Tara Kartha

A new buzz in much of Asia is what appears to be a growing competition between the United States and China in gaining influence in Pakistan. In other words, a new Cold War may be right on our doorstep. That was recently apparent in some rather extraordinary events. One was the signing of an Action Plan between China and Pakistan, marking the start – after a delay of five years – of the second phase of the China Pakistan Economic Corridor (CPEC). It has a lot more besides that is clearly a reaction to increased US presence in Pakistan. The latter, for its part, has suddenly upped the ante, what with the arrival of several military aircraft at Nur Khan airbase and relief for Pakistan’s worst floods seen in recent years. This was presaged by a series of events, all of which would have been noted by Beijing.

CPEC 2.0 Comes Into Play

The Action plan is not just to do with the China-Pakistan corridor. The first part, apart from the expected language on ‘iron brothers’ and the usual flowery praise, includes references to ‘global transformations not seen in a century’ and warning that any ‘attempt to disrupt or undermine’ the partnership is ‘bound to fail’. Unsurprisingly, it calls for even closer interaction, with Pakistan fervently declaring Beijing’s partnership as a ‘cornerstone’ of its foreign policy. China doesn’t reciprocate that, but acknowledged Pakistan’s ‘clam approach’ during the recent conflict with India, and then chose to bookmark its various ‘global’ Initiatives – including the most recent ‘Global Civilizational Initiative’ – rather unusually, also including Resolution 2758 (which affirms a one-China policy) in the statement, as Beijing stresses the centrality of the UN. 

The CPEC section emphasises five “corridors” – growth, livelihoods, innovation, green energy, and the ambitious URAAN project, which aims to turn the country into a trillion-dollar economy by 2035 through the usual areas like energy and infra, and, rather mysteriously, “ethics” and “equity”. Backing all this are China’s ‘8 Major steps’ from 2023, aimed at furthering the Belt and Road Initiative (BRI), including “small and beautiful” projects. In other words, Beijing is preparing to spend a little less on massive projects. The Mainline-1, the most expensive of projects at $7 billion, has been sent to a consortium headed by the Asian Development Bank, and others. The core of CPEC-2 is interesting in the background of the ongoing tariff war and Beijing’s historical dependency on food imports. Agriculture has again become the focus, with scientists already at major Pakistan universities and new projects aimed at Gilgit Baltistan. There is also a strong interest in mining projects. Notably, there is a new clause to ‘deepen understanding’ of oil and gas geology in Pakistan. In other words, China wants to examine Trump’s claim of ‘massive oil reserves’ in Pakistan, which Washington is apparently set to explore.

The US Knits Into The Army

The US interest in Pakistan has grown leaps and bounds, as is apparent from Field Marshal and Chief of Army Staff Asim Munir not just having that unprecedented lunch with President Trump but also going on to party with the former Commander, Central command, at his retirement bash. 

What is interesting is that US initiatives are solely engaging the Pakistan army. It’s almost as if the Prime Minister’s Office doesn’t exist. The MoU on strategic minerals has been signed with the Army-run Frontier Works Organisation, the country’s largest entity involved in critical minerals mining. The relief provided by several US military aircraft was at the request of the Pakistan army. And the six C-17 Globemaster III landed at Nur Khan rather than Islamabad, which would have been the obvious choice for the movement of relief aid through the civilian machinery. Nur Khan is the centre of Pakistan’s Air Mobility and plays a key role in logistics. It also operates the C-130s. The base is now under the process of renovation after the punishing strikes by the Indian Air Force during Operation Sindoor. It is possible that the landing of US aircraft here is a signal to India to stay away from the base, since both American aircraft and personnel would be present there. 

Then there is the much-touted deal on cryptocurrency under the aegis of Trump’s family-owned World Liberty Financial, which signed an agreement with Pakistan’s newly minted Crypto Council. Notably, the body started its operations even before the State Bank of Pakistan formally cleared it. Munir personally welcomed the WLF delegation, led by Zachary Witkoff, the son of Steve Witcoff, during the signing ceremony, prompting speculation about potential national security implications. Remember that the larger Strategic Facilitation Council, which is supposed to steer Pakistan’ s investment futures and big business ventures, is entirely army-run.

The Sum Of It All

There is much more in the CPEC-2 two to unnerve India. For instance, Chinese companies are involved in the development of fibre optic networks (already in place, linking Chinese satellite data to Rawalpindi), satellite internet, land and sea cables and transit internet through Pakistan, the Karakorum Highway bypass that will enter close to the Line of Control at Muzzafarbad, and, most significantly, a “China Pakistan Land border Joint Committee” for border management and cooperation. All this is expected from the ‘iron brothers’. 

India’s Many Problems

For India, however, the problem is this: American interest in Pakistan seems to have strongly revived Chinese efforts to enter Pakistan, whether through CPEC or without it. In fact, much of what is envisioned is extensive ingress by Chinese businesses and industry. This is exactly what Pakistan wanted all along, and precisely what it has done for decades. It will now reap the largesse from both powers – or, so it expects to do. But Trump, who in 2018, in his very first tweet as President, had called Pakistan “deceitful”, is unlikely to follow that path. His administration has already stopped USAID, one of the major sources for Pakistan funding. Thus, exploitation of Pakistan’s resources is highly likely, as also inconspicuous US basing of drones and intelligence. All this works out well for the Pakistani army, which will then have a little more space to push back against excessive Chinese demands – for instance, greater Chinese intelligence access and security personnel for the protection of its citizens. 

For India, this is a worst-case scenario. That in itself might give Rawalpindi much satisfaction. In the longer run, however, all this might not be that great for the Field Marshal and his coterie. History has never been kind to dictators, hybrid or otherwise. And, Chinese annoyance will only add another layer of intrigue in what is already a state that fuels and is fuelled by multiple and overlapping layers of covert operations. All this has a price, and someone has to pay it. Hopefully, it won’t be Delhi. But in a disordered world, there’s no telling. Time to up that defence budget.