Type to search

Citizen Voices Economy Featured Places Politics War & Conflict

Is CPEC About To Be Overshadowed By Chinese Investments In Iran?

  • 0

    The recent proposed economic and security partnership deal of $ 400 billion between Iran and China, which was quietly drafted, will have a monumental effect on trilateral ties between China, Pakistan, and Iran. There will be a significant boost in different Iranian sectors such as banking, telecommunications, ports, railways, etc. In exchange, China would receive a regular supply of Iranian oil over the next 25 years.

    The deal was originally proposed in January 2016 by Chinese President Xi Jinping during his trip to Iran. An unverified 18-page document with details of the proposed 25-year Iran-China agreement was leaked. Talks on the agreement are thought to be in the final stretch.

    After the news came out, there was at least some concern in Islamabad that this deal would overshadow the China Pakistan Economic Corridor (CPEC) – by becoming China’s most significant overseas investment yet.

    The deal, if it proceeds, will be a great support to the already vulnerable Iranian economy. To understand this if we look at the map, the distance between Chabahar and Gwadar is only 76 nautical miles, China would have access to the Indian Ocean. They would also acquire a large and secure source of energy, as well as a foothold in the Persian Gulf through the Straits of Hormuz: the gateway of world 1/3 oil and One of 7th world important strategic points. China will also diversify its energy supply. The majority of China’s oil imports currently pass through the Strait of Malacca, which is controlled by US allies in Southeast Asia. Afghanistan also borders with both Iran and China, so, some fear, this project can easily overshadow the China Pakistan Economic Corridor (CPEC). And it can certainly get more attention than CPEC.

    According to Michael Kugelman, Deputy Director of the Asia Program at the Wilson Center, a Washington think tank, “Despite major economic struggles, [Iran] is a wealthier country than Pakistan and won’t be as anxious as Pakistan is about unfavorable long terms and debt risks.”

    But If we look at the matter from a strategic perspective, China’s need for Pakistan as an ally is unlikely to diminish in the near future – because of India.

    China needs Pakistan to counter India and the US in the Indian Ocean. And that is why China is deeply involved in upgrading the technological capabilities of the Pakistani armed forces. Recently they have ramped up the production of the JF-17 Thunder block 3 to counter Rafale. And it is expected that China will give the J-10 stealth fighter aircraft to Pakistan if America gives the F-35 stealth fighter to India. Also, China is making 8 world-class submarines for Pakistan’s navy and 4 frigates to level up it with the Indian navy in the Indian Ocean. Recently a report came out that Pakistan and China have entered a secret three-year agreement to expand potential bio-warfare capabilities, including several research projects related to the deadly agent anthrax.

    To look at the level and extent of Chinese engagement with Pakistan suggests a long-term partnership.

    Another reason for Pakistan’s significance for China is Afghanistan. After all, Pakistan has major stakes in Afghanistan. Without Pakistan’s assistance, it is impossible to extend a corridor into Afghanistan. And because of the ongoing insurgency, it is not feasible for China to invest in Afghanistan until conditions get better – which is not going to happen in the near future. Many experts had thought that after the US-Taliban deal, the security situation in Afghanistan would get better. But this is unlikely to be the outcome: if US troops leave Afghanistan, the region will be too vulnerable, as there are many players involved apart from India who will protect their interests in Afghanistan. This is not a recipe for peace in that country.

    It may be more useful to think of the synergies that could result from China’s strategic partnerships with Iran and Pakistan respectively.

    If China invests $ 280 billion for energy resources, the importance of CPEC is only heightened, when one considers how to get these resources to China from Iran.

    The Chinese president had proposed the same deal in 2016 to Iran: which would suggest that such an outcome was a goal for Beijing from the very commencement of the Belt and Road Initiative (BRI). Today, China is closer than ever before to making an economic and strategic deal with both Pakistan and Iran.


    The author is an engineering student from Karachi

    Donate To Naya Daur

    Leave a Comment

    Your email address will not be published. Required fields are marked *

    Naya Daur