This case study of Gwadar port, part of a series on China’s Indian Ocean “strategic strongpoints” (战略支点), reveals that while Gwadar may one day serve as a major platform for China’s economic, diplomatic, and military interactions across the region, as of August 2020 it remains largely underdeveloped and underutilized.
The China-Pakistan Economic Corridor (CPEC), a flagship of China’s Belt and Road Initiative (BRI) that was officially launched in April 2015, promised transformational gains. Five years later, a quarter of announced projects have been completed, energy projects dominate, and industrialization efforts are lagging, according to data collected by the CSIS Reconnecting Asia Project.
This spring, when the International Monetary Fund approved a $6 billion bailout for Pakistan, an invaluable opportunity was missed to push for greater transparency of China’s Belt and Road Initiative by not requiring project contracts for the China-Pakistan Economic Corridor—a significant source of Pakistan’s debt—to be made public.
Supporters of the China-Pakistan Economic Corridor have long argued that the initiative would spur development and improve Pakistan’s macroeconomic fortunes. As Pakistan faces its thirteenth IMF bailout in the last thirty years, it is clear that without serious reforms, the debt incurred to fund CPEC could do more economic harm than good.
Even as Huawei faces resistance in Western airwaves, it is racing ahead under the world’s seas in a commercial contest that could eventually provide China with strategic advantages.