Despite worsening militancy in Pakistan, China will almost certainly continue its investment projects in the country to secure its strategic interests. But Pakistan’s economic pressures and intensifying violence will prompt further delays to these projects’ completion and exacerbate tensions between Islamabad and Beijing. On Aug. 13, the Majeed Brigade, a unit within the separatist Baloch Liberation Army specializing in suicide attacks, claimed responsibility for an attack involving firearms and explosives that targeted a guarded convoy of Chinese engineers working on the Gwadar Port project in Pakistan’s southwestern province of Balochistan. Amid the reported use of bulletproof vehicles, no Chinese casualties were reported in the attack, which the Chinese foreign ministry subsequently condemned, reiterating long-standing pleas for Pakistan to ”severely punish the perpetrators and take measures to ensure the personal safety of Chinese citizens.” The attack came as China and Pakistan in recent weeks have commemorated the ten-year anniversary of the China-Pakistan Economic Corridor (CPEC) amid a spate of other high-profile militant attacks. Most significantly, just hours before Chinese Vice Premier He Lifeng was scheduled to land in Islamabad on July 30 to discuss the second phase of CPEC, an Islamic State Khorasan Province suicide bomber targeted a rally for the religious political party Jamiat Ulema-i-Islam Fazl in the Bajur district of Pakistan’s northwest province of Khyber Pakhtunkhwa, killing at least 63 people and wounding 123 others. While Pakistan has faced a persistent militant threat for years, attacks have intensified since the Taliban’s takeover of Afghanistan in August 2021, and have increasingly targeted Chinese nationals and investment projects alongside Pakistani security forces. Such attacks, in combination with Pakistan’s persistent economic challenges, have long constrained CPEC’s progress and are poised to only worsen in the coming years.

• According to the Pakistan Institute for Peace Studies, Pakistan in 2020 experienced 146 attacks that killed a total of 220 people and injured 547 others. The country subsequently saw worsening violence in 2021, with 207 attacks that killed 335 people and injured 555 others, and again in 2022, which recorded 262 attacks that killed 419 people and injured 734 others.
• Militant attacks have only further increased in 2023. According to the Pakistan Institute for Conflict and Security Studies, Pakistan has already experienced 271 attacks, which have killed and wounded 780 people through the first six months of 2023.

Shortly after its unveiling, CPEC became the flagship of China’s Belt and Road Initiative (BRI) to expand its trade networks, while reportedly helping to improve Pakistan’s long-challenged infrastructure and creating hundreds of thousands of jobs. While CPEC was initially introduced during then-Chinese Premier Li Keqiang’s May 2013 visit to Pakistan, the project did not officially begin until the signing of formal agreements in 2015. China has committed tens of billions of dollars to CPEC, helping it gain the distinction of being the crown jewel of President Xi Jinping’s BRI, which is intended to expand China’s trade networks primarily through building infrastructure projects in the Global South. China has sought to use CPEC to strengthen its relations with Pakistan and grant it access to Pakistan’s ports (which would improve China’s access to the Indian Ocean more broadly and potentially reduce the country’s dependence on the Malacca Strait, where 70-80% of China’s oil imports are shipped through). Pakistan, on the other hand, has sought to comprehensively develop its dilapidated infrastructure in hopes of benefitting its broader economy, in addition to strengthening its bilateral relationship and economic links with China, an important strategic partner. The first phase of CPEC, which has focused on energy and transportation infrastructure, was initially valued at around $45 billion but has since increased to $65 billion. In July 2023, Pakistani Planning Minister Ahsan Iqbal stated some $25 billion in projects have been completed, and Pakistani government data credits the initiative with adding 8,000 megawatts of electricity to the national grid, building more than 1,400 kilometers of roads and creating more than 200,000 jobs. 

Despite its initial promise, Pakistan’s economic problems have delayed Chinese investment projects and constrained CPEC’s capacity to boost Pakistan’s economic growth. Pakistan’s long-standing unwillingness to implement structural economic reforms has contributed to a growing, unsustainable debt burden that has challenged its ability to pay for Chinese investment projects and loans. These same projects and loans have themselves also worsened Pakistan’s debt crisis (with some 30% of the country’s more than $100 billion of external debt owed to China alone), helping constrain CPEC’s ability to improve Pakistan’s economy. Additionally, while the construction of additional energy infrastructure under CPEC has reduced power shortages in Pakistan, it has not improved the reliability of energy infrastructure enough to accelerate other investment projects or substantially boost economic growth. Pakistan’s economic challenges were driving the country toward potential default in 2023 before the International Monetary Fund provided temporary relief, approving a nine-month $3 billion Stand-By Arrangement for the country in July. 

• Pakistani and Chinese officials rarely discuss details of CPEC delays publicly; however, media reports have highlighted such discussions in bilateral meetings. For example, according to the Pakistani news outlet The Express Tribune, Pakistani and Chinese officials discussed ”missed opportunities” and ”prolonged delays” at CPEC’s 11th Joint Cooperation Committee in October 2022. Pakistan’s planning minister reportedly urged China to accelerate five CPEC projects worth about $18.5 billion, amid concern delays would likely lead to the ”collapse” of the Mainline-1 railway project and prolong adding an additional 3,100 megawatts of electricity to the country’s power grid. At least one Pakistani official reportedly cited ”obstacles from both sides” for driving the delays.

Meanwhile, increasing militant attacks in Pakistan have further threatened Chinese investment projects, as well as the lives of Chinese nationals in the country. In recent years, ethnic Baloch separatists have intensified their attacks on Pakistani security forces and against Chinese nationals and investment projects, aggrieved at what separatists see as Chinese exploitation of Baloch land and resources. These attacks have mainly been conducted in Balochistan and Sindh provinces, where a number of Chinese investment projects are based. Attacks have only worsened over the past year as the Islamist extremist Tehreek-e-Taliban Pakistan — an anti-Pakistan militant group based in eastern Afghanistan — has deepened its ties with Baloch separatists, driven by mutual interests in challenging the Pakistani state. This has prompted both increasingly frequent but also deadlier attacks like suicide attacks — a tactic more commonly used by Islamist extremists that Baloch separatists had until recently largely renounced. Besides prompting disruptions to Chinese investment projects, increasing attacks have forced Pakistan to dedicate greater resources to securing Chinese projects and nationals, and prompted more stringent constraints on Chinese nationals’ movements. In April, security forces in Karachi temporarily shuttered some local businesses that were run or frequented by Chinese nationals amid concerns for their safety, with one unnamed local official reportedly stating the businesses had ”failed to implement security protocols” and would be closed ”until satisfactory security arrangements are made.” Security concerns have also disrupted China’s diplomatic activities in Pakistan; the Chinese Embassy in Islamabad, for example, temporarily closed its Consular Service Hall on Feb. 16, just days after the Chinese government advised its nationals in Pakistan to exercise increased caution amid a worsening security situation. While China officially cited unnamed ”technical issues” in explaining the embassy’s closure, the timing of the move prompted widespread speculation that it was triggered by heightening security concerns. 

• Militant attacks in Balochistan, where Chinese nationals are often targeted, have also increased since the Afghan Taliban takeover in August 2021. According to the Pakistan Institute for Peace Studies, Balochistan experienced 42 attacks in 2020, killing 95 people and wounding 216 others. Violence in the province intensified in 2021 to 81 attacks that killed 136 people and wounded 345 others, and remained high in 2022 at 79 attacks that killed 106 people and wounded 271 others.
• Pakistan has worked to boost the security of Chinese nationals in recent years. The Pakistan Army, for example, has established the 34th and 44th Light Infantry Divisions — numbering approximately 15,000 troops each — specifically to protect Chinese nationals and investment projects. Punjab Police also established a dedicated Special Protection Unit of some 11,000 security personnel in a bid to protect Chinese workers.

Pakistan’s economic pressures and worsening militancy will likely further stymy CPEC’s progress by increasing threats to Chinese nationals and projects. Pakistan’s government will remain economically constrained in coming years by the need to repay some $47.6 billion in external debt from 2024-2026. Additionally, implementing the structural reforms needed to alleviate Pakistan’s economic crisis will, in the near term, prove politically costly for Islamabad by heightening Pakistanis’ hardships, thus challenging the government’s willingness to commit to such reforms. While China’s willingness to roll over Pakistan’s debt will provide some relief, economic pressures are thus poised to continue challenging Pakistan’s ability to accelerate CPEC’s progress and comprehensively reap its hoped-for economic benefits. Pakistan’s economic challenges will also further limit its willingness and ability to adequately resource counterterrorism campaigns. This is demonstrated by the fact that despite announcing an ”all-out comprehensive operation” against terrorism in April, Pakistan has since focused on more targeted ”intelligence-based” kinetic operations and the use of non-kinetic means like countering terrorist funding, which has so far failed to stem attacks. The effectiveness of any counterterrorism action would also be constrained by the fact that the TTP and some other militants are now helping drive attacks from bases in eastern Afghanistan. Though the TTP has reportedly increased its presence in Pakistan’s border areas near Afghanistan over the past year, more comprehensive kinetic action would likely require striking targets in Afghanistan, which would probably worsen near-term instability and insecurity in Pakistan’s border areas and ignite tensions with the Afghan Taliban. Against this backdrop, Pakistan will face a worsening militant threat — particularly in Balochistan, where the TTP has demonstrated its capability and intent to strengthen its presence and operational activity. Some Baloch separatists may be apprehensive about the ideologically distinct TTP’s growing activity in the region. However, mutual interests in fighting the Pakistani state will likely continue to drive deepening cooperation between the two entities, which may demonstrably improve Baloch militants’ ability to conduct attacks with even greater frequency and lethality than has been demonstrated in recent years. Most attacks in Balochistan will continue to target Pakistani security forces, but attacks against Chinese interests will likely rise as well — particularly given the TTP may be incentivized to conduct such attacks as a way to demonstrate its commitment to the Baloch cause and, in turn, strengthen ties with separatists. 

• Pakistan launched a full-spectrum counterterrorism campaign in 2014 named Operation Zarb-e-Azb. While the operation temporarily improved Pakistan’s security, it took nearly three years to carry out, cost billions of dollars, and displaced millions of people.
• The TTP’s presence in Balochistan was previously limited to its Pashtun-dominated areas. But on June 14, the group formally established a new administrative unit for the Baloch-dominated Qalat and Makran divisions of the province. Meanwhile, the 10 attacks TTP and linked groups have claimed in the first eight months of 2023 already eclipse the quantity and lethality of the attacks these groups claimed for all of 2021 and 2022. TTP attacks have killed 36 people so far this year, compared with the 14 people they killed in the past two years, contributing to a broader rise in casualties in Balochistan.

Despite delays, China will almost certainly continue CPEC and other strategically important investment projects that are already underway in Pakistan. However, worsening risks may leave Beijing increasingly hesitant to further invest in the country, and China’s attempts to bolster the security of its current projects may invite pushback from Islamabad as well. While CPEC’s progress and achievements have been more modest than initially envisioned, its abandonment or collapse would tarnish the polished image of the BRI that China has sought to foster for both domestic and foreign audiences — particularly for countries of the Global South. China’s strategic interest in developing and maintaining reliable access to Pakistan’s ports and the Indian Ocean further contributes to CPEC’s perceived indispensable strategic value. Nevertheless, China will have to account for Pakistan’s persistent economic challenges and worsening security, which will increasingly challenge CPEC’s progress, threaten Chinese nationals in Pakistan, and prompt intermittent tensions between the two countries. Such tensions will most visibly manifest through public Chinese statements emphasizing that the protection of Chinese nationals and investment projects is Pakistan’s responsibility. Chinese officials have already regularly called on Pakistan to bolster the security of Chinese interests amid the surge of attacks over the past year. In June, China’s then-Foreign Minister Qin Gang also urged the Pakistani military to maintain a relentless and ”zero tolerance” approach to countering terrorism. China’s temporary closure of its Islamabad-based embassy’s Consular Service Hall in February, in addition to its regular advisories that Chinese nationals limit their activities amid heightened security concerns, further demonstrate China’s limited faith in Pakistan’s ability to secure Chinese interests. As attacks worsen, China may seek to work more closely with Pakistani security forces, offering to collaborate and provide resources for investigating attacks on Chinese nationals, and potentially offering to finance additional Pakistani security force units dedicated to protecting Chinese interests. Should they feel persistent frustration with Pakistan-led efforts, China may also increasingly pressure Pakistan to permit the deployment of Chinese private security companies to secure Chinese assets and nationals. However, such requests are poised to face resistance from Pakistani officials, who would be wary of potentially paving the way for increased Chinese influence on domestic security operations and of allowing armed Chinese nationals to operate in the country. But while persistent challenges to CPEC’s progress and security may drive intermittent tensions between China and Pakistan, they ultimately do not appear large enough to fundamentally challenge the bilateral relationship between the two so-called ”all-weather friends.”