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In the last week of May, the Afghan Taliban accused Pakistan of creating distrust between Kabul and Beijing, a reaction to a Pakistani report that blamed the killing of five Chinese nationals and their local driver in a March suicide attack in the northwestern province of Khyber Pakhtunkhwa (KPK) on terrorists based in Afghanistan. For the past two years, Pakistan has consistently blamed the Afghan Taliban’s inability and/or unwillingness to eliminate anti-Pakistan terror and militant groups as the core reason for the post-August-2021 surge in terrorism in Pakistan. But the Taliban’s chief spokesperson, ZabihullahMujahid, once again rejected the findings of Pakistan’s investigation, calling it “illogical.”

The blame game – which inevitably involves China too – reflects the ongoing collapse of what was not very long ago seen as the ‘China-Pakistan-Afghanistan’ triangle – a sort of alliance that was supposed to see the US$62 billion China-Pakistan-Economic Corridor (CPEC), a 3,000-km network of roads, ports and other infrastructure that is one of the capstones of China’s vaunted Belt and Road initiative, expanding to include Afghanistan, connecting with Iran, and going into Europe via Turkey.

The euphoria of progress has disappeared and been replaced by regular cross-border skirmishes between Pakistan’s and Afghanistan’s border forces, followed by frequent border closures.

Since this unstable security environment regularly affects CPEC projects too, it has directly dampened the multi-billion-dollar project. Certainly, Pakistan’s internal economic failures have made a major contribution to the failure of CPEC, but that is being reinforced by terror attacks that have led China to push Pakistan, to ensure internal security on several occasions.

That has led to serious delays in various CPEC projects. For example, of 21 electricity generation projects, only 14 have been completed. Yet even this additional electricity generation hasn’t translated into tangible benefit for Pakistan’s economy. Load-shedding remains a key problem across various parts of the country. Pakistan’s current capacity stands above 40,000 megawatts against demand of only 30,000 to 32,000 megawatts, but this enhanced production is unable to make any difference due to the severe shortage of transmission lines.

In addition, according to the CPEC’s master plan, nine Special Economic Zones were to be built, but none has been completed thus far. While the USS$1 billion Gwadar Port has been built, it continues to fail to attract any regularly scheduled deep-sea shipping lines. Because no cargo comes, it fails to generate enough revenue for the Chinese, who have been in control of the port since 2013. Silting is a pernicious problem. Making matters worse, regular attacks by Baloch separatists have confined Chinese nationals to the inside of the security walls of the port. While China blames Pakistan for the mess, Islamabad blames the return of the Afghan Taliban to power.

Since Islamabad doesn’t blame its own macro-economic failures for the overall failure of the CPEC, it has moved its guns towards Kabul. In addition to launching strikes on terrorist hideouts in Afghanistan, Pakistan recently expelled several hundred thousand Afghan refugees to punish Kabul for its failure to control militant groups like The Tehrik-i-Taliban Pakistan (TTP). Third, for the past year or so, Islamabad has been actively using diplomacy to put pressure on Kabul.

That has two major aspects. First, it involves direct diplomatic engagement with the Taliban, including regular visits by Pakistan’s diplomatic and security officials to Kabul. Second, because the first strategy hasn’t worked, Pakistan has been trying to convince Beijing that only the Afghan Taliban are to be blamed for the killings of Chinese nationals and/or attacks on CPEC projects, including those on Gwadar.

In fact, ‘informing’ the Chinese government about this state of affairs is one key task of Prime Minister Shahbaz Sharif’s ongoing visit to China (from June 4 to June 9). Although the official purpose is to kickstart ‘CPEC 2.0’ – as if ‘CPEC 1.0’ has been a major success – part of this politics of reviving the program is not to actually revive the program itself but, as I have learnt from reliable Pakistani diplomatic sources, to restructure debts to satisfy the International Monetary Fund’s pre-conditions for approving another loan facility. (Pakistan currently owes more than US$30 billion to China.) Otherwise, as far as the question of reviving the CPEC is concerned, Pakistan has been trying to accomplish this task for at least two years. When Shahbaz Sharif first visited China in his last tenure in November 2022, “CPEC revitalization” was the objective. Nothing substantial happened.

Can this “revival” happen? The ongoing tussle between Pakistan and Afghanistan due to the massive surge of anti-Pakistan and anti-China terror activity is one major hurdle. But, more importantly, even China appears to be losing interest – not only because of the security issues but also because of Pakistan’s failure to play its part due to its failure to manage its economy. Chinese officials have been privately pushing Pakistan to better manage this situation. A key cause of concern for Beijing is not the economic situation itself but how this situation has led Pakistan to go to the IMF time and again and how the IMF continues to push Pakistan to re-negotiate CPEC contracts and/or the terms of the loans that are due to mature in the near future. For Beijing, the fact that CPEC comes under regular IMF scrutiny brings unnecessary focus on China internationally, as news of CPEC being a ‘debt trap’ and a massive failure challenges China’s overall narrative of BRI being a “win-win”.

A second major reason why China is no longer keenly interested in CPEC – and this lack of interest is evident from the lip service that Chinese officials and state media now seem to be paying to this program – is China’s growing interest elsewhere: in mining for green tech.

A recent BBC report said that there are at least 62 mining projects across the world in which Chinese companies are involved. While many of these projects, which are designed to extract lithium, cobalt, nickel, and manganese, are already part of the BRI, this increasing shift towards green tech products is part of the larger global trend – read China-US competition – to dominate the ‘green economy’ because of its current and future potential. The UN says that if the world is to reach net-zero greenhouse gas emissions by 2050, their use must increase six-fold by 2040.

China aims to dominate this economic transition, which seems to have led Beijing to pay less attention to – and divest investment from – BRI projects such as CPEC that aren’t yielding sufficient economic benefit. This is one key reason why mega-projects, such as ML-1 of CEPC, which otherwise was meant to build Pakistan’s largest railway track from Karachi to Peshawar, have almost been abandoned. A key contributing reason is the unavailability of funds (US$ 6.7 billion) and China’s refusal to fund it, even via a loan.

However, due to reasons that can best be attributed to regional geopolitics, China continues to engage with Pakistan, offering occasional support for CPEC narratives and/or rolling over matured loans to avoid Pakistan collapsing completely and/or falling squarely in the US nexus.

The collapse of CPEC has killed all talk of ‘CPEC Plus’ including Afghanistan. It has left an impact on the Taliban too. Even though China granted partial recognition, receiving the Taliban’s envoy, that has yet to translate into active investment. In addition, the Chinese are well aware of the terror problem, with Beijing on record of asking the Taliban to tackle this problem to earn full recognition to develop meaningful economic ties. For now, however, it is not working.

Dr. Salman Rafi Sheikh is an Assistant Professor of Politics at the Lahore University of Management Sciences (LUMS). He holds a Ph.D. in Politics and International Studies from SOAS, University of London. He is a longtime regular contributor to Asia Sentinel.

This article was originally published on Asia Sentinel.
Views in this article are author’s own and do not necessarily reflect CGS policy.