Date first published: 03/05/2022
Key sectors: infrastructure
Key risks: terrorism; border conflicts
Risk development
Since 2013, China has been investing heavily in Pakistan. The China–Pakistan Economic Corridor (CPEC) has included the construction of the Gwadar Port in Balochistan, a network of highways and railways, and over US$30bln in energy infrastructure. CPEC could help accelerate Pakistan’s economic development – linking the country to China’s west. Yet, discontent has led to a series of attacks against Chinese personnel and assets across the country.
Why it matters
Chinese projects risk attack from myriad groups within Pakistan. These include ethno-nationalist separatists, primarily from Balochistan, and jihadi groups like Tahrir-i-Taliban Pakistan (TTP). Beijing has signalled its displeasure at Islamabad’s failure to provide sufficient security for the projects. Furthermore, while some groups – like the Balochistan Liberation Army (BLA) – are striving from independence from the Pakistani state, other threat groups have links with Pakistan’s Inter-Services Intelligence (ISI).
Background
There have been numerous attacks on Chinese individuals and assets in Pakistan in recent years. On 26 April 2022, three Chinese nationals were amongst four killed in a suicide attack outside the University
of Karachi’s Confucius Institute. The Baloch Liberation Army claimed responsibility for the incident. In July 2021 nine Chinese nationals and three Pakistanis were killed in an attack on those working on an under-construction tunnel site of the $4.2 billion CPEC Dasu hydropower project in Khyber Pakhtunkhwa. It is unclear who was behind the attack, although then Pakistani Foreign Minister Shah Mahmood Qureshi indicated that it was planned in Afghanistan, and there are suspicions that TTP affiliates were involved.
There are two broad motives for targeting Chinese assets. The first relates to grievances with CPEC itself. These issues are most clear in Balochistan, where the acquisition of the land for the Gwadar port, the exclusion of Baloch firms, and the dominance of Chinese workers increase hostilities. Baloch groups feel that Chinese investment is exploitative, with Beijing expropriating the province’s resources and giving little back. For instance, Baloch groups oppose the prioritisation of rail lines that prioritise areas of Punjab and Sind, excluding many of Balochistan’s districts
Baloch groups have also had little input in CPEC projects in the region with planning centralised by Pakistan. These issues are adding to existing separatist feelings, turning much of the tribal Baloch elite against CPEC. As attacks by Baloch groups increase, Beijing becomes more reluctant to hire local workers – as they see them as a potential security vulnerability – adding to the feeling of exclusion.
Secondly, opposition to CPEC is rooted in its strategic importance. When complete, CPEC could accelerate Pakistan’s development and provide direct benefits to Pakistan’s military and economic elite, making attacking CPEC, and Chinese assets more generally, an attack on Islamabad by proxy.
Risk outlook
In recent days, Beijing has pressured Pakistan to focus on providing better security to Chinese citizens. However, Islamabad may have reached the limits of its capacity to protect Chinese nationals. It raised a 15,000-person paramilitary force in 2016 to protect CPEC projects, yet attacks have continued. Pakistan is also financially stressed, and vested military and elite interests may prevent it from offering significant concessions to assuage ethno-nationalists across the country. Yet, Beijing is unlikely to back away from CPEC entirely – with the attacks unlikely to derail strategically important projects. However, non-priority projects are likely to be delayed. Chinese workers, who form the bulk of those involved in construction, are less willing to work on CPEC projects. Chinese commercial projects are likely to be scrapped altogether.
