Issue Brief on “CPEC and China-US War of Words”

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An extraordinary three-way exchange between China, Pakistan and the United States has taken place on China-Pakistan Economic Corridor (CPEC) during the third week of November, 2019. It has been a direct China-US war of words with each side highlighting strengths of its economic support to developing countries, and development model. Pakistan, meanwhile, has put forward facts related to CPEC and reiterated that the project remains open to participation from third-countries and foreign companies.

First, Ms. Alice Wells, Principal Deputy Assistant Secretary Bureau of South and Central Asian Affairs, criticized extensive Chinese economic cooperation under the CPEC framework, with Pakistan highlighting risks of debt trap and absence of transparency in projects awarded to Chinese-state owned enterprises.[1] She directly referred to “expensive” proposed costs of up-gradation of Pakistan’s main railway line from Karachi to Peshawar project (ML-I) and recently completed Sukkur-Multan Motorway (M-5). She contrasted Chinese mode of investment through state-owned companies with the US business model of promoting trade and investment through private companies with technology transfer to developing countries. For Ms. Wells, the debate over models of development is really about “sovereignty and the freedom that nations can expect” and the US calls for a development framework rooted in “good governance, long term capacity building, and market policies”. Ms. Wells remarks are a potential signal to Islamabad to adopt a go-slow policy on CPEC.

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