The strategic alliance between Pakistan and China, driven largely by
opportunism and geostrategic interests, seems unshakable. However, the
extent of its mutual benefit remains under scrutiny, especially for
Islamabad, whose reliance on Beijing continues to deepen. Although China
claims to base its foreign policy interactions on five key principles —
respect for sovereignty, non-aggression, non-interference, equality and
mutual benefit, and peaceful coexistence — its dealings with Pakistan
indicate an unequal power dynamic that primarily serves its own interests.
This imbalance in the Pakistan-China strategic alliance has led to a
situation in which Islamabad's autonomy is increasingly curtailed, and its
vulnerability to Beijing’s influence is becoming more apparent.
China’s economic penetration and Pakistan’s eroding autonomy
Recent engagements between the two countries underscore the paradox of
their partnership, where the pursuit of mutual gains has instead evolved
into a zero-sum game. Under the umbrella of partnership, China has deeply
penetrated Pakistan’s economic, infrastructure, energy, and security
sectors, leaving Pakistan with limited space to make independent choices.
The cornerstone of the bilateral relationship is the $65 billion China-
Pakistan Economic Corridor (CPEC), a major part of China’s $1 trillion
investment in the Belt and Road Initiative (BRI), which has attracted
participation from more than 140 countries across Asia, Africa, Latin
America, and beyond since its launch in 2013. While CPEC has solidified
Pakistan’s position as a key strategic partner for China, it has come at the
cost of the former’s strategic autonomy, placing it in a more dependent role.
Although Islamabad aims to follow Beijing’s development path, the practical
difficulties of maintaining this trajectory have proven overwhelming. As
China continues pouring investments into Pakistan, the country finds itself
sinking deeper into a debt trap, struggling to repay existing loans while
seeking new ones.
Pakistan recently secured a 37-month, $7 billion International Monetary
Fund (IMF) bailout package to avoid bankruptcy, as it faces $90 billion in
debt repayments over the next three years, a significant portion of which
are owed to China. Pakistan managed to obtain the IMF loan only through
debt rollovers from friendly nations, including China, from which it
has requested a five-year repayment extension on several loans. This
raises concerns about Pakistan’s credibility as a reliable business partner,
as repayment in the near future seems unlikely. Despite these financial
risks, China continues to invest, signaling that, contrary to its official claims
of fostering regional development through economic integration, its focus
may be more on expanding its geostrategic influence.
, The financial risks of CPEC investments
During the first phase of CPEC, the two countries completed 38 projects
worth $25.2 billion, with much of the funding coming from high-interest
(3.7%) loans from China. Currently, Pakistan’s debt to China stands at
$26.6 billion, including $16 billion in the energy sector — more than it owes
to any other country. According to the World Bank’s latest International
Debt Report 2023, more than 72% of Pakistan’s external bilateral debt is
owed to China. Despite this, 26 CPEC projects valued at $26.8 billion are in
the pipeline, and Pakistan plans to propose 41 more projects to the
Chinese prime minister under CPEC Phase II. These proposals span areas
such as infrastructure development, road connectivity, information
technology (IT), agriculture, industrial cooperation, education, healthcare,
water resources, energy, and artificial intelligence (AI), suggesting further
borrowing in the second phase. However, both the Pakistani and Chinese
governments have dismissed criticism that CPEC is creating a debt trap,
calling it misguided Western propaganda. Still, Pakistan’s fragile economy,
mounting foreign debt, and slow progress on sustainable development
challenge the narrative of CPEC as a "win-win" initiative
Security challenges and China’s expanding role
China views the challenges and delays in realizing CPEC as largely due to
political instability and rising insecurity in Pakistan, which have cost both
Chinese lives and investments. Since 2016, attacks on CPEC projects
have resulted in the death or injury of more than 60 Chinese workers.
These attacks have disrupted project timelines, inflated costs,
and incurred compensation payments exceeding $14 million.
Historically, China has relied on host governments to protect its interests,
but as its global economic footprint expands, Beijing is increasingly willing
to take on a more proactive role as a security provider, not just a
development actor, to safeguard its overseas interests. This shift has led to
the integration of the BRI into China's Global Security Initiative, positioning
China as a global security leader where security cooperation and defense
ties are prioritized over economic development.
China has emphasized to Pakistan that a stable and secure environment is
a prerequisite for the successful implementation of CPEC. As a result,
Beijing has pressed Islamabad to enforce the Global Security Initiative,
which focuses on defeating efforts to disrupt their cooperation by
safeguarding Chinese workers and investments. This includes
strengthening counter-terrorism cooperation, improving cross-border
management, and combating arms and drug smuggling. Last month, in a
high-level meeting, both countries agreed to conduct joint police and
opportunism and geostrategic interests, seems unshakable. However, the
extent of its mutual benefit remains under scrutiny, especially for
Islamabad, whose reliance on Beijing continues to deepen. Although China
claims to base its foreign policy interactions on five key principles —
respect for sovereignty, non-aggression, non-interference, equality and
mutual benefit, and peaceful coexistence — its dealings with Pakistan
indicate an unequal power dynamic that primarily serves its own interests.
This imbalance in the Pakistan-China strategic alliance has led to a
situation in which Islamabad's autonomy is increasingly curtailed, and its
vulnerability to Beijing’s influence is becoming more apparent.
China’s economic penetration and Pakistan’s eroding autonomy
Recent engagements between the two countries underscore the paradox of
their partnership, where the pursuit of mutual gains has instead evolved
into a zero-sum game. Under the umbrella of partnership, China has deeply
penetrated Pakistan’s economic, infrastructure, energy, and security
sectors, leaving Pakistan with limited space to make independent choices.
The cornerstone of the bilateral relationship is the $65 billion China-
Pakistan Economic Corridor (CPEC), a major part of China’s $1 trillion
investment in the Belt and Road Initiative (BRI), which has attracted
participation from more than 140 countries across Asia, Africa, Latin
America, and beyond since its launch in 2013. While CPEC has solidified
Pakistan’s position as a key strategic partner for China, it has come at the
cost of the former’s strategic autonomy, placing it in a more dependent role.
Although Islamabad aims to follow Beijing’s development path, the practical
difficulties of maintaining this trajectory have proven overwhelming. As
China continues pouring investments into Pakistan, the country finds itself
sinking deeper into a debt trap, struggling to repay existing loans while
seeking new ones.
Pakistan recently secured a 37-month, $7 billion International Monetary
Fund (IMF) bailout package to avoid bankruptcy, as it faces $90 billion in
debt repayments over the next three years, a significant portion of which
are owed to China. Pakistan managed to obtain the IMF loan only through
debt rollovers from friendly nations, including China, from which it
has requested a five-year repayment extension on several loans. This
raises concerns about Pakistan’s credibility as a reliable business partner,
as repayment in the near future seems unlikely. Despite these financial
risks, China continues to invest, signaling that, contrary to its official claims
of fostering regional development through economic integration, its focus
may be more on expanding its geostrategic influence.
, The financial risks of CPEC investments
During the first phase of CPEC, the two countries completed 38 projects
worth $25.2 billion, with much of the funding coming from high-interest
(3.7%) loans from China. Currently, Pakistan’s debt to China stands at
$26.6 billion, including $16 billion in the energy sector — more than it owes
to any other country. According to the World Bank’s latest International
Debt Report 2023, more than 72% of Pakistan’s external bilateral debt is
owed to China. Despite this, 26 CPEC projects valued at $26.8 billion are in
the pipeline, and Pakistan plans to propose 41 more projects to the
Chinese prime minister under CPEC Phase II. These proposals span areas
such as infrastructure development, road connectivity, information
technology (IT), agriculture, industrial cooperation, education, healthcare,
water resources, energy, and artificial intelligence (AI), suggesting further
borrowing in the second phase. However, both the Pakistani and Chinese
governments have dismissed criticism that CPEC is creating a debt trap,
calling it misguided Western propaganda. Still, Pakistan’s fragile economy,
mounting foreign debt, and slow progress on sustainable development
challenge the narrative of CPEC as a "win-win" initiative
Security challenges and China’s expanding role
China views the challenges and delays in realizing CPEC as largely due to
political instability and rising insecurity in Pakistan, which have cost both
Chinese lives and investments. Since 2016, attacks on CPEC projects
have resulted in the death or injury of more than 60 Chinese workers.
These attacks have disrupted project timelines, inflated costs,
and incurred compensation payments exceeding $14 million.
Historically, China has relied on host governments to protect its interests,
but as its global economic footprint expands, Beijing is increasingly willing
to take on a more proactive role as a security provider, not just a
development actor, to safeguard its overseas interests. This shift has led to
the integration of the BRI into China's Global Security Initiative, positioning
China as a global security leader where security cooperation and defense
ties are prioritized over economic development.
China has emphasized to Pakistan that a stable and secure environment is
a prerequisite for the successful implementation of CPEC. As a result,
Beijing has pressed Islamabad to enforce the Global Security Initiative,
which focuses on defeating efforts to disrupt their cooperation by
safeguarding Chinese workers and investments. This includes
strengthening counter-terrorism cooperation, improving cross-border
management, and combating arms and drug smuggling. Last month, in a
high-level meeting, both countries agreed to conduct joint police and
