Negotiating the BRI: Insights from the China-Pakistan Economic Corridor
Negotiating the BRI: Insights from the China-Pakistan Economic Corridor
WRITTEN BY FILIPPO BONI AND KATHARINE ADENEY
7 June 2021
As celebrations were underway for the 70th anniversary of the establishment of diplomatic relations between Pakistan and China, the China-Pakistan Economic Corridor (CPEC) featured prominently in official remarks. Chinese President Xi “hailed the remarkable achievements attained” by CPEC, also adding that the economic corridor “has brought important benefits to the peoples of both countries and enhanced strong momentum for regional prosperity”.
Since its official launch in April 2015, the CPEC has been one of the most-watched set of projects within the Belt and Road Initiative (BRI). Having already injected around $25 billion into Pakistan since 2013, the CPEC not only has been dubbed the “flagship project” of the BRI, but it also holds a key role in Beijing’s global ambitions.
While the geopolitical implications of the CPEC, particularly for India and the United States, have been carefully scrutinised, less attention has been paid to the mechanics of how the BRI is unfolding on the ground in Pakistan. How do China and Pakistan negotiate the terms of CPEC deals? To what extent has Islamabad managed to exert agency in its dealings with Beijing? How does China adapt to the contexts it operates in? By now, the CPEC has been subject to much media, academic, and policy scrutiny, but these questions have not been answered.
Agency in asymmetrical relations along the BRI
In our recent report for Carnegie Endowment for International Peace — How Pakistan and China Negotiate — we trace the evolution of the CPEC against the backdrop of Pakistan’s domestic politics. In doing so, we show that Pakistani actors have wielded agency in important ways throughout the process, while Chinese actors at times have accommodated key Pakistani demands.
Recipient countries need to build mechanisms to ensure that technology transfers and training are integral to the development of BRI projects. Otherwise, these important issues may end up on the backburner.
This is important as the power asymmetry between the two partners — coupled with the impression that the BRI represents a unidirectional Chinese endeavour, not just in Pakistan but also globally — has contributed to the erroneous representation that Beijing is merely imposing the CPEC on its all-weather partners in Islamabad.
Take the Port of Gwadar, the jewel in CPEC’s crown. Although China’s strategic calculations are often emphasised, especially by Indian and US policymakers, the port of Gwadar was a Pakistani-initiated proposal in the early 2000s that was only later rebranded as a BRI project in 2013. All Pakistani governments over the past twenty years have encouraged China’s involvement in Gwadar, and Beijing sees the port as a strategic access point to the Indian Ocean.
In a similar fashion, the focus on energy projects was a Pakistani priority and an area in which Pakistan had agency in shaping how CPEC was unfolding on the ground The majority of CPEC investments in the first phase were in energy projects, with a particular emphasis on coal power plants. This preference for coal was part of Pakistan’s desire to diversify the composition of its energy markets. Such a goal was also in line with then Prime Minister Nawaz Sharif’s and his party’s (the Pakistan Muslim League-Nawaz) promise to end the country’s electricity shortages in order to be in a strong position for the 2018 elections.
Overall, our research into the BRI’s flagship project highlights China’s adaptive strategies in dealing with a host of Pakistani actors (including political parties, local communities, and the military) against the backdrop of Pakistan’s evolving political landscape. Rather than seeing Chinese activities in Pakistan as Beijing-driven, one-size-fits-all endeavours, these projects and efforts have been shaped by complex interactions between the interests of Chinese players and those of Pakistani political and economic actors. The case of the Rashakai Special Economic Zone (SEZ), chosen to be a priority SEZ for Pakistani political rather than economic reasons (despite its weak feasibility study) is a case in point.
What can CPEC tell us about other BRI projects?
Beyond the case of Pakistan and CPEC, understanding how the CPEC’s projects have unfolded to date offers important lessons for other countries involved with the BRI.
First, Pakistan’s experience illustrates the importance of identifying a clear set of priorities when countries deal with Beijing and for them to use the leverage they have. Pakistan, despite its weak international position and weak economy, has had agency in its dealings with China, as demonstrated by the examples related to the port of Gwadar and the energy projects discussed above. The experience of Pakistan demonstrates that, despite a slow start, it is possible to secure domestic political benefits from BRI investments. In the case of Pakistan, this meant addressing electricity shortages that were affecting the economy and everyday lives, as well as providing a boost to connectivity. Pakistan’s experience also illustrates that there are areas where it is more difficult for BRI recipients to negotiate, such as on the terms agreed with the independent power producers, given Pakistan’s weak FDI position.
Second, recipient countries need to build mechanisms to ensure that technology transfers and training are integral to the development of BRI projects. Otherwise, these important issues may end up on the backburner. Many CPEC projects include the construction of training facilities in Pakistan, but the timelines for the construction of these facilities have all too often fallen behind schedule.
Overall, our research demonstrates that it is vital to research the fine-grain details of the BRI in the recipient countries rather than relying on hyperbole, and the importance of tracking the changes over time. Such an approach, allows for a more balanced understanding of China’s BRI, as it unearths the complex set of dynamics that occur when these projects are negotiated and implemented.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Katharine Adeney is a professor of politics and the director of the University of Nottingham’s Asia Research Institute in the UK. She is the author of ‘Federalism and Ethnic Conflict in India and Pakistan’.
Filippo Boni is a lecturer in politics and international studies at The Open University in the UK and a research fellow in the European Research Council-funded project REDEFINE. He is the author of ‘Sino-Pakistani Relations: Politics, Military and Regional Dynamics’. Image Credit: Wikimedia.