Stop breaking local laws, Chinese think tank tells CPEC builders in Pakistan

A think tank in China has warned Chinese firms working on the ambitious China-Pakistan Economic Corridor (CPEC) to beware of complex local politics and corruption, and to plan projects carefully to avoid wasting the opportunity for economic development.

Senior researchers also said Chinese companies had broken laws and violated social norms, which “damaged the reputation of the Chinese people”.

The researchers, Zhou Rong and Chen Xiaochen of the Chongyang Institute for Financial Studies (CIFS) at Renmin University of China, found that construction so far has been “unexpectedly fast” in the main elements of the corridor, which creates a transport and industrial link from western China south through Pakistan to Gwadar Port on the Arabian Sea (pictured).

Those elements included energy, transport infrastructure, industrial developments and Gwadar Port itself.

But they warn that the scheme, with its estimated investment volume lately having risen to $62bn, “still faces plenty of internal and external difficulties, and the rapid progress of its construction has led to eagerness for instant success”.

“Pakistan`s domestic situation is extremely complex,” they wrote.

“Sometimes, conflicts can be intertwined. In the face of the huge benefits of the CPEC, miscellaneous political forces all want to have a finger in the pie, which makes the original contradictions even more intensified.”

The researchers also warn of corruption. “Some decision-makers involved in construction of the corridor have little interest in project construction but great interest in personal gain, ignoring the social benefits of the project,” they said.

Chinese enterprises in Pakistan can be too fond of instant success at the expense of good, long-term plans, the researchers observed, while others are heading for outright conflict.

“Several Chinese enterprises have violated Pakistan’s laws and local social customs, which badly damaged the reputation of the Chinese people,” said Zhou and Chen.

To solve these problems, Chinese firms should learn from China’s own experience in developing its own “backward areas”.

Needed, they said, was “a step-by-step introduction of China’s poverty alleviation experience in undeveloped provinces and a plan to help Pakistan to develop its more remote regions”.

They concluded: “In Pakistan, it is unrealistic to expect to eliminate corruption completely, but we hope it can be constrained as much as possible. In addition, political, environmental and security risks should be minimized by persuading the central government to take care of the interests of all parties.”

Image: Aerial view of Pakistan’s Gwadar Port on the Arabian Sea, southern terminus of the $62bn China-Pakistan Economic Corridor (Bjoertvedt/Creative Commons)