Islamabad: China has decided to postpone further expansion of the China-Pakistan Economic Corridor (CPEC), a flagship project of the Belt and Road Initiative, despite Pakistan’s strong appeal. China has cited its own economic woes as the reason for not approving new projects under CPEC. Pakistan had requested China to make large investments in the fields of energy, water management, tourism, and climate change through CPEC, hoping to overcome its economic crisis.
However, according to Pakistani media reports, both countries are facing financial difficulties and have agreed to put major projects on hold. The reports also revealed that there were deep differences between China and Pakistan in the CPEC Joint Committee meeting, where Pakistan had to accept China’s terms on a 300 MW power plant in Gwadar.
Pakistan had initially opposed the power plant, which would use imported coal and cause environmental damage to the port city. Pakistan had proposed to use local coal and relocate the power plant to Thar, or cancel the project altogether. However, due to pressure from China, Pakistan had to withdraw its objections and agree to buy expensive electricity from the power plant.
This is a double blow for Pakistan, which is already facing soaring electricity rates due to the IMF package. Pakistan is also struggling to repay the loans of Chinese power companies, which have invested in several energy projects under CPEC. China has made it clear that it will not provide any financial assistance to Pakistan, but will only pursue its own interests through CPEC.