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16 May 2017

China eyes up Pakistan: Dawn newspaper leaks CPEC master plan

In a shocking instance, reputed Pakistani daily Dawn leaked the Long Term Plan for the China Pakistan Economic Corridor (CPEC), currently under discussion at China's ongoing OBOR summit. The document had not been circulated to provincial governments for assent yet.

The newspaper reported that "the Plan envisages deep penetration of Chinese culture and enterprise into Pakistan's economy and society", leading many to raise concerns.

In context

All about the leaked CPEC master plan

What is CPEC?

CPEC is regarded as key link within the One Belt One Road initiative. It includes multi-billion dollar projects aimed at improving Sino-Pak connectivity and boosting trade, and plans for energy pipelines and road-railway linkages between Gwadar and Karachi in Pakistan to Western China.

What context is this happening in?


What context is this happening in?

China is holding the Belt and Road Forum from 14-16 May, attended by 28 governments including Pakistan. The Forum is set to chalk out infrastructure projects within its One Belt One Road Initiative, which aims at setting up investment corridors linking Eurasia to China.

While India abstained from the forum citing sovereignty concerns, China and Pakistan have been negotiating to finalize the way forward.

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Leaked Reports

The Plan has two versions: the 231 page document drawn up by the China Development Bank and the National Development Reform Commission and a shorter 30 page document for provincial governments. The report earmarks 10 key areas for engagement and identifies 17 projects within them.

Geographical scheme

On resource exploitation

The Plan demarcates different zones and specific industries have been earmarked for them.

The West and North-western zone, covering areas including Khyber-Pakhtunwa and Gilgit-Baltistan, has been earmarked for mining minerals and stones.

While textile and cement industries will be set up in the Central zone, petrochemical and engineering industries will be established in Southern zone covering Gwadar and Karachi.

On Agriculture

Focus area

On Agriculture

The Plan heavily focuses on agriculture. Alongside setting up factories for manufacturing fertilizers and seeds, the Plan proposes to bring in mechanization of agriculture and newer techniques in livestock management.

Chinese enterprises further seek to venture into food processing and farm logistics, providing transport and storage facilities.

The Plan basically envisages setting up of a network of industries running through the supply chain.


Cables, submarines and more

China plans to build Pakistan a fibre-optic backbone enabling it to expand its Internet bandwidth, which would facilitate dissemination of Chinese culture through digital HD TV.

It also plans a submarine landing station in Gwadar, which would be linked by the backbone to Islamabad and other major cities. Terrestrial cables are proposed to be laid through the Khunjerab Pass, bordering Xinjiang and Gilgit-Baltistan.

Special areas- Textiles and coastal tourism

The Plan mentions improving tourism through coastal entertainment including yachts, spas and water sports. It has also shown interest in the textile sector, especially in yarn and coarse cloth, helping it profit from the cheap raw material in Pakistan along with absorbing surplus labour forces.

Alarming provisions


Alarming provisions

The LTP further includes seemingly alarming provisions including handing over thousands of acres of agricultural lands to Chinese companies for demonstration projects.

It further proposes to install surveillance technology in public spaces of cities including Peshawar and Karachi for maintenance of law and order.

The Pakistani broadcast TV is also set to co-operate with Chinese Media for "dissemination of Chinese culture".


To Chinese industries- Dos and Don'ts

The report envisages a lead role for Chinese firms in all the projects.

It advises Chinese entrepreneurs to co-operate with local businesses, maintain co-ordination and increase local employment. It further advises them to "attempt to seek powerful strategic partners for bundling interest in Pakistan".

They were also advised to respect religions and customs of the locals and live in harmony.

Risks involved


Risks involved

The Chinese Development Bank is critical of the health of Pakistan's financial system. It identifies the greatest risks as terrorists, religions, tribes and parties along with worsening security situation.

China proposes the provision of free, low interest loans to plug the gaps, while attributing equal financing responsibilities to Pakistani authorities.

It further warns against high inflation which could increase project costs and profit decline.

On China's role in Pakistan's future

Aptly summarizing the desirability of CPEC for Pakistan, the Dawn Report concludes, "In fact, CPEC is only the opening of the door. What comes through once that door has been opened is difficult to forecast".

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