Since being officially launched in April 2015, the China-Pakistan Economic Corridor (CPEC) has been one of the most watched set of projects under the aegis of Chinese President Xi Jinping’s signature Belt and Road Initiative (BRI). Having already injected around $25 billion into Pakistan, the CPEC not only has been dubbed the “flagship project” of the BRI, but it also holds a central role in Beijing’s global ambitions. While much has been said about the geopolitical implications of the CPEC, including for both India and the United States, less attention has been devoted to providing in-depth insights into 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. The power asymmetry between the two partners—coupled with the impression that the BRI represents a unidirectional Chinese endeavor, 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. On the contrary, this study 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 and change in leadership following the country’s 2018 elections.
In filling this gap, this paper foregrounds the importance of adopting a relational approach to studying how the BRI unfolds on the ground. This entails looking at how Pakistan and China have negotiated the CPEC’s energy, infrastructure, and industrial cooperation projects. The analysis is based on semi-structured elite interviews conducted by the two authors during three rounds of fieldwork in 2015, 2018, and 2020–2021 triangulated with a host of official reports, statements, and newspaper articles. Examining the domestic contours of the CPEC shows that Pakistani actors have wielded agency in important ways throughout the process, while Chinese actors at times have accommodated key Pakistani demands. The CPEC’s chosen route was affected by partisan Pakistani politics. The decisionmaking behind the corridor’s geographic route was an early indication that Pakistan’s preferences have been key in shaping how the CPEC has unfolded on the ground. In particular, the choice to prioritize projects in Sindh and Punjab stemmed from then prime minister Nawaz Sharif and his party’s desire to obtain medium-term electoral gains, alongside China’s interests in developing projects in Pakistan’s more economically developed provinces.
Despite its initial suspicions of the CPEC, the Pakistan Tehreek-e-Insaf (PTI) has been as partisan in its use of the CPEC as its predecessor was. Since taking office in 2018, the PTI’s focus on socioeconomic projects has not deviated markedly from the Pakistani government’s previously formulated plans for the CPEC. But its choice of the Rashakai special economic zone (SEZ) in Khyber Pakhtunkhwa, over others rated more favorably in feasibility studies (and despite a strong Chinese preference for an alternative location), undermines the narrative that China is always the one distorting market forces with ill-suited BRI projects. The development of Gwadar was as much of a priority for Pakistan as it was for China. Although China’s strategic calculations are often emphasized, the port of Gwadar was a Pakistani-initiated proposal in the early 2000s that was only later rebranded as a BRI project after 2013. All Pakistani governments over the past twenty years, both military- and civilian-led, have encouraged China’s involvement in Gwadar, while Beijing in turn sees the port as a strategic access point to the Indian Ocean.
Energy projects were initially prioritized by Pakistan’s choice. The majority of first-phase CPEC investments went to energy projects, most notably coal power plants. This preference for coal was part of Pakistan’s desire to diversify the composition of its energy markets. This goal was also in line with Sharif’s and his party’s preference for energy projects to end the country’s electricity shortages in order to secure a 2018 reelection bid. The challenges facing SEZs. Despite China’s and Islamabad’s agreement to focus on and prioritize a few SEZs and China’s desire to relocate some industries to lower-cost production areas, the development of SEZs has been slow. This has been the result of a cumbersome bureaucratic structure and the politicization of these projects. Rhetoric on the CPEC has often failed to match reality. The lofty language on the CPEC has generally failed to measure up to the realities on the ground when it comes to delivering for the people of Pakistan. Many projects aimed at winning Pakistani hearts and minds have been included in the CPEC, but these have often not materialized or have been delayed.