However, almost a decade later, the initial optimism associated with the project appears to be fading, with China expressing dissatisfaction with Pakistan's current situation, particularly the deteriorating security situation.
In recent months we have witnessed repeated targeted attacks against Chinese citizens and interests on Pakistani soil, leading Beijing to gradually re-evaluate its relationship with Islamabad, despite both nations characterizing themselves as "ironclad friends" and "partners." strategic cooperatives in all weathers". Consequently, China is said to have downgraded its stance toward Pakistan from "top priority" to "priority," reflecting Beijing's frustration with both Pakistan's military leadership and the civilian government.
Interestingly, President Xi Jinping has not categorically ruled out the possibility of enhancing and promoting Beijing's economic cooperation with Islamabad. However, he emphasized that China's commitment to Pakistan depends on the Shehbaz Sharif government's ability to implement tangible measures to establish a "secure, stable and predictable" security environment in the country. Although both nations have agreed in principle to begin the second phase of the CPEC, Beijing has refrained from making substantial new commitments to Islamabad, despite having expressed intentions to align the project with Pakistan's development priorities. A joint statement issued on June 8 said that apart from making minor adjustments to ongoing projects such as the Karakoram Expressway project, the Chinese government did not announce any new initiatives under the CPEC.
As for the $6 billion Main Line-1 (ML-1) rail project, while the Pakistani government anticipated signing a framework agreement for its implementation, China only agreed to proceed with it gradually. This cautious stance is notable, particularly in light of concerns raised by Sinosure, the Chinese state-owned insurance firm that oversees CPEC insurance, regarding Pakistan's financial instability exacerbated by rising circular debt.
The joint statement underlines that Beijing is committed to "encourage Chinese companies to invest in Pakistan's special economic zones based on trade and market principles." However, this commitment depends on Islamabad's efforts to improve its business environment and policy framework to better facilitate Chinese investment. This approach suggests China's emphasis on business-oriented investments in Pakistan, prioritizing sectors with business return potential in the second phase of the CPEC. Specifically, Beijing has strategically prioritized sectors such as IT, agriculture, science and technology, and industry. , which also invite investments from third parties. The only sector in which Beijing has made an exclusive commitment is natural resource mining, with the aim of safeguarding its commercial interests and maintaining a monopoly for guaranteed economic benefits.
Tensions in China-Pakistan relations have been simmering due to Pakistan's struggle to curb the rising tide of extremism and terrorism in the country, particularly the rising incidents of attacks on several Chinese-operated CPEC projects in recent years. For example, in March 2024 alone, Pakistan witnessed a series of attacks on CPEC projects in Balochistan and Khyber-Pakhtunkhwa provinces, resulting in the death of five Chinese nationals.
On March 20, Baloch rebels launched an assault on the heavily fortified Gwadar Port Authority complex, which houses several key offices, causing significant structural damage. In particular, the Gwadar port represents the flagship project of the CPEC, and an attack on this highly secure complex sends a clear message that no Chinese project, no matter how fortified, is immune to risk in the country. Subsequently, on the 25th In March, Baloch rebels carried out another attack, this time against the Pakistan Naval Station (PNS) in Turbat. The rebel group claimed that the attack epitomized protest against the growing Chinese presence in the province and Pakistan-China's joint exploitation of Balochistan's resources.
For Beijing, the inability of Pakistani security forces to protect such prominent and sensitive locations, despite its strict security measures, raises significant doubts about Islamabad's ability to safeguard China's interests effectively.
China's patience was exhausted by Pakistan's failure to prevent attacks on its interests, highlighted by a suicide attack carried out by the terrorist group Tehreek-e-Taliban Pakistan (TTP) on March 26. The attack targeted a convoy of Chinese engineers on the Karakoram Highway in Bisham, resulting in the death of five engineers and their local driver. These engineers were working on a Chinese-funded Dasu hydropower project in Bisham, located in Shangla district of Khyber-Pakhtunkhwa province. This escalation of incidents led Beijing to publicly criticize the Pakistani government for failing to ensure the safety of citizens and Chinese projects. The Chinese Embassy in Pakistan urged the Pakistani government to "thoroughly investigate the attack and severely punish the perpetrators."
Similarly, a Chinese Foreign Ministry statement on March 27 called on Islamabad to quickly investigate the incident and "capture the perpetrators and bring them to justice." This pressure forced the Pakistani government to quickly dismiss several officials, marking a significant milestone, due to their negligence in securing the convoy of Chinese engineers.
It should be noted that Beijing made Shehbaz Sharif's visit to China conditional on Pakistan committing to launch a large-scale counter-terrorism operation similar to Zarb-e-Azb in 2014 and Raddul Fasaad in 2017. According to a local media report, the Chinese government The officials explicitly urged Islamabad to take decisive military action to "eliminate" all terrorist groups once and for all, citing concerns over growing threats to Chinese nationals involved in CPEC-related and other ventures in Pakistan. Chinese government have consistently advocated a comprehensive military operation against extremist groups. During his visit to Islamabad on June 21, Liu Jianchao, Minister of the International Liaison Department of the Communist Party of China (CPC), emphasized that "Pakistan's internal security deficiencies pose a major challenge that undermines investor confidence." , stating that "security threats are the main risks to CPEC cooperation."
Under pressure and influenced by Chinese demands for greater economic cooperation, the Pakistani government announced a large-scale military operation, dubbed Operation Azm-i-Istehkam, on June 22, just one day after Liu Jianchao's public statements. A statement from Pakistan's Prime Minister's Office described this as a "reinvigorated and intensified national counter-terrorism campaign", aimed at "coordinating and integrating multiple efforts to decisively combat extremism and terrorism in a comprehensive manner".
The changing dynamics of the China-Pakistan relationship highlight growing Chinese distrust towards Pakistan, stemming from persistent instability and deteriorating security scenario in Pakistan. While Beijing may have forced Islamabad to declare a substantial military campaign against terrorism, the prospects of improving the security scenario in Pakistan appear uncertain, given the results of previous similar operations carried out by the Pakistani military. Without creating a favorable security environment and addressing Beijing's apprehensions, substantial progress on the CPEC is likely to remain unattainable.
In recent months we have witnessed repeated targeted attacks against Chinese citizens and interests on Pakistani soil, leading Beijing to gradually re-evaluate its relationship with Islamabad, despite both nations characterizing themselves as "ironclad friends" and "partners." strategic cooperatives in all weathers". Consequently, China is said to have downgraded its stance toward Pakistan from "top priority" to "priority," reflecting Beijing's frustration with both Pakistan's military leadership and the civilian government.
Interestingly, President Xi Jinping has not categorically ruled out the possibility of enhancing and promoting Beijing's economic cooperation with Islamabad. However, he emphasized that China's commitment to Pakistan depends on the Shehbaz Sharif government's ability to implement tangible measures to establish a "secure, stable and predictable" security environment in the country. Although both nations have agreed in principle to begin the second phase of the CPEC, Beijing has refrained from making substantial new commitments to Islamabad, despite having expressed intentions to align the project with Pakistan's development priorities. A joint statement issued on June 8 said that apart from making minor adjustments to ongoing projects such as the Karakoram Expressway project, the Chinese government did not announce any new initiatives under the CPEC.
As for the $6 billion Main Line-1 (ML-1) rail project, while the Pakistani government anticipated signing a framework agreement for its implementation, China only agreed to proceed with it gradually. This cautious stance is notable, particularly in light of concerns raised by Sinosure, the Chinese state-owned insurance firm that oversees CPEC insurance, regarding Pakistan's financial instability exacerbated by rising circular debt.
The joint statement underlines that Beijing is committed to "encourage Chinese companies to invest in Pakistan's special economic zones based on trade and market principles." However, this commitment depends on Islamabad's efforts to improve its business environment and policy framework to better facilitate Chinese investment. This approach suggests China's emphasis on business-oriented investments in Pakistan, prioritizing sectors with business return potential in the second phase of the CPEC. Specifically, Beijing has strategically prioritized sectors such as IT, agriculture, science and technology, and industry. , which also invite investments from third parties. The only sector in which Beijing has made an exclusive commitment is natural resource mining, with the aim of safeguarding its commercial interests and maintaining a monopoly for guaranteed economic benefits.
Tensions in China-Pakistan relations have been simmering due to Pakistan's struggle to curb the rising tide of extremism and terrorism in the country, particularly the rising incidents of attacks on several Chinese-operated CPEC projects in recent years. For example, in March 2024 alone, Pakistan witnessed a series of attacks on CPEC projects in Balochistan and Khyber-Pakhtunkhwa provinces, resulting in the death of five Chinese nationals.
On March 20, Baloch rebels launched an assault on the heavily fortified Gwadar Port Authority complex, which houses several key offices, causing significant structural damage. In particular, the Gwadar port represents the flagship project of the CPEC, and an attack on this highly secure complex sends a clear message that no Chinese project, no matter how fortified, is immune to risk in the country. Subsequently, on the 25th In March, Baloch rebels carried out another attack, this time against the Pakistan Naval Station (PNS) in Turbat. The rebel group claimed that the attack epitomized protest against the growing Chinese presence in the province and Pakistan-China's joint exploitation of Balochistan's resources.
For Beijing, the inability of Pakistani security forces to protect such prominent and sensitive locations, despite its strict security measures, raises significant doubts about Islamabad's ability to safeguard China's interests effectively.
China's patience was exhausted by Pakistan's failure to prevent attacks on its interests, highlighted by a suicide attack carried out by the terrorist group Tehreek-e-Taliban Pakistan (TTP) on March 26. The attack targeted a convoy of Chinese engineers on the Karakoram Highway in Bisham, resulting in the death of five engineers and their local driver. These engineers were working on a Chinese-funded Dasu hydropower project in Bisham, located in Shangla district of Khyber-Pakhtunkhwa province. This escalation of incidents led Beijing to publicly criticize the Pakistani government for failing to ensure the safety of citizens and Chinese projects. The Chinese Embassy in Pakistan urged the Pakistani government to "thoroughly investigate the attack and severely punish the perpetrators."
Similarly, a Chinese Foreign Ministry statement on March 27 called on Islamabad to quickly investigate the incident and "capture the perpetrators and bring them to justice." This pressure forced the Pakistani government to quickly dismiss several officials, marking a significant milestone, due to their negligence in securing the convoy of Chinese engineers.
It should be noted that Beijing made Shehbaz Sharif's visit to China conditional on Pakistan committing to launch a large-scale counter-terrorism operation similar to Zarb-e-Azb in 2014 and Raddul Fasaad in 2017. According to a local media report, the Chinese government The officials explicitly urged Islamabad to take decisive military action to "eliminate" all terrorist groups once and for all, citing concerns over growing threats to Chinese nationals involved in CPEC-related and other ventures in Pakistan. Chinese government have consistently advocated a comprehensive military operation against extremist groups. During his visit to Islamabad on June 21, Liu Jianchao, Minister of the International Liaison Department of the Communist Party of China (CPC), emphasized that "Pakistan's internal security deficiencies pose a major challenge that undermines investor confidence." , stating that "security threats are the main risks to CPEC cooperation."
Under pressure and influenced by Chinese demands for greater economic cooperation, the Pakistani government announced a large-scale military operation, dubbed Operation Azm-i-Istehkam, on June 22, just one day after Liu Jianchao's public statements. A statement from Pakistan's Prime Minister's Office described this as a "reinvigorated and intensified national counter-terrorism campaign", aimed at "coordinating and integrating multiple efforts to decisively combat extremism and terrorism in a comprehensive manner".
The changing dynamics of the China-Pakistan relationship highlight growing Chinese distrust towards Pakistan, stemming from persistent instability and deteriorating security scenario in Pakistan. While Beijing may have forced Islamabad to declare a substantial military campaign against terrorism, the prospects of improving the security scenario in Pakistan appear uncertain, given the results of previous similar operations carried out by the Pakistani military. Without creating a favorable security environment and addressing Beijing's apprehensions, substantial progress on the CPEC is likely to remain unattainable.
