The strategic alliance between Pakistan and China, driven largely by opportunism and geostrategic interests, seems unshakable. However, the extent of its mutual benefit remains under scrutiny, especially for Islamabad, whose reliance on Beijing continues to deepen. Although China claims to base its foreign policy interactions on five key principles — respect for sovereignty, non-aggression, non-interference, equality and mutual benefit, and peaceful coexistence — its dealings with Pakistan indicate an unequal power dynamic that primarily serves its own interests. This imbalance in the Pakistan-China strategic alliance has led to a situation in which Islamabad’s autonomy is increasingly curtailed, and its vulnerability to Beijing’s influence is becoming more apparent.
China’s economic penetration and Pakistan’s eroding autonomy
Recent engagements between the two countries underscore the paradox of their partnership, where the pursuit of mutual gains has instead evolved into a zero-sum game. Under the umbrella of partnership, China has deeply penetrated Pakistan’s economic, infrastructure, energy, and security sectors, leaving Pakistan with limited space to make independent choices. The cornerstone of the bilateral relationship is the $65 billion China-Pakistan Economic Corridor (CPEC), a major part of China’s $1 trillion investment in the Belt and Road Initiative (BRI), which has attracted participation from more than 140 countries across Asia, Africa, Latin America, and beyond since its launch in 2013. While CPEC has solidified Pakistan’s position as a key strategic partner for China, it has come at the cost of the former’s strategic autonomy, placing it in a more dependent role. Although Islamabad aims to follow Beijing’s development path, the practical difficulties of maintaining this trajectory have proven overwhelming. As China continues pouring investments into Pakistan, the country finds itself sinking deeper into a debt trap, struggling to repay existing loans while seeking new ones.
Pakistan recently secured a 37-month, $7 billion International Monetary Fund (IMF) bailout package to avoid bankruptcy, as it faces $90 billion in debt repayments over the next three years, a significant portion of which are owed to China. Pakistan managed to obtain the IMF loan only through debt rollovers from friendly nations, including China, from which it has requested a five-year repayment extension on several loans. This raises concerns about Pakistan’s credibility as a reliable business partner, as repayment in the near future seems unlikely. Despite these financial risks, China continues to invest, signaling that, contrary to its official claims of fostering regional development through economic integration, its focus may be more on expanding its geostrategic influence.
The financial risks of CPEC investments
During the first phase of CPEC, the two countries completed 38 projects worth $25.2 billion, with much of the funding coming from high-interest (3.7%) loans from China. Currently, Pakistan’s debt to China stands at $26.6 billion, including $16 billion in the energy sector — more than it owes to any other country. According to the World Bank’s latest International Debt Report 2023, more than 72% of Pakistan’s external bilateral debt is owed to China. Despite this, 26 CPEC projects valued at $26.8 billion are in the pipeline, and Pakistan plans to propose 41 more projects to the Chinese prime minister under CPEC Phase II. These proposals span areas such as infrastructure development, road connectivity, information technology (IT), agriculture, industrial cooperation, education, healthcare, water resources, energy, and artificial intelligence (AI), suggesting further borrowing in the second phase. However, both the Pakistani and Chinese governments have dismissed criticism that CPEC is creating a debt trap, calling it misguided Western propaganda. Still, Pakistan’s fragile economy, mounting foreign debt, and slow progress on sustainable development challenge the narrative of CPEC as a “win-win” initiative
Security challenges and China’s expanding role
China views the challenges and delays in realizing CPEC as largely due to political instability and rising insecurity in Pakistan, which have cost both Chinese lives and investments. Since 2016, attacks on CPEC projects have resulted in the death or injury of more than 60 Chinese workers. These attacks have disrupted project timelines, inflated costs, and incurred compensation payments exceeding $14 million.
Historically, China has relied on host governments to protect its interests, but as its global economic footprint expands, Beijing is increasingly willing to take on a more proactive role as a security provider, not just a development actor, to safeguard its overseas interests. This shift has led to the integration of the BRI into China’s Global Security Initiative, positioning China as a global security leader where security cooperation and defense ties are prioritized over economic development.
China has emphasized to Pakistan that a stable and secure environment is a prerequisite for the successful implementation of CPEC. As a result, Beijing has pressed Islamabad to enforce the Global Security Initiative, which focuses on defeating efforts to disrupt their cooperation by safeguarding Chinese workers and investments. This includes strengthening counter-terrorism cooperation, improving cross-border management, and combating arms and drug smuggling. Last month, in a high-level meeting, both countries agreed to conduct joint police and paramilitary exercises in Gilgit-Baltistan or Xinjiang and to train Gilgit-Baltistan police officers at the Xinjiang Police Academy.
Joint security initiatives and the future of Pakistan-China relations
Pakistan shares a 600-km-long border with Xinjiang, a region vital to CPEC, and a security concern for China due to the presence of Uyghur separatist groups, such as the East Turkestan Islamic Movement, some members of which have reportedly found safe haven in Gilgit-Baltistan. Through these joint police operations, China aims to address security threats from Uyghur Islamist separatists on the Pakistani side of the border, which is seen as a precursor to expanding China’s security presence in Pakistan. This may result in Chinese security personnel operating in Khyber Pakhtunkhwa and Balochistan, where Chinese investments and personnel are frequently targeted by Baloch separatists, under joint security arrangements. Reports suggest that China and Pakistan are close to signing an agreement to establish joint security companies, allowing Chinese security personnel to protect Chinese projects and workers in Pakistan. In the past, Pakistan has rejected Chinese proposals for joint security ventures, and the limited number of Chinese private security companies (PSCs) operating in the country face strict regulations, such as the requirement to use local personnel for security tasks in compliance with Pakistani laws. Pakistan’s military maintains a substantial security force of over 10,000 soldiers, including the 34th Light Infantry Division (established in 2016) and the 44th Light Infantry Division (established in 2020), to protect Chinese workers and to safeguard CPEC projects. This security force is supplemented by other law enforcement agencies. However, recent incidents may prompt Beijing to push for easing restrictions on Chinese PSCs operating in Pakistan.
The proposed security mechanism would function in two tiers: Chinese personnel would manage the inner security grid, while Pakistani forces would oversee the outer grid. There has also been speculation that Beijing has asked Islamabad for a military base at Gwadar Port in Balochistan to protect its interests, though Pakistan’s foreign office has denied these claims. What is known, however, is that China has made future investments in Pakistan contingent on improved security and stronger counter-terrorism cooperation. Recently, Pakistan approved an additional budget of PKR 45 billion ($162 million) for its armed forces, primarily to protect Chinese interests and enhance border security. This marks the second major supplementary defense grant in 2024, following an earlier approval of PKR 60 billion ($218 million) for Operation Azm-e-Istehkam, a counter-terrorism operation aimed at eliminating terrorist threats and dismantling extremist networks. These allocations come in addition to Pakistan’s already substantial defense budget of PKR 2.13 trillion ($7.64 billion), a 14.5% increase from the previous year.
This increase in Pakistan’s defense budget is advantageous for China, given their robust defense partnership. China is Pakistan’s primary supplier of military hardware, including aircraft, submarines, tanks, and missiles. Between 2019 and 2023, 82% of Pakistan’s arms imports came from China, making it one of the largest recipients of Chinese weaponry. This defense trade generates significant revenue for Chinese manufacturers and strengthens long-term military ties between the two nations.
China’s military support enhances Pakistan’s capabilities, making Islamabad a key strategic ally in South Asia, where India’s influence is rising. For Beijing, Pakistan’s military strength helps counterbalance India’s dominance, aligning with China’s broader regional interests. However, if Pakistan fails to provide adequate security for Chinese projects, Beijing’s strategic patience may run thin. China may seek a more direct security presence in Pakistan, potentially through the proposed military base in Gwadar. The strategic value of Gwadar aligns with China’s maritime ambitions in the Indian Ocean, aimed at counterbalancing the US-India alliance. Currently, China manages operations at seven South Asian ports and 17 across the Indian Ocean, which could serve both its security and commercial purposes. With a naval fleet of 370 warships, projected to grow to 435 by 2030, and advanced Type 096 nuclear submarines, China could leverage Gwadar Port for dual roles — a proposal that Pakistan might find difficult to resist due to its strategic reliance on China. The economic value of Gwadar Port is hard to justify without considering military use — a natural deep-water facility with the potential to shorten trade routes, the port is vastly underutilized and has not generated much income for Pakistan or for the Chinese state-owned company that runs it. A $1.6 billion expansion planned since 2015 has not materialized, and the port is located in an area subject to frequent attacks by militants.
Consequences
CPEC’s ambitious goals have largely fallen short, exacerbating Pakistan’s security and economic challenges, with Gwadar Port serving as a prime example of this failure. If Pakistan cannot protect Chinese workers and projects, it risks losing control over its own security governance. China, which has already shifted its focus from economic expansion under the BRI to a more security-driven approach through its Global Security Initiative, may increase its security involvement in Pakistan. Though China has not yet formalized overseas military deployments or bilateral security agreements under this initiative, it has begun using BRI-related port facilities for military purposes, as evidenced by the opening of its naval base in Djibouti in 2017.There is no agreement between China and Pakistan that explicitly states whether China will or will not pursue a similar security strategy in Pakistan in the near future; however, the signs indicate that it may. The ongoing security and economic challenges only intensify Pakistan’s vulnerability to China. If this situation remains unchanged, Pakistan may be compelled to concede to Chinese interests to stave off a looming debt trap crisis, potentially offering military access in exchange for crucial economic and military assistance.
The question remains whether Pakistan’s civil-military elites will acknowledge this changing reality or continue to deny the inevitable shift in its foreign policy autonomy. With the stakes so high, the need for clarity and decisive action has never been more critical. Pakistan stands at a crossroads, and its choices now will shape its future role in an increasingly polarized world.
Naad-e-Ali Sulehria is Research Assistant to Dr. Marvin G. Weinbaum, Director for Pakistan and Afghanistan Studies at the Middle East Institute. He has over five years of involvement working with international organizations and think tanks in different capacities as a political researcher, policy advisor, peace strategist, and human rights practitioner with a demonstrated interest and experience in human and national security, democratization, conflict resolution, and political culture.
Photo by Ahmad Kamal/Xinhua via Getty Images
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