Imran Khan at Beijing Forum: Is CPEC’s Sparkle Starting to Fade?

What Pakistan is looking for now is an expansion of the Chinese commitment to bread and butter issues.

China’s President Xi Jinping, right, shakes hands with Pakistan’s Prime Minister Imran Khan before a meeting at the Great Hall of the People in Beijing Sunday, April 28, 2019. 

(Photo: AP)  

Pakistan Prime Minister Imran Khan was one of the 40 or so heads of state and government present at the 2nd Belt and Road Forum (BRF) in Beijing last week. In his speeches and remarks, he strongly batted for the Belt and Road Initiative (BRI) and its star project, the China Pakistan Economic Corridor (CPEC).

Responding to Chinese President Xi Jinping’s speech at the opening ceremony of the BRF, Khan said that the BRI was “a model of collaboration, partnership, connectivity and shared prosperity” in a world of geopolitical uncertainty, rising inequality and trade barriers.

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Islamabad and Beijing’s political ties remain sound, and this was evident from the outcome of his meetings with Chinese officials, including President Xi Jinping and Premier Li Keqiang. Following Sunday’s formal meeting with Khan, President Xi Jinping reiterated the formulation that China and Pakistan were “iron friends”, and that Pakistan occupied a unique place in Chinese diplomacy.

Imran Khan’s 5 Suggestions for BRI

The theme of Khan’s remarks appeared to be the need of the CPEC to move away from the big industrial projects like the building of the Gwadar Port, power plants, dams and highways, towards more people-centric ones relating to climate change, socio-economic uplift and job creation.

In his address during the opening ceremony on Friday, Khan offered five suggestions for enhancing the BRI. They were: the need to address the issue of climate change where Pakistan had begun a massive tree plantation scheme in Khyber Pakhtunkhwa; the importance of establishing of a BRI Tourism Corridor; an anti-corruption cooperation arrangement; a poverty alleviation fund to aid national efforts, and, finally, a liberalisation of trade and investment flows to encourage the private sector to get involved in the projects.

The references to corruption were not surprising given the fact that in his election campaign in 2018, he had demanded an inquiry into the agreements entered into by the Nawaz Sharif government on the various BRI projects. Khan could not but have been happy to have heard Xi Jinping declare in his opening speech, that in pursuing the BRI, “everything should be done in a transparent way and we should have zero tolerance for corruption.” Whether or not the Chinese follow up on this and other policy correctives announced by Xi, is another matter.

Imran Khan Woos Chinese Businessmen, Expects Chinese Commitment to Expand

Addressing the Leader’s Roundtable at the BRF on Saturday, Khan said that the CPEC had had a transformative impact on Pakistan and its relations with China. He said that as a result of the scheme, the Chinese had helped build highways, modernised railroads, set up power plants, established a port and a Special Economic Zone.

But what Pakistan was looking for now was an expansion of the Chinese commitment to the bread and butter issues of agriculture, industrial development, socio-economic uplift and job creation.

However, the big project concept has not quite gone away. An important take-away from Khan’s visit last week was the reiteration of the Chinese commitment to rehabilitate and upgrade the Peshawar-Karachi rail line at an estimated cost of USD 8.2 billion.

In Beijing, the Pakistani prime minister also took the opportunity to woo Chinese businessmen. Speaking to a Pakistan-China Trade and Investment Forum in Beijing on Sunday, he said that “it has never been as easy to invest in Pakistan as it is right now.”

Khan told them that CPEC had transformed the relations between the two countries into a strategic partnership. Pakistan has been seeking to  project itself as a nation which is on the road to a major change. But, it will be sometime before its narrative is accepted by its interlocutors. The recent Cabinet reshuffle following the resignation of Finance Minister Asad Umar, because of the poor performance of the economy, also saw the appointment of Ijaz Shah, a former ISI official, as the country’s interior minister. Umar was the pointman for the Khan government’s negotiations with the IMF for a USD 8 billion bailout proposal, which has yet to be approved by the world body.

China’s Equidistant Position on India-Pakistan

India has not been too far from Khan’s mind. At his meeting with Xi and with the business forum, Imran raised the issue of ties with India and said that he hoped that after the elections the two countries could develop a “civilised relationship” and resolve the Kashmir issue through dialogue.

The Chinese have, however, adopted a somewhat equidistant position. China Daily reported Xi as saying that while “China firmly supports Pakistan in safeguarding its sovereignty and national dignity,” he hoped that “Pakistan and India can meet each other halfway and promote the stabilisation and improvement of Pakistan-India relations.”

CPEC Receding in Importance

But though Pakistan and the CPEC had an early billing as a star project of the BRI, it is now receding in importance, given Beijing’s desire to be more accommodating towards other players and to multi-lateralise its commitments where it can, and insist on internationally acceptable norms for bidding of projects. At the same time, China’s Central Bank and Finance Ministry are pushing Chinese companies to better assess the risks of providing loans to countries with the kind of debt burden Pakistan has.

Given the parlous state of its economy, the Chinese will not be too eager to put money down on projects when they know that the chances of repayment are not very good. As it is, the US has made it clear that the IMF bailout option should not be used to pay off Chinese creditors.

(The writer is a Distinguished Fellow Observer Research Foundation and a member of Naresh Chandra Task Force on Defence Reforms. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)