Embrace of CPEC shows Saudi Arabia means business

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By Naveed Ahmad
The China-Pakistan Economic Corridor (CPEC) has a third partner, namely Saudi Arabia. This would not have been possible without Beijing coming on board to the idea. As Prime Minister Imran Khan paid a whirlwind maiden visit to Riyadh, his country’s army chief was spending quality time with the Chinese president. Still, the two allies have to hammer out a few more details before President Xi Jinping and Khan’s meeting in Beijing next month. Around the same time, Saudi Arabia will officially announce itself as the CPEC’s third partner, converting the understanding in principle into a formal accord. The details of Saudi investment will become public when its ministerial-level delegation visits Islamabad early next month.
Saudi Arabia is a natural partner of the logistical corridor to China. Riyadh is not only one of the biggest importers of Chinese products, but is also the largest petrochemical exporter to the Asian nation. What route could better serve the two than Gwadar port in the north Arabian Sea, linked to western China and Central Asia through a network of arteries? Interestingly, the Gulf nation’s CPEC embrace coincided with Italian Deputy Prime Minister Luigi Di Maio’s announcement in Beijing on Friday that Italy hopes to become the first G-7 country to join Xi’s wider Belt and Road Initiative. Rome may sign a formal agreement in November. CPEC is a vital element of China’s global quest for a logistical and infrastructural superhighway under the Belt and Road Initiative.
The entry of Saudi Arabia and possibly Italy into China’s plans could be catalytic in convincing other European nations such as Britain and France, which have been reluctant to become partners in the multibillion-dollar global economic superstructure over protectionist concerns.
For Pakistan, China and Saudi Arabia, the CPEC offers a unique partnership. Riyadh sees Gwadar as a hub for its petrochemical exports and storage. Connecting its oil terminals with Gwadar via pipeline will marginalize any security risks posed in the region. Along with China, energy security for other oil-dependent Asian nations will be reassured too.
From Beijing’s perspective, Gwadar shrinks the distance its exports must travel to reach the Gulf by more than 10,000 kilometers, and reduces the consignment delivery time to 10 days from 45. The lowering of logistical costs notwithstanding, the CPEC also offers vital security for container shipments and oil pipelines that the conflict-prone and piracy-hit Strait of Malacca cannot.

In a giant leap, Saudi Arabia is laying its geo-economic footprint on a port and region beyond its sovereign boundaries, realizing the understanding reached with China during Crown Prince Mohammed bin Salman’s maiden visit in 2016. The Middle Eastern nation has pursued a pragmatic policy of engaging with its largest trading partner amidst a shifting balance of power. However, the Saudi entry into the Belt and Road Initiative won’t happen without raising eyebrows in the White House, which is waging a trade war with China. Riyadh’s embrace not only helps address Washington’s concerns but also keeps Islamabad from drifting away too far.
As much as Saudi investment is vital for Pakistan’s economy and its infrastructure, it also helps balance China’s influence. The eyebrows continue to be raised about the secrecy of CPEC-related agreements and the high interest rates Beijing is allegedly charging on loans while employing its manpower, equipment and other services. The vital western logistical bridge for China should not be standing on shaky ground.
The Saudi clasp of CPEC has raised alarm bells within Pakistan’s influential pro-Iran lobby. The noisy opposition to the economic corridor is set to become ever more aggressive and intense. Tehran has been vainly trying to sell a bizarre narrative of Gwadar and Chabahar being sister ports, for the two are at best competitors. Chabahar is an Iranian port run by India, while the one 80 nautical miles to the east is Pakistan’s, managed by China and available to Saudi Arabia for business. Though Gwadar is no military base for either of the foreign powers utilizing it in the future, Tehran’s infatuation is grounded in the Iran-Iraq War of the 1980s.
Then, despite Pakistan’s alliance with the West and Supreme Leader Ruhollah Khomeini’s animosity toward Islamabad, Gen. Mohammed Zia-ul-Haq provided a safe haven for Iranian shipping in Karachi port. With Saudi Arabia’s entry into the CPEC and its presence in Gwadar, the same favor is not likely to be offered in any future conflict involving Iran. Islamabad has repeatedly offered to mediate between Tehran and its neighbors while reassuring that it won’t destabilize the region by any means. Advancing economic ties with allies like China and Saudi Arabia is as much Pakistan’s right as it is Iran’s to lease Chabahar port to India or provide bases for Russia.
Saudi Arabia’s admission as a full member of CPEC stems from the country’s Vision 2030, which necessitates a diversification of the economy and the building of geo-economic networks. Saudi businessmen, as well as the state, have been investing in mega-projects in China, including refineries and industrial production facilities. It is surely only a matter of time until the UAE makes a similar announcement. The Chinese doors appear wide open, especially after Xi’s exhaustive three-day visit to Abu Dhabi in July. Meanwhile, Islamabad must not lose focus from its anti-corruption drive while reforming the public sector for optimal performance.
(Naveed Ahmad is an investigative journalist and academic based in the GCC with a career in writing on diplomacy, security and governance. Besides other honors, he won the Jefferson Fellowship in 2000 and UNAOC Cross-Cultural Reporting Award 2010. Twitter: @naveed360)