Despite vast majority of CPEC projects are BOT (Build- operate- transfers) types and they are investment in nature as opposed to debt, we continue to see news like this saying China demands massive repayment.
This whole debt trap story has been going on for a while and has formed a logical flow without any substance. However, any rational person would wonder in the first place why would China want to choke the country who has the best relationship with into debt. How does this kind of low play fits into China’s strategic plan and its tangible format BRI. The simple answer is not at all. If China is only a rent seeker, it would have achieved so much development in such short period. Its strategic intention is clearly more than that.
What China is hoping to achieve is to help Pakistan to catch up speed with China in terms of economic development. Simple as that. The 2 phases of CPEC is merely the formula that China has tried and found successful in China in the 80s and 90s and it is keen to apply it to Pakistan. Starting from building infrastructure, attach manufacturing industry mostly in textiles industries, the industry generates jobs and government revenue, which allows for more infrastructure investment and demand for goods and products. The demand creates more industries and economy growth. Growing economy means raising wages and better living standards, it also means higher materials and land price. Industry will then be gradually upgraded from low value to high value added ones.
The whole idea of CPEC and BRI in general is to develop the economy of friendly developing countries so that together we can generate more demand and economical activities. The massive internal demand from a prosperous and gigantic market of 1.5-2 billion people will provide the “energy” that we can take our economies to the next level. China can certainly do this itself with its internal market of 13 billion people but it is keen to include its friendly countries like Pakistan.
From the point of view of “developed” world, everything seems to be stable and in status quo. But from Chinese point of view, everything is changing rapidly and we are in this great journey of transformation. We both at national and personal level are keen to bring Pakistani people to this journey with us so we can become industrialized and prosperous nations.