It will be a modern copy of the ancient Silk Road trade
Chinese President Xi Jinping announced the largest Belt and Road Initiative (BRI) transportation project of the railway line between Kashgar in East Turkestan (Xinjiang) at the Pakistani port of Gwadar in the Arabian Sea.
China took the initiative knowing the strategic importance and the huge impact it would have on East-West trade and communication. The project could cost China 400 billion yuan, equivalent to 888 tonnes of gold at current prices, or $58 billion.
Although the idea of a railway line between Kashgar And Gwadar had existed for a long time with Chinese decision makers when the Karakoram highway was planned, it was downgraded for a time, first due to COVID-19 and then due to various safety issues.
The pandemic has almost been overcome worldwide, although in China some regions are still affected. However, the Chinese authorities have found favorable conditions to reconsider the big project.
The proposal for this rail connectivity was evaluated by scientists from the state-owned China Railway First Survey and Design Institute Group Co. Ltd. headed by the institute’s deputy director of capital operations, Zhang Ling.
Why is China making this huge investment?
What drives China to invest in such a huge project? The research shows that the project has “the potential to reshape trade and geopolitics on the Eurasian continent and should be supported.”
Undoubtedly, this is a remarkable project involving huge expense, skilled and unskilled labor and the risk of loss of life that usually occurs when a project of this magnitude is undertaken on the difficult Himalayan terrain.
It is not difficult to understand China’s vision for this 3,000 km (1,860 mi) rail link. By reviving the Silk Road connection of medieval times in its modern form, China will link its western region to the Arabian Sea.
This means China will bypass the Strait of Malacca, reducing its dependence on the South China Sea. Even in a scenario of blocking the Strait of Malacca, China’s access to the Eurasian continent and beyond will not be stopped.
The railway project is part of China’s BRI. This means that China can be connected to transport networks — Afghanistan, Iran, Transcaspian and Türkiye then with European countries. Pakistan will be a beneficiary country as the country will have easier and faster trade with China. It will be the modern replica of the ancient Silk Road trade.
Shift the balance of power away from the West
In terms of geopolitical impact, the infrastructure initiative will become a catalyst to shift the balance of power away from traditional Western-dominated trade routes. This will materialize the idea of a multipolar world that China has insisted on.
The railway link is vital for the development of trade and commerce, and the countries it passes through will have a good chance of improving the standard of living of their people. Europe should rethink its trade and transport strategy. It also has huge employment potential.
But at the end of the day, it’s a matter of capital investment. Who will bear the cost? Two countries are concerned, China and Pakistan.
Considering China’s investment policy in such projects, BRI construction projects have received substantial funding from host countries, and China’s contribution has been much smaller.
For example, for the $3.8 billion Mombasa-Nairobi railway, China provided only 5% of the total cost and the Kenyan government covered the remaining 95%. China has contributed 30% of the US$4 billion financing of the Addis Ababa-Djibouti railway line in Ethiopia.
Similarly, China covered 75% of the $5.9 billion cost of the Jakarta-Bandung high-speed railway, with Indonesian state-owned enterprises providing the rest.
But Pakistan will not be able to contribute to the project in the context of its financial and economic disaster. Last year, its gross domestic product was $370 billion, about six times the cost of the project.
The survey report states, “Due to energy shortages, poor investment environment and budget deficits, Pakistan’s economic growth rate is under pressure. In terms of railway investment and construction, Pakistan cannot provide sufficient financial and material support and mainly relies on Chinese enterprises for investment and construction.
Security issues on the project in Pakistan
Apart from the geologically complex terrain along the route and the technical challenges in constructing and operating the railway, there is also the issue of supporting infrastructure such as ports and logistics facilities which are almost not available in Pakistan.
There may be other non-technical issues. For example, Pakistan’s labor policies might be non-static and change with changing regimes. Pakistan’s policy is the real determinant of its labor policy.
Along with this, there is the complicated politics of security deficit in Pakistan due to the presence of highly radicalized elements in that country, who tend to kidnap critical people for ransom. China is already facing opposition in Balochistan and the port of Gwadar has seen long strikes and closures.
Chinese workers have been victims of terrorist attacks in the regions of Quetta and Khyber Pakhtunkhwa. Once China realized that Pakistan could not provide comprehensive life insurance for its workers in Pakistan, it threatened to shut down the projects. More than once, Pakistan has had to ask the Chinese authorities to justify its security shortcomings.
It seems that China may introduce its security system in Pakistan to guarantee the security of the developers of the trans-Karakoram railway. Pakistan has reportedly already ceded much of its vital infrastructure to China. Beijing will only move forward if it has devised a reliable mechanism to protect the lives of its workforce engaged in building the vital rail link.
Shaksgam Valley Challenge
Finally, an obstacle to the project is that the railway will pass through the Saxgam Valley, bordering Gilgit-Baltistan to the west and Ladakh to the south, which India claims is under illegal occupation by Pakistan. About 5,000 square miles of the Saxgam Valley was ceded to China from Pakistan, where the former built a railway to Lhasa.
India has warned both Beijing and Islamabad that all of Pakistan-occupied Kashmir, Gilgit-Baltistan and the Saxgam Valley belong to India and it has the will and power to take it back . There is also a 1994 parliamentary resolution to this effect.
In the end, three things are clear. First, China is determined to have a land link with Europe through crucial Asian states. The second is that Pakistan is unable to contribute to the proposed construction. The entire railway will be in the hands of China and Pakistan must content itself with the status of a vassal state.
The third point, and perhaps the most critical, is that the railway line will cross a disputed area. Once multipolarity is established or India is admitted to the Security Council as a permanent member with the right of veto, the whole political landscape of this Himalayan region will change considerably.
India must recover the territory illegally occupied by Pakistan and, after recovering it, focus on connecting with Central Asia via the Wakhan Corridor. This should be India’s ultimate foreign policy goal for the Eurasian region.