ISLAMABAD – Leaders in the People’s Republic of China (PRC) and the IslamicRepublic of Pakistan were stunned in late November when a senior U.S.government official issued a strong verbal attack on the China-PakistanEconomic Corridor (CPEC). On November 21 in Washington, D.C., U.S.Assistant Secretary of State for the Bureau of South and Central AsiaAffairs Alice Wells spoke at length about the CPEC at a public event,criticizing multiple elements of the $62 billion flagship component ofChina’s Belt and Road Initiative (BRI). Ambassador Wells cast doubt uponclaims that CPEC will generate sustainable economic development in Pakistanand criticized the project’s cost escalations and non-transparent processesof awarding CPEC contracts to Chinese firms. She appealed to Pakistan’scitizens to ask tough questions of the PRC regarding the CPEC and China’srelated projects in Pakistan (U.S. State Departmentlink,November 21, 2019).
In the past, the U.S. government had raised concerns over CPEC and China’s“debt-trap diplomacy,” but it had never presented such a direct anddetailed set of criticisms. Ambassador Wells crossed that line—bringing thenotoriously stalled out CPEC back under international scrutiny just afterChinese and Pakistani leaders had brokered a cautiously optimistic set offunding deals to jumpstart progress a month before (Ministry of ForeignAffairs (PRC)link,October 9, 2019). Chinese representatives were quick to respond toAmbassador Wells’s criticisms. The next day, PRC Ambassador to IslamabadYao Jing(姚敬) said that he had been “shocked and surprised to see theremarks of Alice,” and that Ambassador Wells lacked accurate knowledge andhad relied on “Western media ‘propaganda’” for her accusations. He calledon the U.S. to “show your evidence, give me evidence” of specific cases ofcorruption related to the CPEC, and questioned whether Wells was takingpotshots at the CPEC to score political points. Ambassador Yao challengedthe U.S. to suit its actions to its words: “If there is any sincerity… [theU.S. should] come forward to invest in Pakistan. We [China] welcome U.S.investment in Pakistan.” (INP (Pakistan)link,November 22, 2019; VOAlink,November 22, 2019).
In addition to refocusing negative attention on the CPEC, AssistantSecretary of State Wells’ speech drew a reluctant Pakistan further into thetumultuous U.S.-China political rivalry. Pakistan faces a balance ofpayments crisis and a severely weakened currency, which has led it to growincreasingly dependent on economic ties with China. At the same time, thePakistani leadership has navigated a complex and multifaceted historicsecurity and political partnership with the U.S. If, as Ambassador Wells’statement seems to imply, Pakistan’s engagement with China is seen to comeat the expense of its bilateral relationship with the U.S. – or vice-versa– then Pakistan’s delicate power balancing diplomacy will soon become evenmore tenuous.
The Chinese Response
As mentioned, the sudden attack on the CPEC generated a rapid and strongreaction by the diplomats of the PRC. Ambassador Yao took the opportunityof responding to Ambassador Wells to also issue his own verbal attacks onU.S. foreign policy. Responding to the allegation that CPEC will be a debttrap for Pakistan, Jing said that China will never ask Pakistan to repayits loans if it is having financial difficulties. He alleged that theU.S.-controlled International Monetary Fund (IMF) would not give such arelaxation to Pakistan for its debts. He further stated that U.S.assistance had been unavailable in 2013 for Pakistan’s energy sector, butthat China had provided needed investment through CPEC (Business Recorderlink,November 23).Image: PRC Foreign Ministry Spokesman Geng Shuang at a November 25, 2019press briefing, in which he referred to the comments of Ambassador Wells asa “repetition of old slanders against China.” (Source: PRC Foreign Ministry)
PRC Foreign Ministry Spokesperson Geng Shuang also responded to AmbassadorWells four days later in his official weekly press briefing. He describedher comments as a “repetition of old slanders against China,” and claimedthat U.S. officials had “fabricated [the] ‘debt issue’ with the true aim todisrupt CPEC development and sow discord in China-Pakistan relations withmalicious calculations.” He said that if the U.S. government is reallyinterested in assisting Pakistan, then it should “honor its commitmentsinstead of always paying lip service and being the spoiler” (PRC ForeignMinistrylink,November 25).
These comments by a senior U.S. State Department official, and the harshreaction by PRC officials, have put Pakistan in a tight spot. SincePakistan is a partner of China in CPEC, it had to deny the claims made byAmbassador Wells. The Planning Commission of Pakistan—the body tasked withmanaging CPEC—responded to the assertions of Ambassador Wells by labelingthem as incorrect assessments based on flawed analysis (Planning Commissionof Pakistan link, November 24).However, Pakistan’s ministers were careful not to directly criticize theUnited States on this matter. Asad Umer, Pakistan’s Minister in charge ofCPEC, said that cooperation between Pakistan and China [in CPEC] is notdirected against the United States. In the same press conference, hewelcomed U.S. firms to invest in Pakistan, just as Chinese firms are makinginvestments (Express Tribunelink,November 23). This measured statement by Umer reflects Pakistan’s policy ofattempting, as far as is possible, to stay out of the China-U.S. rivalry.
CPEC: The Next Battleground for U.S.-China Rivalry?
CPEC has become engulfed in the U.S-China rivalry, and the comments ofAmbassador Wells were the first shots fired. The United States has beengenerally critical of the BRI project of President Xi Jinping, but untilrecently CPEC was not directly criticized. Now, the equation seems to havechanged. U.S. officials may have selected the current time to make thiscall because people in Pakistan are suffering economically: four yearssince its inception, CPEC has not proved to be the economic savior forPakistan that some had expected, and many people in Pakistan have beendisappointed. Hence, the time was opportune to highlight certain shadypractices in CPEC so that it gets further attention among the Pakistanipublic. There is a group of people in Pakistan who have been warning thegovernment against over-reliance on China, and the claims of AmbassadorWells provided further support for their arguments. [1]
Another way of analyzing the critique of Ambassador Wells is to interpretit as an attack on the debt-driven development model of BRI. Ever since theinception of BRI in 2013, the U.S. government has expressed concernsregarding the development model of BRI: it has been criticized as anon-sustainable debt-driven model, which helps China build influence in thehost countries (China Brieflink,January 5, 2019).The U.S. government fears that through this model Chinawill increase its strategic influence in Asia and Africa, and might replacethe United States as the leading power in those regions. Therefore,Washington is repeatedly calling for a sustainable economic developmentstrategy that can contribute to the development of under-developedcountries—and allow them to maintain their sovereignty at the same time.Since CPEC is the flagship project of BRI, it has become the main target ofU.S. criticism. [2]
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Pakistan still needs CPEC for its economic development. Even now, CPEC isthe largest source of foreign development funding toPakistan—notwithstanding the debate whether the funding representsbeneficial foreign direct investment, or predatory loans. Pakistan’sgovernment expects CPEC to build a large railway artery connecting Karachiin the south to Peshawar in the north. It also hopes to develop the port ofGwadar into a major commercial hub in the near future (China Brieflink,July 31, 2015; China Brieflink,February 15, 2019; China Brieflink,December 10, 2019). In addition, Pakistan is also relying on CPEC togenerate jobs for its ailing economy. Therefore, CPEC continues to be adominating factor in the economic paradigm of Pakistan—and many politicaland business leaders support it, irrespective of any criticism launchedagainst it by the United States.Image: A map of the proposed “China-Pakistan Economic Corridor” oftransportation infrastructure projects. (Source: Pakistan National HighwayAuthority)
Pakistan also needs the support of the United States. There have beenstrains in the relations of both countries in the last few years, butthings changed after Prime Minister Imran Khan paid a visit to the WhiteHouse in July 2019. The U.S. government has indicated that it would givePakistan greater help in the Afghan peace process. More recently, the U.S.approved the participation of Pakistan in the International MilitaryEducation and Training Program (Dawn link,December 20). This indicates that the U.S. has mended fences with Islamabadfor the sake of its interests in Afghanistan. At a time when Pakistan hassucceeded in rapprochement with the United States, the last thing it wantsis to alienate Washington over the CPEC.
The Implications for Pakistan
The first implication for Pakistan is that it risks drawing the ire ofBeijing on this matter. Pakistan responded to the comments on AmbassadorWells—but it was a muted response, similar to the way that Pakistanresponds to similar criticism from India. Beijing will likely feel thatPakistan is trying to appease both China and the United States, while Chinais the only one pumping money into Pakistan. Therefore, Pakistan will bepressed by China to take sides—at least on the issue of CPEC—and to clearlydenounce the U.S. government on this matter. Pakistan will find thisdifficult to do given its recent restoration of good relations withWashington. China could take steps of its own to pressure Pakistan, such asnot extending non-CPEC loans if Pakistan needs them in the near future.
These provocative comments from Ambassador Wells have also increased theinternal pressure on the government of Pakistan vis-à-vis CPEC. AmbassadorWells asked Pakistanis to ask tough questions on CPEC—a process that hadalready started. Her criticisms are being used as a proof of flaws in CPECby internal critics in Pakistan, who have increased their demands to makeCPEC agreements public and to make the decision-making processessurrounding these mega projects more transparent. Therefore, it will be achallenge for Islamabad to control the internal criticism on CPEC, becauseChina reportedly does not want CPEC agreements and the discussionssurrounding them to be made public.
If Pakistan and China want to prove Ambassador Wells wrong, they will haveto show successful results for CPEC. This will be hard to achieve, becauseso far the performance of CPEC has been less than satisfactory. Therefore,it is unlikely that CPEC can deliver any miracle in the recent future: itis not going to control inflation, fix unemployment, or resolve the foreigncurrency exchange crisis in Pakistan anytime soon. In such a case, thecriticism of CPEC becomes more credible and harder for Pakistan and Chinato defend. Therefore, both Islamabad and Beijing want CPEC to succeed—andthis will put immense pressure on those in charge of CPEC projects todeliver tangible benefits.
Ambassador Wells’s meticulous attack on the CPEC has come at a bad time forPakistan, which can’t afford to be further entangled in the widerU.S.-China rivalry. Pakistan would prefer to maintain a cautious approachin order to appease both powers. However, this is not going to work: Chinaexpects Pakistan’s unequivocal support on the CPEC, while U.S. criticism onthe CPEC will not end until all of the program’s shortcomings have beenaddressed. This leaves the Pakistani leadership in the uncomfortableposition of being caught between a rock and an increasingly hard place.
*Adnan Aamir is a journalist and researcher based in Pakistan. He haswritten extensively on the Belt and Road Initiative for *Nikkei AsianReview, Financial Times, South China Morning Post*, * Asia Times, *the LowyInstitute, and CSIS, among others. He was a Chevening South AsianJournalism Fellow 2018 at the University of Westminster, London. Follow himon twitter at* @iAdnanAamir link