Roadblock in friendship? Pakistan 'stunned', as China stops funding for 3 CPEC projects, says report

Pakistan was left 'stunned' at a recent high-level meeting over the China-Pakistan Economic Corridor (CPEC), after China informed it that it has decided to stop funding three road projects that are part of the much-touted corridor, a leading Pakistani daily has reported. 

The Dawn newspaper has reported that China said it was stopping the funding to wait for new procedural guidelines to be released by Beijing. Pakistani officials were told at the same sitting that the Chinese leadership is disturbed by news reports over corruption in CPEC projects, and that this was among the reasons China had decided to stop the funding. 

China's revelation came at the Joint Working Group (JWG) meeting held on November 20. Pakistani officials had gone into the meeting expecting to finalise the funding the funding for the projects, but were instead given a shock, the report said.

"Pakistan was informed in the meeting that 'new guidelines' will be issued from Beijing under which new modus operandi for release of the funds will be described," the Dawn report read.

When the meetings took place, most attention had been focussed on Pakistan's refusal to allow trade in renminbi, the formal name for the Chinese currency, at the Gwadar Port. That refusal had come on the heels of Pakistan's thumbs down to Chinese funding for a dam project in Pakistan-occupied Kashmir.

Whether China's decision to stop funding for the three road projects was retribution is anyone's guess.

The larger point of concern for the Pakistanis however is that changes to procedure could mean other CPEC projects are affected as well.

CPEC has been sold to the Pakistani people as a magic wand solution to developomental problems. It has been rationalised as a close cooperation between 'all-weather friends'. However, this narrative of Chinese altruism and mutual benefit has come under increasing strain.

The three road projects had been part of the Pakistan federal government's own development plan. They had been brought under the CPEC umbrella only in December 2016. The funding for the three projects had been approved at the 6th JCC meeting held at the end of December last year, pending procedural formalities.

While two of the projects were local connectivity projects, one is 136-km the final part of the Karakarom Highway (KKH) from Raikot to Thakot. Before, CPEC, the Karakoram Highway had for decades been the crown jewel of the Pakistan-China axis. China had lost patience and completed the Pakistani portion of the road after a number of delays and failures from the Pakistani agencies.