RESEARCH PAPER

Field of Research: “CPEC: OBOR (One belt one road)”

Researcher: Fahad Iqbal

Research Supervisor: Sir Irshad Ahmad Kaleemi

Course: Crisis Communication

Class: MS (MS)-1; fall 2017

Submission Date: Jan 30th, 2018

Riphah Institute of Media Sciences (RIMS)

 Table of Contents:

Sr. # Contents Page #s

1. Preface I of III

2. Executive Summary II of III

3. Glossary of Terms and Acronyms III of III

4. Introduction 1 of 26

5. Statement of Problem 2 of 26

6. Research Question 2 of 26

7. Significance and Scope of Research 3 of 26

8. Review of Literature 4 of 26

9. Methodology 5 of 26

10. Organization of Paper 6 of 26

11. Chapter # 1: OBOR 7 of 26

12. Chapter # 2: CPEC, a component of OBOR 13 of 26

13. Chapter # 3: From CPEC to OBOR 18 of 26

14. Conclusion 21 of 26

15. Findings 22 of 26

16. Recommendations 23 of 26

17. Bibliography 24 of 26

18. References 25 of 26

19. Maps 26 of 26
Preface:

More than two millennia ago, China’s imperial envoy Zhang Qian helped to establish the Silk
Road, a network of trade routes that linked China to Central Asia and the Middle East. The
name came from one of China’s most important exports—silk. And the road itself had a huge
impact on the development of the entire region for centuries.

In 2013, Chinese President, Xi Jinping, put forward the idea of establishing a modern
equivalent to Silk route, creating a network of railways, roads, pipelines, and utility grids that
would link China and Central Asia, West Asia, and parts of South Asia called the belt and
road initiative.

As part of the one belt one road initiative China and Pakistan are building an exclusive
corridor known as the China-Pakistan Economic Corridor which will connect Gwader with
Xinjiang Uyghur Autonomous Region through various land routes and sea routes. Since
Pakistan is an important economic, as well as military ally of China. Chinese campaign to
pursue its projects worldwide under the policy framework of the OBOR will have a
tremendous impact on Pakistan and the China-Pakistan Economic Corridor.

The CPEC provides China with a deep sea water port at the Arabian Sea, multiple land links
to the South Asian country to be used as alternate trading routes and an Economic hub for
Chinese markets through basic infrastructure development and investment. The intentions to
build this corridor surfaced more than a decade and a half ago and because of the volatility of
the region and international interventions. The importance of the project is enormous for
China, as in the wake of any adversity; war or natural disaster within the Indian Ocean or
eastwards especially South China Sea, China’s trade with Africa, the West and most
importantly its oil imports from the Middle East would remain unhindered.

Page I of III
Executive Summary:

The Belt and Road Initiative is a development strategy proposed by China's president Xi
Jinping that focuses on connectivity and cooperation between Eurasian countries, primarily
the People's Republic of China (PRC), the land-based Silk Road Economic Belt (SREB) and
the oceangoing Maritime Silk Road (MSR). The strategy underlines China's push to take a
larger role in global affairs with a China-centered trading network. CPEC as an extension of
belt and road project is being portrayed as Game changer for the region.
This research paper primarily focuses on Research articles and papers as source material and
reviews the literature. Descriptive research method is applied to conduct the research through
Content description/explanation as methodology for research question.
For Pakistan, CPEC is a geopolitical gain as it helps Pakistan to access Central, West Asia
and Europe. Through CPEC links with OBOR Pakistan will have direct access and cheap
trading networks with Central Asia, Gulf Countries and African nations which will help
Pakistani exports to access their markets. The importance of CPEC is enormous for China, as
in the wake of any adversity; China’s trade with Africa, the West and most importantly its oil
imports from the Middle East would remain unhindered. Moreover CPEC would provide
much cheaper, efficient and secure trading routes for China.
CPEC is part of China’s grand vision, known as the One Belt, One Road (OBOR) initiative.
This vision extends from the Baltics in Europe to Southeast Asia and from China to Africa. It
is not a physical road like the Silk Road, that historic trade route from China to Europe
merely used for exchange of goods and ideas. The global geopolitical scenario has shifted.
The West especially the U.S and U.K have decided to look inwards instead of outwards.
China has aptly taken advantage of the situation.
In Conclusion, CPEC through its land link with China and maritime link with the Arabian
Sea is indeed a vital component of OBOR. This research paper’s most important finding is
that the OBOR Initiative is a grand global strategy of economic development which has no
parallels in human history. However some recommendations of this paper i.e. the Belt and
Road Initiative and CPEC should keep in line with the purposes and principles of the UN
Charter and WTO (World Trade Organization) should be followed so that U.S and Indian
concerns on them could be shown to be false.

Page II of III
Glossary of Terms and Acronyms:

Terms:

1. Strait of Malacca: The Strait of Malacca or Straits of Malacca is a narrow, 550 mi (890
km) stretch of water between the Malay Peninsula (Peninsular Malaysia) and the Indonesian
island of Sumatra.
2. Afghanistan-Pakistan Transit Trade Agreement: The Afghanistan–Pakistan Transit
Trade Agreement (also known as APTTA) is a bilateral trade agreement signed in 2010
by Pakistan and Afghanistan that calls for greater facilitation in the movement of goods
amongst the two countries.
3. South China Sea: The South China Sea is a marginal sea that is part of the Pacific Ocean,
encompassing an area from the Karimata and Malacca Straits to the Strait of Taiwan of
around 3,500,000 square kilometers (1,400,000 sq mi).
4. Sea Lines of Communication: Sea lines of communication (abbreviated as SLOC) are a
term describing the primary maritime routes between ports, used for trade, logistics and naval
forces. It is generally used in reference to naval operations to ensure that SLOCs are open, or
in times of war, to close them.

Acronyms:

1. AIIB stands for Asian Infrastructure Investment Bank

2. PLAN stands for People’s Liberation Army Navy
3. SCO stands for Shanghai Cooperation Organization
4. ASEAN stands for Association of South East Asian Nations
5. QATT stands for Quadrilateral Agreement on Traffic in Transit
6. APEC stands for Asia Pacific Economic Cooperation
7. MOU stands for Memorandum of Understanding

Page III of III

Introduction:

In 2013, China unveiled to the world its dream to revive the ancient Silk Road by undertaking
massive infrastructure projects and adding value to ports around the Silk Road. This paper
focuses on the various facets of CPEC as vital component of belt and road (OBOR) initiative
and then highlights different challenges the China-Pakistan Economic Corridor (CPEC)
faces. While each and every corridor whether over land or through sea is important, but none
so much as the CPEC because of its strategic location militarily as well as economically. It is
the only corridor which is connected to another corridor and helps provide landlocked
countries with access to the sea.

China’s president, Xi Jinping, proposed establishing a modern equivalent of Silk Road. The
vision is to create a network of railways, roads, pipelines, and utility grids that would link
China to Central Asia, South Asia, South East-Asia, Far-East Asia, West Asia, Eastern
Europe, Western Europe and Africa. This initiative, One Belt and One Road (OBOR), aims to
create the world’s largest platform for economic cooperation.

The importance of CPEC is enormous for China, despite the volatile conditions in Pakistan
and Xingjian Province; the Chinese resolve to build the CPEC has not been dazed. It is
through the massive investments in infrastructure in Pakistan that China seeks to tackle the
menace of terrorism and poverty, which in the eyes of international observers will hinder
progress. No country has invested in Pakistan so massively in a single sweep.

CPEC is a significant part of initiating OBOR. From a broader perspective, OBOR is China’s
grand Geo-Political strategy to transform the World Order as we know it. OBOR is an
ambitious project that seeks to connect the People’s Republic of China with countries of
Europe, Asia and Africa through land and sea routes. The primary objective is to capture a
larger share of global trade and commerce.

Page 1 of 26
Problem Statement:

CPEC is a component of OBOR.

Research Question:

Is CPEC a component of OBOR?

Page 2 of 26
Significance and Scope of Research:

The significance of this research is huge due to the enormous cost and scope of this project.
This Research will guide governments, state institutions, academic universities about the
history and impact of OBOR and its component CPEC on the global political order. The
OBOR has been perceived by Chinese planners and their well-wishers as a game changer for
the entire region and beyond.

This Research highlights the most important challenges OBOR and its vital component CPEC
face from intercontinental, transcontinental, non-state actors and neighboring states. Even a
general layman can read and relate to this research. Overall this research provides guidance
for Think tanks, Universities, and governments alike to understand the complexity of OBOR
and its component part i.e. the China Pakistan Economic Corridor.

Page 3 of 26
Literature Review:

Ample material is available for research in this field on the internet. As source material some
independent research articles, Think tanks research material, NGOs research, University
research papers and online articles, Newspapers Opinion columns, journals, encyclopedia and
magazines have been used for this research paper.
For Research on OBOR, the Research article titled “One Belt and one road: Connecting
China and the World” provides a good source material. It portrays OBOR initiative as a
harbinger of cultural exchange between the people of Asia, Europe and Africa by linking
them with one another though land and sea routes. The paper explains that by both
connecting and enhancing the productivity of countries along the new Silk Route, China
hopes that the benefits of cooperation can be shared and that the circle of friendship will be
strengthened and expanded.
For Research on CPEC, a component of OBOR; the Research Paper titled “Analysis of
Chinese Economic and National Security Interests in China- Pakistan Economic Corridor
(CPEC) under the Framework of One Belt One Road (OBOR) Initiative” provides an
excellent source material. This paper analyzes OBOR and CPEC within a Security, Economic
and Geopolitical framework from a Chinese perspective. The paper explains the geographical
constraints in which Economic Giant China conducts its trade with the rest of the world
particularly West Asia and Europe and analyzes CPEC as providing China with cheap,
efficient and secure lines of communication for trade. This paper also explains the role of
China’s Military in securing and countering any external threat posed to Chinese Economic
and Strategic interests especially in and around South China Sea. Another research paper
titled “One Belt and One Road: Impact on China-Pakistan Economic Corridor” explains the
external and internal security challenges facing CPEC and OBOR. The paper emphasizes on
the threat posed by religious and separatist non-state actors and even state actors such as U.S
and India to undermine CPEC, encircling China and the need to recognize and overcome
these security challenges through bilateral coordination.
An Op-Ed titled “From CPEC to OBOR” analyzes the Chinese obsession with OBOR and
explains CPEC as a tiny portion in the much bigger game of Global domination by seemingly
friendly People’s Republic of China. This newspaper’s opinion piece explains China as an
emerging Global Power replacing U.S Dominance in international affairs and OBOR as
means of promoting “free trade” by a Communist Regime operating on State Capitalist
Economy in the wake of U.S looking inwards under “America First” slogan. Above all it
explains this project as forwarding Chinese National Interests as most populous nation of the
World.

Page 4 of 26
Methodology:

Descriptive research method is applied to conduct this research. Descriptive research means
description of the state of affairs as it exists at present. Researcher only reports what has
happened or what is happening. He uses the written account of information or narration
available to him and that which comes through searching and investigating the issue. This
paper primarily provides content description and explanation on various topics. The approach
behind conducting this research consists of three steps. First an understanding of the
statement of problem and research question, secondly breaking and narrowing them down
into chapter headings and finally search, identify and describe the content for each chapter.
All the content has been used from online sources. Descriptive method is used because the
researcher aims to answer the problem statement through a simple enquiry or investigation;
search based research question i.e. “Is CPEC a component of OBOR” and then provides
account description and narration for “what is CPEC in the context of OBOR”. The
research paper than explores the information on aspects of OBOR and CPEC through a
geographical, historical, cultural, geopolitical, economic and national security framework as
Projects initiated in the past and as they exist presently. In short this paper revolves around
the subject of international relations and affairs among the Project stakeholders and its
opponents. The conclusion, findings and recommendations of this research paper are derived
from each chapter’s content explanation. Descriptive form of this paper underlines its
methodology.

Page 5 of 26
Organization of Paper:

This research paper starts with Preface in which historical context and introduction of the
topic is explained. Than the paper explains Executive Summary which is an overall summary
of the entire research. After that Glossary of Terms and Acronyms section appears which
defines the terms and abbreviations. Than the Introduction section briefly explains the
historical background keeping in view the research question along with briefly explaining
each chapter. Than the problem statement and the research question grapples with actual
problem and the question behind it respectively. Then the Significance and Scope section
which briefly explains the importance and limitations of this research. After that the Review
of Literature briefly explains the thought process and sources behind research articles. Than
Methodology briefly explains which research method is used and why it is used. Than
Organization of Paper which sums up the contents of the research paper. Than Chapter#1
explain in detail OBOR. Than Chapter#2 which explains in detail CPEC as component of one
belt one road initiative. Than Chapter#3 the final chapter explains the intentions behind
CPEC and OBOR. Than the Conclusion, briefly explains the results of the research question.
Than the Findings state the principal outcomes of the Research Paper; what the paper
revealed or indicated. Than the Recommendations section briefly recommends some
suggestions based on conclusion and findings. After that Bibliography states the titles,
organizations and authors of the source material. Than the References section provides the
website links of the source material and finally Maps section provide maps for Silk Road,
OBOR and CPEC.

Page 6 of 26
Chapter # 1: OBOR

“China is leading the effort to create the World’s largest Economic Platform”– Tian Jinchen,
Director of the Western Development Department of National Development and Reform
Commission, People’s Republic of China

OBOR is the modern equivalent of the New Silk Road, a network of railways, roads,
pipelines, and utility grids that would link China to West Asia, Europe and Africa. This
initiative, One Belt and One Road (OBOR), comprises more than physical connections. It
aims to create the world’s largest platform for economic cooperation.

Components:

The two main components are: the Silk Road Economic Belt (SREB) and the 21st Century
Maritime Silk Road (MSR). The Silk Road Economic Belt is envisioned as three routes
connecting China to Europe (via Central Asia), the Persian Gulf, the Mediterranean (through
West Asia), and the Indian Ocean (via South Asia). The 21st Century Maritime Silk Road is
planned to create connections among regional waterways. More than 60 countries, with a
combined GDP of $21 trillion, have expressed interest in participating in the OBOR action
plan. These routes are illustrated in Figure 1, 2 & 3 in Maps section.

Vision:

The Belt and Road initiative is geographically structured along 6 corridors, and the maritime
Silk Road.

1. China–Pakistan Corridor, running from South-Western China to Pakistan

2. China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia

3. China–Central Asia–West Asia Corridor, running from Western China to Turkey

4. China–Indochina Peninsula Corridor, running from Southern China to Singapore

5. New Eurasian Land Bridge, running from Western China to Western Russia

6. China–Myanmar–Bangladesh–India Corridor, running from Southern China to

Myanmar

7. Maritime Silk Road, running from the Chinese Coast over Singapore to the
Mediterranean Sea

Page 7 of 26
Bilateral Coordination:

The effort has already made some practical achievements. China has signed bilateral
cooperation agreements related to the project with Pakistan, Hungary, Mongolia, Russia,
Tajikistan, and Turkey. A number of projects are under way, including a train connection
between eastern China and Iran that may be expanded to Europe. There are also new rail
links with Laos and Thailand and high-speed-rail projects in Indonesia.

Economic Integration:

In 2014, China established the $40 billion Silk Road Fund to finance these initiatives, and it
has made investments in several key projects such as developing various transport links and
energy grids across Pakistan and modernizing the Gwadar Deep Sea Port etc. These projects
are just the start as OBOR enters a new stage of more detailed and comprehensive
development. This work will see the development of six major economic corridors, including
the New Eurasian Land Bridge, China–Mongolia–Russia, China–Central Asia–Western Asia,
Indo-China Peninsula, China–Pakistan, and Bangladesh–China–India–Myanmar. These
corridors will be the sites of energy and industrial clusters and will be created through the use
of rail, roads, waterways, air, pipelines, and information highways. By both connecting and
enhancing the productivity of countries along the new Silk Road, China hopes the benefits of
cooperation can be shared and that the circle of friendship will be strengthened and expanded.

Principles:

This initiative to jointly build the Belt and Road, embracing the trend towards a multi-polar
world, economic globalization, cultural diversity and greater IT application, is designed to
uphold the global free trade regime and the open world economy in the spirit of open regional
cooperation.

Framework:

Silk Road Economic Belt:

The Belt and Road runs through the continents of Asia, Europe and Africa, connecting the
vibrant East Asia economic circle at one end and developed European economic circle at the
other, and encompassing countries with huge potential for economic development. The Silk
Road Economic Belt focuses on bringing together China, Central Asia, Russia and Europe
(the Baltic); linking China with the Persian Gulf and the Mediterranean Sea through Central
Asia and West Asia; and connecting China with Southeast Asia, South Asia and the Indian

Page 8 of 26
Ocean. On land, the Initiative will focus on jointly building a new Eurasian Land Bridge and
developing China-Mongolia-Russia, China-Central Asia-West Asia and China-Indochina
Peninsula economic corridors by taking advantage of international transport routes, relying
on core cities along the Belt and Road and using key economic industrial parks as
cooperation platforms.

Maritime Silk Road:

The 21st-Century Maritime Silk Road is designed to go from China’s coast to Europe through
the South China Sea and the Indian Ocean in one route, and from China’s coast through the
South China Sea to the South Pacific in the other. At sea, the Initiative will focus on jointly
building smooth, secure and efficient transport routes connecting major sea ports along the
Belt and Road.

Policy Coordination:

Enhancing policy coordination is an important guarantee for implementing the Initiative.

Countries along the Belt and Road can coordinate their economic development strategies and
policies, work out plans and measures for regional cooperation, negotiate to solve
cooperation-related issues, and jointly provide policy support for the implementation of
practical cooperation and large-scale projects.

Connectivity:

Connectivity is a priority area for implementing the Initiative. On the basis of respecting each
other’s sovereignty and security concerns, countries along the Belt and Road can improve the
connectivity of their infrastructure construction plans and technical standard systems, jointly
push forward the construction of international trunk passageways, and form an infrastructure
network connecting all sub regions in Asia and between Asia, Europe and Africa step by step.

Trade:

Investment and trade cooperation is a major task in building the Belt and Road. China strives
to improve investment and trade facilitation, and remove investment and trade barriers for the
creation of a sound business environment within the region and in all related countries.
Countries along the Belt and Road can enhance customs cooperation such as information
exchange, mutual recognition of regulations, and mutual assistance in law enforcement;
improve bilateral and multilateral cooperation in the fields of inspection and quarantine,

Page 9 of 26
certification and accreditation, standard measurement, and statistical information; and work
to ensure that the WTO Trade Facilitation Agreement takes effect and is implemented.

Financial Integration:

Financial integration is an important underpinning for implementing the Belt and Road
Initiative. It can deepen financial cooperation, and make more efforts in building a currency
stability system, investment and financing system and credit information system in Asia. It
can expand the scope and scale of bilateral currency swap and settlement with other countries
along the Belt and Road, open and develop the bond market in Asia, make joint efforts to
establish the Asian Infrastructure Investment Bank and BRICS New Development Bank,
conduct negotiation among related parties on establishing Shanghai Cooperation
Organization (SCO) financing institution, and set up and put into operation the Silk Road
Fund as early as possible.

Socialization:

People-to-people bond provides the public support for implementing the Initiative. It can
carry forward the spirit of friendly cooperation of the Silk Road by promoting extensive
cultural and academic exchanges, personnel exchanges and cooperation, media cooperation,
youth and women exchanges and volunteer services, so as to win public support for
deepening bilateral and multilateral cooperation.

Cooperation Mechanisms:

OBOR can enhance the role of multilateral cooperation mechanisms, make full use of
existing mechanisms such as the Shanghai Cooperation Organization (SCO), ASEAN Plus
China (10+1), Asia-Pacific Economic Cooperation (APEC), Asia-Europe Meeting (ASEM),
Asia Cooperation Dialogue (ACD), Conference on Interaction and Confidence-Building
Measures in Asia (CICA), China-Arab States Cooperation Forum (CASCF), China-Gulf
Cooperation Council Strategic Dialogue, Greater Mekong Sub region (GMS) Economic
Cooperation, and Central Asia Regional Economic Cooperation (CAREC) to strengthen
communication with relevant countries, and attract more countries and regions to participate
in the Belt and Road Initiative.

Page 10 of 26
Economic Liberalization:

Northwestern and northeastern region: OBOR can make good use of Xinjiang Uyghur
Autonomous Region’s geographic advantages and its role as a window of westward opening-
up to deepen communication and cooperation with Central, South and West Asian countries,
make it a key transportation, trade, logistics, culture, science and education center, and a core
area on the Silk Road Economic Belt.

Southwestern region: It can give full play to the unique advantage of Guangxi Zhuang
autonomous region as a neighbor of ASEAN countries, speed up the opening-up and
development of the Beibu Gulf Economic Zone and the Pearl River-Xijiang Economic Zone,
build an international corridor opening to the ASEAN region, create new strategic anchors for
the opening-up and development of the southwest and mid-south regions of China, and form
an important gateway connecting the Silk Road Economic Belt and the 21st-Century
Maritime Silk Road.

Coastal regions: The project can leverage the strengths of the Yangtze River Delta, Pearl
River Delta, west coast of the Taiwan Straits, Bohai Rim, and other areas with economic
zones boasting a high level of openness, robust economic strengths and strong catalytic role,
speed up the development of the China (Shanghai) Pilot Free Trade Zone, and support Fujian
province in becoming a core area of the 21st-Century Maritime Silk Road.

Inland regions: It can make use of the advantages of inland regions, including a vast
landmass, rich human resources and a strong industrial foundation, focus on such key regions
as the city clusters along the middle reaches of the Yangtze River, around Chengdu and
Chongqing, in central Henan province, around Hohhot, Baotou, Erdos and Yulin, and around
Harbin and Changchun to propel regional interaction and cooperation and industrial
concentration.

China in Action:

High-level guidance and facilitation: President Xi Jinping and Premier Li Keqiang have
visited over 20 countries, attended the Dialogue on Strengthening Connectivity Partnership
and the sixth ministerial conference of the China-Arab States Cooperation Forum, and met
with leaders of relevant countries to discuss bilateral relations and regional development
issues.

Page 11 of 26
Signing cooperation framework: China has signed MOUs of cooperation on the joint
development of the Belt and Road with some countries, and on regional cooperation and
border cooperation and mid-and long-term development plans for economic and trade
cooperation with some neighboring countries. It has proposed outlines of regional
cooperation plans with some adjacent countries.

Promoting project cooperation: China has enhanced communication and consultation with
countries along the Belt and Road, and promoted a number of key cooperation projects in the
fields of infrastructure connectivity, industrial investment, resource development, economic
and trade cooperation, financial cooperation, cultural exchanges, ecological protection and
maritime cooperation where the conditions are right.

Embracing a Brighter Future:

Though proposed by China, the Belt and Road Initiative could be a common aspiration of all
countries along their routes. China is ready to conduct equal-footed consultation with all
countries along the Belt and Road to seize the opportunity provided by the Initiative, promote
opening-up, communication and integration among countries in a larger scope, with higher
standards and at deeper levels, while giving consideration to the interests and aspirations of
all parties. The development of the Belt and Road can be open and inclusive for all
stakeholders.

Page 12 of 26
Chapter#2: CPEC, a component of OBOR

China–Pakistan Economic Corridor (CPEC):

The CPEC is an ongoing development mega project which aims to connect Gwadar Port of
Pakistan to China’s northwestern region of Xinjiang, via a network of highways, railways and
pipelines. The economic corridor is considered central to China–Pakistan relations and will
run about 2700 km from Gwadar to Kashghar. Under CPEC, a collection of infrastructure
projects are currently under construction throughout Pakistan. Originally valued at $46
billion, the value of CPEC projects is now worth $62 billion. CPEC is intended to rapidly
modernize Pakistani infrastructure and strengthen its economy by the construction of modern
transportation networks, numerous energy projects, and special economic zones. CPEC is
shown in Figure 4 in the Maps section.

A vast network of highways and railways are to be built under the aegis of CPEC that will
span the length and breadth of Pakistan. Over $33 billion worth of energy infrastructure are to
be constructed by private consortia to help alleviate Pakistan's chronic energy shortages,
which regularly amount to over 4,500MW, and have shed an estimated 2–2.5% off Pakistan's
annual gross domestic product.

Were the initial $46 billion worth of projects to be implemented, the value of those projects
would be roughly equivalent to all foreign direct investment in Pakistan since 1970, and
would be equal to 17% of Pakistan's gross domestic product. CPEC is seen as the main plank
of Chinese President Xi Jinping's Belt and Road Initiative. The Corridor is an extension of
China’s proposed 21st century Silk Road initiative. China-Pakistan Economic Corridor and
its connectivity with Central Asia, Middle East and Africa will help to shape entire region.
The corridor will be a strategic game changer in the region and would go a long way in
making Pakistan a richer and stronger entity. The investment on the corridor will transform
Pakistan into a regional economic hub. CPEC as component of OBOR is shown in Figure 5
in the Maps section.

Geopolitical Dilemma:

In the event that China were to face hostile actions from a state or non-state actor, energy
imports through the Straits of Malacca could be halted, which in turn would paralyze the
Chinese economy in a scenario that is frequently referred to as the "Malacca Dilemma". In
addition to vulnerabilities faced in the Straits of Malacca region, China is heavily dependent
upon sea-routes that pass through the South China Sea, near the disputed Spratly
Islands and Paracel Islands, which are currently a source of tension between China, Taiwan,
Vietnam, the Philippines, and the United States. The CPEC project will allow Chinese energy
Page 13 of 26
imports to circumvent these contentious areas and find a new artery in the west through the
Persian Gulf and the Arabian Sea therefore reducing the distance, and thereby decrease the
possibility of confrontation between the United States and China. Gwader port will provide
easy and quick access for oil imports from gulf through Arabian Sea and the CPEC land route
from Gwader to Kashgar will carry this cargo thereby reducing time and significant amount
of resources for Chinese imports and increasing the efficiency of trade.

CPEC Integration:

1. CPEC-Central Asia-West Asia Corridor (through silk road economic belt)

2. CPEC-Arabian Sea-Gulf of Aden-Arabian Peninsula-Red Sea-Suez Canal-Africa

(through maritime silk road)

CPEC Connectivity and Geopolitical Gain:

For Pakistan CPEC will provide a huge geopolitical gain as it helps Pakistan and its trading
markets to access Central and West Asia and into Europe via China-Central Asia-West Asia
Corridor through land route while on the sea route CPEC will connect Pakistan to Africa and
the middle east through Maritime Silk road via Arabian and Red Sea. The CPEC connects
Gilgit to Kashgar via Khunjrab highway and from Kashgar, Xinjiang the next corridor
begins. The China-Central Asia-West Asia corridor goes through Tajiskistan, Uzbekistan,
Turkmenistan, Iran and reaching Turkey. The Maritime Silk Road will connect Gwader to
Middle East and Africa through Arabian Sea and Red Sea via Gulf of Aden and Suez Canal.
Pakistan will have direct access to Gulf Countries such as Yemen and Saudi Arabia and
African nations such as Somalia, Djibouti, Ethiopia, Eritrea, Sudan and Egypt through
connection of CPEC with maritime Silk Road of OBOR while bypassing Iran and the Persian
Gulf.

Access to troubled Regions:

The CPEC Alignments will improve connectivity to restive Xinjiang Uyghur Autonomous
Region and the troubled Baluchistan Province, thereby increasing the region's potential to
attract public and private investment. CPEC is considered central to China–Pakistan relations;
its central importance is reflected by China's inclusion of the project as part of its 13th five-
year development plan.

Page 14 of 26
Route to circumvent Afghanistan:

In February 2016, the Pakistani government signaled its intention to completely bypass
Afghanistan in its quest to access Central Asia by announcing its intent to revive the QATT
so that Central Asian states could access Pakistani ports via Kashgar instead of
Afghanistan, thereby allowing the Central Asian republics to access Pakistan's deep water
ports without having to rely on a politically unstable Afghanistan as a transit corridor.

Alternate route to Central Asia:

China expects that the economic corridor will make it capable enough to suck oil and gas
from Central Asian countries with the help of pipelines through Baluchistan into Xinjiang
Uyghur Autonomous Region. Chinese goods would have much more compatible, nimble and
fast route to global markets than the Strait of Malacca, which China presumes is at the mercy
of America. China and America have tense relation with each other in the South China Sea.
China has dispute with some other countries such as Vietnam and Philippines, the American
allies over the Spratly and Paracel Islands. China apprehends American hegemonic intentions
in the region in the vicinity of Malacca Strait. In the conflict of two, China’s trade and supply
may be blocked. China’s economy would be jeopardized. Thus, China needs an alternative
route and such route is Gwadar developed by Pakistan and China in 2007 and to make
Gwadar fully operational, CPEC is imperative.

Security challenges:

The importance of the project is enormous for China, as in the wake of any adversity; war or
natural disaster within the Indian Ocean or eastwards, China’s trade with Africa, the West
and most importantly its oil imports from the Middle East would remain unhindered. That is
why despite the volatile conditions in Pakistan and Xingjian Province, the Chinese resolve to
build the CPEC has not been dazed. It is through the massive investments in infrastructure in
Pakistan that China seeks to tackle the menace of terrorism, which in the eyes of international
observers will hinder progress. No country has invested in Pakistan so massively in a single
sweep.

Threats of Terrorism:

India being a close ally of USA for a number of years is being strengthened as part of their
China containment policy in the power struggle game between China and USA in Asia. India,
already having its own regional hegemonic designs and rivalry with China, makes it a perfect
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choice for USA as an ally in the region. India is establishing stronger ties with Japan and
Vietnam which are confronting China over territorial disputes; and now Prime Minister Modi
has voiced concerns over the CPEC being “unacceptable” which shows his desperation to
halt China’s plans. India in its bid to curtail China’s advances will make every effort to
disrupt progress on the projects involving the CPEC as it is seen as a rival for India’s own
aspirations of developing an energy corridor via trans Afghanistan road and rail links from
Uzbekistan’s Termez to Iran’s Chabahar in the south east, where India is investing heavily to
develop the Chabahar port. The Indian intelligence agency, Research and Analysis Wing
(RAW), already has presence in Pakistan owing to the nature of relations with its archrival.

Naval Impact:

The CPEC is an extension of the OBOR, but has special naval and energy security facets
built into it which complement the corridors of the SREB and MSR, giving the CPEC
credence in the light of heavy geopolitics which are otherwise aiming to undermine it.
Currently, the People’s Liberation Army’s Navy is not very well equipped and is not very
well-experienced as compared to other major naval powers in the world. With the projects
within the MSR which aim at linking the Baltic Sea with the Pacific Ocean, China needs to
have a large functional Navy for safeguarding its assets away from home as outlined in its
Military Strategy white paper which outlines a new policy of “active defense,” released by
the Chinese Ministry of National Defense on May 26, 2015.

CPEC, an Opening to the Indian Ocean and Middle East:

Oil imports from Middle East are decreasing due to rising domestic oil shale exploration and
coal exploration. With rising oil consumption, China is likely to be a key stake holder in the
of the Middle East oil and Gwadar Port, the World largest deep sea port located just 250
kilometers from the Persian Gulf will turn out to be strategic outpost for future Chinese
interests in the region. The project of CPEC would connect the Western Chinese province of
Xinjiang Uyghur Autonomous Region with Gwadar port in Indian Ocean through an oil and
gas pipeline along with a planned high-speed railways and highway network.

National Security Imperatives of CPEC:

While the OBOR may be purely an economic initiative, it will have far reaching effects on
future geo-political landscape. The regions being covered by OBOR Initiative comprise

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nearly 70 percent of World’s Energy Reserves and all the Muslim Countries. The plan will
impact US position abroad and Washington’s response to the Initiative will shape the future
course of US-China relations as well as the fate of global system. CPEC is also an important
segment of this grand Initiative. Gwadar Port which has been handed over to a Chinese
company for a lease of forty years is located on the Gulf of Oman, just forty kilometers away
from the Strait of Hurmuz, which is a trade route of one third of World’s energy supplies.
China considers that improvements in security and economics are interrelated and
development in one can complement the other. China-Pakistan Economic Corridor can
alleviate some of the domestic security concerns of China stemming from its predominantly
Muslim province of Xinjiang Uyghur Autonomous Region in the western China and the
separatist feelings in Baluchistan.

Prospects of Regional Integration through CPEC:

Previously Sino-US relations remained the top priority of Chinese foreign policy and China
feared that improving relations with neighbors will inevitably cause conflicts in Sino-US
relations. Readjustment in Chinese Foreign Policy has come in a great way where improving
relations with neighbors has been accorded priority even when it comes in conflicts with
Sino-US relations. CPEC is a product of this regional integration and this project is likely to
reduce Pakistan’s dependence on US, thus reducing US influence in the region. China
believes that true powers will finally opt for regional integration and Japan lost the place of
second largest economy in the World due to lack of appetite for regional integration.

Securing Sea Lanes of Communications (SLOCs) in Indian Ocean Region (IOR):

China has adopted a very cautious approach towards projecting its naval bases abroad as
compared to its military and economic muscles. People’s Liberation Army Navy (PLAN)
does not have any overseas bases except a naval post in Djibouti for anti-piracy operations
along with US, French and Japanese Naval Forces stationed there. The so called “String of
Pearls” theory hypotheses that China aims to build a network of Sea Ports and naval facilities
in the Indian Ocean protecting its SLOCs which starts from Chinese main land in the South
China Sea and extends to the Port Sudan. The pearls along this string are considered to be
Myanmar, Maldives, Bangladesh, Srilanka and Pakistan in IOR, where China would build
commercial ports and shipping facilities. Japan, India and USA have been actively engaging
in maritime security operations in the Indian Ocean Region (IOR) securing vital Sea Lanes of
Communication (SLOCs).

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Chapter#3: From CPEC to OBOR

Global Marketing:

On May 12, 2017, Former Prime Minister Nawaz Sharif along with heads of 27 states
reached Beijing to attend the World Forum on One Belt One Road Initiative. China is
implementing its vision of leading global trade and the underlying argument is prosperity
through connectivity and cooperation. The OBOR initiative, as the name indicates, is still in
the phases of being rolled out. The only “well begun, half done” story that the Chinese
Government could speak of in favor of OBOR was the preliminary success of CPEC in
Pakistan. It is an ambitious stance, but one with considerable credibility. CPEC is a display of
commitment by President Jinping. That is why presence of Pakistan was so critical to the
success of OBOR forum. However, it would be more than prudent to differentiate between
the goals and prospects of CPEC and OBOR separately.

A Grand Strategy:

To begin with, it is clear that CPEC is a significant part of initiating OBOR . From a broader
perspective, OBOR is China’s grand Geo-Political strategy to transform the World Order as
we know it. OBOR is an ambitious project that seeks to connect the People’s Republic of
China with countries of Europe, Asia and Africa through land and sea routes. The primary
objective is to capture a larger share of global trade and commerce. Secondary objective is to
flood Chinese exports in the newly developed land and sea routes. The third is maintaining a
means to acquire cheap oil and gas back and forth as and when required by the expanding
giant of an economy that is China. All these make up the OBOR initiative in its entirety.

The Flagship Project:

It is evident from the above that CPEC is the flagship project and one small portion of the
gigantic enterprise that is OBOR . In total, over 60 countries will be directly connected to
China, becoming reliant on its goods and services. In exchange of this reliance, China will be
willing to offer development in infrastructure, trade, commerce and mutual benefits through
exchange. After being formally unveiled by Xi Jinping in October, 2013, OBOR is being
praised by economic experts in China unanimously. Gwadar has taken center stage in
the CPEC portion of OBOR as it touches the Maritime as well as the Land Silk Route. The
distance that Chinese exports have to travel before reaching warm waters has been reduced
by over 12 thousand kilometers. China seeks to attain the same competitive edge through all
other 5 routes that are under development. All this is happening when China’s economy
began to slow down after a double digit growth in GDP over the last ten momentous years.
From a point of view of National and Organizational theory, after reaching a particular point
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in development and maturity curve, the graph either goes down or reenergizes itself through
innovation and clever restructuring. OBOR is that very readjustment and modernization.

Political and Socio-Economic Aspects:

CPEC and OBOR complement each other not just for the sake of trade and commerce but
also in socio-political aspects. Pakistan is a long-standing ally with a common border. The
Pakistan army is heavily engaged in fighting off militant organizations that allegedly have
contacts with hostile neighbor India. From a realist perspective, it would only be a matter of
time before the fire of terrorism spreads from Pakistani borders to Muslim majority areas in
China. India being a direct economic competitor in the region would surely benefit from
disruption in Chinese development and progress. CPEC has political objectives as well as
economic. A developed and stable Pakistan would be a bastion against spread of violence and
militant organizations. It would not be a difficult task to fan anarchy in a Communist state
that discourages all sorts of religious beliefs. Pakistan with a strong Government would make
sure that external interference in the region is kept under check, whether coming from
American controlled Afghanistan or Indian guided covert operations. On the other hand,
industrial and commercial success in Pakistan has been hampered by insufficient
infrastructure and power shortage. CPEC would eliminate these two complications thereby
giving the Pakistan economy the boost it has needed for decades. It would mark as a shift in
diplomatic and economic independence, out of the clutches of Washington based
organizations like World Bank and IMF.

Geopolitical Balancing:

Another influential aspect of OBOR was the presence of Russian President Putin at the
Forum and the absence of U.S President Trump. The politics of isolation and protectionism is
taking over significant Western countries. Britain decided to part ways with the European
Union and the United States is putting America first and calling NATO to be out-dated.
Donald Trump’s campaign of building walls instead of bridges has given an involuntary
nudge to OBOR . Finally, the United States has lost the advantage that kept it in the lead. For
the past 60 years, the Americans actively supported open, fair and free trade. World Trade
Organization, IMF and the World Bank championed the cause of fair capitalism. It advocated
that the free market and fair competition can fix the evils of economic disparity. The relevant
policies put countries like the United Kingdom and the United States as world leaders. As of
2017, these two countries have decided to look inwards instead of outwards. China has aptly
taken advantage of the situation. President Jinping is now the champion of global trade and

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mutual cooperation. OBOR is the spearhead of China’s vision to take over as the world
leader. Asia has gained what Western countries have lost in the past few years.

Financial Challenges:

Hand in hand with the success of CPEC is the promotion for OBOR . It is not surprising that
the worth of projects under CPEC has been enhanced from 42 Billion Dollars to 54 Billion.
For Pakistan, this is the time to form strong bonds and fulfill the commitments made as per
the MoUs signed with the Chinese diplomats. The Chinese Government and its vision of
expansion are too grand to be interrupted by trivial administrative and domestic
complications. There is a lot to gain for both China and Pakistan. CPEC is the largest
investment that Pakistan has ever attracted since independence and OBOR is the largest trade
and diplomatic expansion project that the Chinese people have ever sponsored.

A Game of National Interests:

China, no doubt, has remained a friend to Pakistan. However it’s their geopolitical
compulsion as well as ours — there is no more to it. Countries’ relations are subject to
change depending on the state of international affairs. During state visits, leaders describe
their mutual relations in hyperbole but this is just to sound warm and sweet. The China-
Pakistan Economic Corridor (CPEC) is one such example of a narrative fed to the people
without any perspective. Putting it into perspective, CPEC is part of China’s grand vision,
known as the One Belt, One Road (OBOR) initiative. This vision extends from the Baltics in
Europe to Southeast Asia and from China to Africa. Trace it on the map and the road
traverses all the countries in between. It is not a physical road like the Silk Road, that historic
trade route from China to Europe. That old Silk Road was not like Sher Shah Suri’s road
from Peshawar to Kolkata, but caravans meandering on different routes from one
caravanserai to another, carrying both goods and ideas.

As an official policy, OBOR is overseen by China’s powerful National Development and

Reform Commission and the ministries of foreign affairs and commerce, as sanctioned by the
State Council, the nation’s chief administrative body. OBOR has become the ‘in’ thing to be
associated with in China’s global economic strategy. As the word ‘road’ itself implies,
projects (especially those involving construction of physical infrastructure) that facilitate
commerce between China and the wider global community reflect the basic spirit of OBOR.

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Conclusion:

This Research paper comprehensively explains OBOR, its connectivity with CPEC and
concludes that CPEC through its land link with China and maritime link with the Arabian Sea
is indeed an important component of OBOR. Gwadar forms the crux of the CPEC project, as
it is envisaged to be the link between China's ambitious One Belt, One Road project, and
its Maritime Silk Road project.

The OBOR Initiative is a grand global strategy of economic development which has no
parallels in human history and CPEC indeed being the leading project under the scheme has
its own significance. A detailed discussion of perceived Chinese objectives from the Initiative
have been carried out in this paper, yet, the degree of success in achieving these objectives is
not ascertained. The rate of success in CPEC will determine the future course of OBOR

The project would consume some of the Chinese excess capital in outward foreign direct
investment providing multibillion dollar business opportunities to the Chinese state owned
enterprises in energy, transportation and construction sectors. CPEC will also testify the new
model of economic development and prove to be a catalyst in keeping the Chinese “new
normal” economic growth on a steady upward pattern. CPEC is a course of mutual benefits
and another milestone of strategic partnership between China and Pakistan.

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Findings:

The Findings of this Research Paper are as follows:

1. OBOR’s connectivity with CPEC is well established and CPEC through its land link with
China and maritime link with the Arabian Sea is indeed a vital component of OBOR.

2. The OBOR Initiative is a grand global strategy of economic development which has no
parallels in human history.

3. The rate of success in CPEC will determine the future course of OBOR Initiative and set
an era of Chinese dominance in international affairs.

4. The accomplishment of CPEC will establish a new model of international development led
by Chinese investment.

5. The China-Pakistan friendship is time tested, therefore, the partner countries presume to
overcome the challenges and achieve the mutual interests associated with the project.

6. The competing powers in the region and beyond may consider it a zero sum game and try
to impede or disrupt the CPEC project.

7. OBOR has the potential to make China a global power.

8. China’s belt-road initiative is not based on aid or even FDI, but on loan financing.

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Recommendations:

Following are some recommendations for future course correction:

1. The development of the Belt and Road Project and CPEC should mainly be conducted
through policy communication and objectives coordination.

2. The Project stakeholders should support the local authorities and general public of
countries along the Belt and Road to explore the historical and cultural heritage of the Belt
and Road.

3. The project should aim towards embracing the vision of a multi-polar world, economic
globalization, cultural diversity and greater IT application.

4. The Belt and Road Initiative and CPEC should keep in line with the purposes and
principles of the UN Charter and WTO (World Trade Organization).

5. The project should uphold the Principles of Peaceful Coexistence and mutual respect for
each other’s sovereignty and territorial integrity.

6. Pakistan and China should tread carefully in the wake of growing Indian and US concerns
over CPEC and OBOR integration.

7. Pakistan should develop a close intelligence sharing and security cooperation- mechanism
with China to counter terrorist threats originating from religious and separatist non-state
actors especially in Baluchistan and Xinjiang Autonomous region.

8. Pakistan should carefully weigh in financial risks involved with CPEC project.

Page 23 of 26
Bibliography:
OBOR:

1. “One belt and one road: connecting China and the world”, a research article
authored by Tian Jinchen, published by McKinsey and Company. Tian Jinchen is the
director of the Western Development Department of China’s National Development
and Reform Commission.

2. “Action plan on the Belt and Road Initiative”, a research publication issued by the
National Development and Reform Commission, Ministry of Foreign Affairs, and
Ministry of Commerce of the People’s Republic of China

CPEC, a component of OBOR:

1. “One Belt and One Road: Impact on China-Pakistan Economic Corridor”, a

research paper authored by Shafei Moiz Hali, Dr. Tan Shukui and Sumera Iqbal,
published by Institute of Strategic Studies Islamabad (ISSI)

2. Research Paper titled “Analysis of Chinese Economic and National Security

Interests in China- Pakistan Economic Corridor (CPEC) under the Framework
of One Belt One Road (OBOR) Initiative” Authored by Saif Ur Rehman and Zhao
Shurong of the School of Political Science and Public Administration, University of
Electronic Science and Technology of China, China and published by Arts and Social
Sciences Journal

3. Wikipedia article titled “China Pakistan Economic Corridor”

4. Research publication Titled “China-Pakistan Economic Corridor” issued by Board

of Investment (BOI) Prime Minister’s Office, Government of Pakistan

From CPEC to OBOR:

1. Op-Ed titled “From CPEC to OBOR” written by Imtiaz Rafi Butt, published by
English Daily Newspaper The Nation on June 02,2017

2. Op-Ed titled “OBOR and CPEC” written by A. Rauf. K. Khattak, published by

English Daily Newspaper DAWN on Aug 24,2016

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References:

OBOR:

1. https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-
insights/one-belt-and-one-road-connecting-china-and-the-world

2. http://english.gov.cn/archive/publications/2015/03/30/content_281475080249035.htm

CPEC, a component of OBOR:

1. http://www.issi.org.pk/wpcontent/uploads/2015/12/Shafei_Moiz_and_Tan_and_Sume
ra_3435_SS_41_20142015.pdf

2. https://www.omicsonline.org/open-access/analysis-of-chinese-economic-and-
national-security-interests-in-chinapakistan-economic-corridor-cpec-under-the-
framework-of-one-be-2151-6200-1000284.php?aid=91492

3. https://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor

4. http://boi.gov.pk/InfoCenter/CPEC.aspx

From CPEC to OBOR:

1. https://nation.com.pk/02-Jun-2017/from-cpec-to-obor

2. https://www.dawn.com/news/1279479

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MAPS:

Figure 1(above): various Silk Routes Figure 2(above): Maritime Silk Road

Figure 3(above): various routes of OBOR Figure 4(above): various routes of CPEC

Figure 5(above): CPEC as component of OBOR

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