Development or Colonialism: What China's OBOR Initiative Means for Pakistan

Early last year, former Pakistani Prime Minister Nawaz Sharif traveled to China to negotiate the final details of the Long Term Plan on China-Pakistan Economic Corridor, a plan that began with the construction of the Gwadar port in Balochistan to facilitate the Chinese import of oil from the Persian Gulf. Since the plan’s initial development in 2006, it has grown to become an effective blueprint for the overhaul of Pakistani infrastructure and economic development. The agreement has raised concerns among leading Pakistani economist S Akbar Zaidi, who confirmed that “After OBOR [the One Belt One Road Initiative under CPEC’s umbrella] gets ready, Pakistan will become China’s colony”. Through investments of $62 billion spread over the next decade and a half, Chinese enterprises will eventually grow to monopolize Pakistan’s agricultural and industrial markets while simultaneously increasing imports of cheaper goods and inculcating itself into Pakistani households through active “dissemination of Chinese culture”. To understand the risk of potential colonization caused by the Plan’s successful implementation, it is crucial to examine the social and economic impacts of the negotiations on Pakistan’s economy and population.

The Long-Term Plan mentions agriculture as the gateway to a revitalized Pakistani economy, facilitated by the leasing of land to Chinese enterprises. Agriculture currently constitutes twenty-four percent of Pakistan’s GDP, and employs half of the nation’s labor force directly or indirectly according to the Pakistan Bureau of Statistics. The largest crop within the agricultural sector, rice, stands at a whopping 8.3 per cent of exports. Despite this heavy reliance on agriculture, the plan mentions that “due to lack of cold-chain logistics and processing facilities, 50% of agricultural products go bad during harvesting and transport”, which Chinese enterprises will attempt to redress through investing in storage units across the major cities of Islamabad and Gwadar. Leasing out thousands of acres to Chinese enterprises will also quell the tide of wasted crop, and will allow owners to navigate with autonomy to “establish factories to produce fertilizers, pesticides, vaccines, and feedstuffs” while “imparting advanced breeding techniques to peasant households and farmers by means of land-acquisition by the Government”. The Government also encourages investors to form mutually beneficial relationships with local farmers and to maintain “orderly competition”. However, it enforces no restrictions on maintaining the existing workforce or a minimum employment level. Past precedent indicates Pakistan often cannot compete in orderly competition against cheaper, imported Chinese goods, so the employment of workers in Pakistan’s biggest industry remains a concern.

The problem of competition is concerning, as Chinese competitors undercut the local competition by sacrificing quality. In the textile industry, local reports indicate 100% polyester cloth imported from China has become an increasingly unbeatable cheaper alternative to locally sourced 65% cotton 35% polyester cloth. While consumers understand the cloth is less durable than its Faisalabad alternative, the 30-40% price difference incentivizes them to purchase Chinese material.

This trend carries through various industries including toys, artificial jewelry, and shoe production, where Chinese imports already claim more than half of the market. According to the President of Jama Mall in Karachi, the rising share of Chinese goods in the market is a threat to small and medium-sized businesses. The report mentions continuing to establish a market presence in the small household appliance and mobile industries, where Chinese retail giants like Huwei have already edged national services out of the arena.

Given Pakistan’s employment rate, which has been hovering at around 50% of the last 13 years, a shift of this nature has the potential to reverberate through the entire economy. Half of the nation’s workforce is employed in agriculture in some regard and it feeds the “entire rural and urban population”. In addition to granting a foreign power full control of the nation’s food supply, Chinese entrance and domination of the market thus also risks plunging employment rates,

The plan also focuses heavily on industry and divides Pakistan into three Special Economic Zones based on export good. Mineral extraction, production of household appliances, and the entire auto industry are open for investment with the same lax regulations as the agricultural industry. Investing in Pakistan’s largely untapped natural resources allows foreign investors (particularly large ones) the opportunity to directly control exports- and to effectively control Pakistan’s economy. Even more dangerous than the risk of purposeful manipulation by foreign officials is the plan’s provision regarding surveillance and the “dissemination of Chinese culture”.

Under the title “The Safe Cities Project”, the Chinese government will establish twenty-four hour surveillance in major cities on “major roads, case-prone areas and crowded places” as well as “urban areas”. The objective of this system is to protect citizens but fails to mention anything beyond monitoring to diffuse potential threats. Plans for the monitoring end nearly immediately after they begin, and do not include information about those viewing the films, their distribution, or their possible use as a tool to indiscriminately monitor Pakistani citizens. The language of the Plan continues to grow more confusing when discussing plans for future Chinese cultural influence in Pakistan, merely mentioning establishing a fibreoptic framework for broadcast television that would be “beneficial to disseminating Chinese culture in Pakistan, further enhancing mutual understanding between the two peoples and the traditional friendship between the two countries.” Dissemination is not reciprocated, and nothing further is mentioned in the 231-page document about the execution of this plan. The ambiguity surrounding the Long Term Plan’s provisions have caught the attention of Pakistan’s population, who are approaching Chinese influence with a degree of caution.

The unprecedented control Pakistani officials are prepared to allow Chinese investors is dangerous, according to S Akbar Zaidi, because “the CPEC initiative is the most discussed but the least transparent among all the foreign initiatives in Pakistan.” His sentiment is echoed by data from the Journal of Applied Sciences, which notes that a sample survey of college students reveled 46.6% had “a normal understanding of the China-Pakistan economic corridor” while 15.5% claimed little understanding. The language “normal understanding” is particularly meaningless in this setting, where the Pakistani government continues to confuse the plan’s explicit provisions to the public and denounces he media’s interpretation of the Plan while offering no supplementary material of their own[1].  The study additionally notes the Plan “has not been popularized in the public or not been paid enough attention by the public”[2]. Public understanding of the Plan is very rudimentary, and many only begin to feel the ramifications of implementation in a decade, when Chinese private investment has come to exert influence over nearly every industry and will cut costs so prohibitively burgeoning Pakistani enterprises won’t stand a chance. While referring to the investments as colonization may be hyperbolic of Zaidi, Chinese investments controlling the means of production and creating massive economies of scope within Pakistan coupled with command of the underlying fibreoptic structure supporting the national circulation of news is undoubtedly cause for concern. Particularly for Pakistan, which has been riddled by “the influence of US imperialism, then allowed unusual degree of Saudi intrusion in domestic, cultural and social affairs”, the Chinese investment considers a dangerous risk into 21st century colonialism.