Significant economic and security issues that jeopardize the project’s viability have been brought to light by the growing tensions between China and Pakistan over the China-Pakistan Economic Corridor (CPEC).
China has recently declined to provide funding for new CPEC projects because of Pakistan’s noncompliance with financial commitments and the stagnation of ongoing projects. Given the numerous terrorist attacks in recent years, this rejection raises questions about the safety of Chinese nationals involved in these projects.
Local residents in places like Gwadar, where CPEC-induced expectations of economic transformation have not come to pass, are growing increasingly frustrated. Relationship tensions have been exacerbated by protests over access to resources and basic amenities, giving the impression that local communities are not benefiting from CPEC.
China’s investments in Pakistan have been declining, especially in manufactured goods that are essential to the development of infrastructure. It has been challenging for Pakistan to draw in more investment due to the country’s general economic circumstances, which have been made worse by the pandemic and international events like the conflict in Ukraine.
With frequent attacks on Chinese laborers connected to CPEC projects, the security situation in Pakistan, particularly in Balochistan, has drastically worsened. Significantly, events like the October 2024 suicide bombing that claimed the lives of two Chinese employees have sparked concerns regarding the security of Chinese staff.
China has voiced discontent with Pakistan’s capacity to offer sufficient security for its investments in the face of these threats. China’s top officials have traveled to Pakistan to talk about heightened security, and there are signs
China’s investments in Pakistan have been declining, especially as a result of the continuous security lapses that have caused a significant strain in the two nations’ diplomatic ties. A change from covert discontent to more overt public calls for enhanced security measures is evident in the Chinese Ambassador’s public criticism of Pakistan’s inability to protect its citizens.
With growing economic and security challenges, the future of CPEC is uncertain. China might reconsider its commitment to this flagship project of its Belt and Road Initiative if these areas don’t see major improvements, which could have disastrous effects on Pakistan’s economy and reputation as a destination for foreign investment.
