Iran on Chabahar Port; creating a gateway to Afghanistan and Eurasia with the North South Transport Corridor (NSTC) to counter CPEC. It should also strive to reduce its trade surplus with China while remaining cautious on Chinese investments in critical sectors like Infrastructure, Telecom, Power, and Railways etc. India could also leverage on Russia’s influence in Iran and Central Asia to counter the Sino-Pak Axis.
While Afghanistan and India will be bear the larger brunt of the Sino-Pak axis, it would behoove all the other democracies in the region to come together and fight this Axis of Evil as Pakistan will never give up its terror financing ways while China will not rest till it achieves complete economic, military and security domination over all the countries in South Asia and later Asia-Pacific in its quest to unseat the current sole superpower: the United States. As for Pakistan, the friendship that it considers highly prized comes with a bed of thorns and not roses as it imagines and it is only a matter of time that these thorns will challenge Pakistan’s sovereignty, security, independence, and freedom. Only this time around, its erstwhile saviour, the United States will not be there with a bailout. With CPEC, Pakistan has written its epitaph. It is not a question of if, simply when.