In recent years, China’s economic engagement with India has substantially increased. Provinces in China and states in India have become important stakeholders in this process. Recently, there have been efforts by the state of Punjab in India to reach out to China, seeking investment and cooperation in the sphere of agriculture. In November 2014, the Chief Minister of Punjab, Parkash Singh Badal visited Jiangsu province, which has made impressive strides in the sphere of agriculture. During the meeting between Badal and the governor of Jiangsu, Li Xueyong, it was proposed that the latter will assist Punjab in the sphere of fisheries, and that the two will build a sister province relationship.

Recently, the Chinese ambassador to India, Le Yucheng, visited the holy city of Amritsar in Punjab, which is also emerging as a trade hub with Pakistan. Trade through the Wagah (Pakistan)-Attari (India) border rose to $2.6 billion, from less than $400 million in 2004. One of the important reasons for this rise has been the Integrated Check Post (ICP) inaugurated in April 2012. The business community on both sides of the border believes that the level of trade could increase to $8 billion annually in the next two years.

The thrust of the Chinese Ambassador’s visit was to explore possible economic opportunities in Punjab. Interestingly, however, the Ambassador also referred to the possibility of trilateral cooperation between India, Pakistan, and China in the economic sphere. Members of the Confederation of International Chambers of Commerce and Industry (CICCI), as well as members of the Confederation of Indian Industry (CII), welcomed the suggestion, stating that the Pakistan-China Economic Corridor should be extended to the Wagah Border.


China-Pakistan Economic Corridor and Obstacles

The China-Pakistan economic corridor extends from Kashgar (Xinjiang) to Gwadar (Balochistan). It is an ambitious project, proposed during an agreement signed by Premier Li Keqiang during his visit to Pakistan in May 2013. A Pakistan-China Economic Corridor Secretariat was established in August 2013 in Islamabad.

The two countries will be connected through railways, highways and pipelines for the transportation of oil and gas. During Pakistani Prime Minister Nawaz Sharif’s visit to China in November 2014, China pledged to commit $45.6 billion to the project, of which $33.8 billion will be devoted to energy projects and $11.8 billion to infrastructure.

The corridor is a 2700 km highway from Kashgar to Gwadar via Khunjrab. The project seeks to enhance both road connectivity and technological connectivity across this route, and entails the construction of a world-class airport at Gwadar, an upgrade of the Karakorum highway, and the laying of a fibre optic cable. Prime Minister Sharif also recently inaugurated a 60 km four-lane highway. There have been reports – not yet confirmed – that the Corridor could be inaugurated by the Chinese President Xi Jinping on March 23, Pakistan’s National Day. The Pakistani Cabinet approved the corridor on February 23. A number of Chinese delegations have recently visited Pakistan in order to finalize this project.

There has been uncertainty with regard to the route of the corridor due to security concerns. The route was initially to pass through Dera Ismail Khan (Khyber Pakhtunwa), Khuzdar, Quetta, Zhob (Baluchistan). Rumors of a change in the route resulted in the government having to face the wrath of the business community as well as the political class of Balochistan and Khyber Pakhtunwa. It would also be pertinent to point out that Xinjiang Province itself has witnessed the rise of terrorism sponsored by certain Uighur groups. This could be a major stumbling bloc for the corridor.

If one were to specifically look at China’s desire to be part of a potential trilateral, what could be the reason?

First, China sees that it can lead the way in ‘The New Great Game.’ Former U.S. Secretary of State Hillary Clinton had been pushing for the Silk Road connecting South Asia with Central Asia, and sought the participation of both India and Pakistan. Clinton viewed this not just as a way of stabilizing Afghanistan, but also as a way of improving bilateral ties between India and Pakistan. In recent times, however, China has shown that it is keen to take the lead in the Silk Road on its western border. It is for this reason that it has exhibited interest in the TAPI (Turkmenistan, Afghanistan, Pakistan, India) pipeline, a project that was clearly a U.S. brainchild. In Afghanistan itself, China is increasing its footprint not just by making heavy investments in its economy and infrastructure, but also by helping Afghanistan negotiate with the Taliban.

By speaking about an India-Pak-China trilateral, Beijing is seeking to test the waters to see if India would be willing to be part of its ambitious Silk Road plans. This is not the first time that China has sought to include India in its connectivity plans. On the Eastern side, China is keen to involve India in the BCIM Corridor.

Apart from the Great Game, China is also keen to play the role of a peace broker between India and Pakistan and may have more leverage, not just because of Pakistan’s economic dependence upon China, but also because Beijing itself is worried about the rise of terrorism in Xinjiang. China sees India as a possible partner in the fight against terrorism.


What are the possibilities?

First, as discussed earlier, the Pakistan-China Economic Corridor is ambiguous and, given the problems in Xinjiang, it remains to be seen how far ahead the project will go. Secondly, China will likely attempt to play peace broker between India and Pakistan, but is not likely to invest a great deal of capital to do so since China has plenty of unresolved issues with India. Thirdly, while the current Narendra Modi government will not be averse to economic ties with Pakistan, India’s South Asia policy does not put too much emphasis on Pakistan, as is evident from its SAARC policy. Similarly, for access to Afghanistan, India will be open to finding common ground in certain areas with China, but is not likely to bank solely on China. India has invested heavily in the Chabahar port in Iran, which provides India access to both Central Asia and Afghanistan. The New Great Game is complex, which is clearly evident from the fact that China kept India out of the conversation in a recently held dialogue on Afghanistan. China has also made commitments to investments in rail infrastructure and motorways connecting Afghanistan and Pakistan.

In conclusion, while the India-Pakistan-China idea is fascinating, for the time being, seeing the complexities of the relationship between the three players involved, it seems a tad too utopian.


Image: Tim Graham-Getty Images News, Getty

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