 "Shehbaz Sharif in China: Why Pakistan's hopes for 'CPEC 2.0' may be dashed")
Pakistani Prime Minister Shehbaz Sharif will be on a five-day visit to China starting June 4, during which time he will reportedly join the formal launch of the second phase of the China-Pakistan Economic Corridor (CPEC-II).
While CPEC's first phase involved infrastructure and energy projects, CPEC-II will see both countries focus on agriculture, upgrading a crucial Pakistan Railways corridor called Main Line-I (ML-1), and the realignment of the Karakorum Highway, which connects the city of Hasan Abdal near Islamabad to Kashgar in China's autonomous Xinjiang region, Pakistani publication Dawn reported last month.
Formally launched in 2015, the $62-billion CPEC project included the construction of the Gwadar seaport, power plants and road networks across Pakistan. CPEC is a component of China's Belt and Road Initiative (BRI), with the 3,000-kilometre Chinese infrastructure network aiming to connect Pakistan's ports in Gwadar and Karachi to China's Xinjiang Uygur Autonomous Region by land.
However, hopes in some quarters in Pakistan that China is gearing up for another round of major investments in Pakistan, especially through a revival of CPEC, could prove to be wishful thinking, writes Khurram Husain in his May 30 piece for Dawn.
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CPEC expansion may be a 'mirage'
The piece, titled 'The great CPEC mirage', argues that the recent noise surrounding a revival of CPEC could be "wishful thinking".
Husain bases his argument that a major revival of CPEC is unlikely on the following observation: Such a move has not been mentioned by the Chinese side.
Husain explains that during his years as a Pakistan-China observer, he has come to find that pronouncements made by official Pakistani quarters should be taken with a pinch of salt, unless the same thing is also said by official or semi-official Chinese quarters.
Husain's reading of the matter is backed by official statements made during a press conference held by Chinese Foreign Ministry spokesperson Mao Ning on May 31.
When asked for the details of Prime Minister Shehbaz Sharif's visit to China and Beijing's expectations for the visit, the spokesperson said that the leaders of the two countries would have an "in-depth exchange of views on China-Pakistan relations and issues of mutual interest, and jointly draw up a blueprint for the growth of bilateral relations".
Stating that China and Pakistan were "all-weather strategic cooperative partners and ironclad friends", the spokesperson added: "Under the guidance of the leaders of the two countries, China and Pakistan have in recent years had close high-level exchanges, steadily advanced practical cooperation, conducted fruitful and high-quality cooperation on the CPEC, and maintained sound communication and coordination in international and regional affairs."
On further cooperation between the two countries, the spokesperson said that China "stands ready to work with Pakistan through this visit to make greater progress in our all-weather strategic cooperative partnership and take new steps in the building of an even closer China-Pakistan community with a shared future in the new era".
However, there was no specific mention of a major revival or expansion of CPEC. There was no specific mention of CPEC-II either.
In fact, China does employ a number of sources to issue official statements or indicate its intentions. At the highest level, there are Chinese foreign ministry spokespersons and government functionaries. The next level involves China's state-controlled media, where editorials are often used to float ideas or indicate official thinking, which may have not yet become official policy. Finally, there are news reports about developments in Pakistan or statements by Pakistani officials, but they also cite Chinese officials on the same topic.
According to Husain, information or statements from these quarters are meaningful. However, he points out that there has been silence so far on the topic of CPEC in these Chinese quarters.
Husain cites the example of a May 29 report published by China's official news agency, Xinhua. Quoting Prime Minister Shehbaz Sharif talking about CPEC, the report says: "Pakistan desired to further enhance its cooperation with China in various sectors including agriculture, information technology (IT), and energy under the second phase of the China-Pakistan Economic Corridor..., the prime minister said while chairing a meeting on Pakistan-China cooperation."
However, as Husain points out, the report does not carry any reciprocal quote from the Chinese side on CPEC.
It's not a 'China-Pakistan' corridor
Husain also draws attention to the report's concluding sentence: "... the CPEC is a corridor linking the Gwadar Port in southwest Pakistan’s Balochistan province with Kashgar in Northwest China’s Xinjiang Uighur Autonomous Region, which highlights energy, transport, and industrial cooperation in the first phase, while the new phase expands to fields of agriculture and livelihood, among others."
According to Husain, the formulation that the CPEC corridor links Gwadar with Xinjiang is consistent with how China has talked about CPEC since the beginning.
Husain highlights that even in China's Long-Term Plan of CPEC from a decade ago, the Chinese side did not describe it as a China-Pakistan economic corridor. Instead, that document only mentioned a Xinjiang-Pakistan economic corridor.
In fact, those plans only mentioned the economic benefits that China's Xinjiang Autonomous Region would gain from greater integration with Pakistan.
According to Husain, the report not making any mention of IT and energy, two priorities mentioned in Sharif's statement, indicates diminished interest in China for further involvement in Pakistan’s economy.
The piece in Dawn also points out that while the joint statement issued following the China-Pakistan Strategic Dialogue in mid-May did make some mention of CPEC, including an agreement to "accelerate progress on major connectivity projects" like the Gwadar Port and upgrading ML-1 and to "strengthen cooperation" in agriculture, industrial parks, mining, and IT, there was a caveat -- all of this would be done "according to local conditions".
There is very little chance that Pakistan will take on a $6-billion-$7-billion loan for the ML-1 project, which has been in the news for many years now, claims Husain.
On the Gwadar Port, the Dawn piece says that China's stand is that it is Pakistan's responsibility to connect Gwadar to the rest of the country.
Ultimately, Husain argues that the "local conditions" caveat reduces the chances of movement towards greater cooperation in the fields listed in the joint statement.
However, as Husain points out, there is one field the joint statement stresses: ensuring the security of Chinese nationals and investments in Pakistan.
Why is Shehbaz Sharif really visiting China?
According to Husain, the real aim of Shehbaz Sharif's visit to China is to ensure that some of the maturities in the Chinese debt instruments that will be maturing in the next three years are rescheduled, which the Pakistani government is trying to dress up as a relaunch of CPEC "for public consumption".
The reason for such a move is that the International Monetary Fund (IMF), which does not want its resources to be used to service Chinese debt obligations, has told the Pakistani government that an agreement will only be possible if there is no positive net outflow from Pakistan to China during the programme period.