Pakistan is to “think through” Chinese investments related to the Belt and Road Initiative, including projects along the China-Pakistan Economic Corridor (CPEC), a senior government official has said.
According to the Financial Times, the projects under review include the expansion of the Gwadar port, road and rail links, and US$30 billion worth of power plants.
Islamabad also aims to renegotiate a decade-old trade agreement that it claims benefits Chinese companies unfairly, the FT reports.
“The previous government did a bad job negotiating with China on CPEC,” Pakistan’s Member of Cabinet for Commerce, Textiles and Industry, Abdul Razak Dawood, said.
“They didn’t do their homework correctly and didn’t negotiate correctly so they gave away a lot.”
Recently-elected Prime Minister Imran Khan has established a nine-member committee to evaluate CPEC projects, which form a crucial component of China’s Belt and Road Initiative (BRI).
The committee meets for the first time this week, and will enable Pakistan to “think through CPEC – all the benefits and all the liabilities,” Mr Dawood, who sits on the committee, said.
The development has drawn comparisons with other countries which have recently signaled an intention to review BRI investments, including Myanmar, Sri Lanka and Malaysia.
However, Prime Minister Khan has emphasised the importance of China to Pakistan, describing the friendship between the two countries as the “cornerstone of Pakistan’s foreign policy,” as reported by New Delhi Television.
Unlike Malaysia, which has cancelled projects indefinitely, Pakistan’s CPEC rethink is being presented as a delay. Advisors have already suggested the idea of putting all projects on hold for around a year, so the new government can establish itself and work on tackling Pakistan’s huge economic problems.
Extending the terms of the CPEC loans and developing projects over a longer timeframe are also options under consideration.
China, which lent Imran Khan’s new government US$2 billion last month, has sought to downplay negative implications of its investments in Pakistan. On a visit to the country over the weekend, Chinese Premier Li Keqiang told reporters that “CPEC has not inflicted a debt burden on Pakistan.”
“When these projects get completed and enter into operation, they will unleash huge economic benefits.”