On February 26, Pakistani officials announced a step forward in China’s plans to construct a transportation corridor through Kashmir to the Pakistani port of Gwadar. Gwadar Port Authority chairman Dostain Khan Jamaldini briefed the Senate’s Ports and Shipping committee after attending the second meeting of the CPEC Joint Cooperation Committee in Beijing, saying that China has approved nine projects worth $1.8 billion in a bid to develop Gwadar port over the next 2–3 years (The Business Recorder, February 26).

China and Pakistan are finalizing plans to construct an $18 billion, 2,870 mile China-Pakistan Economic Corridor (CPEC) linking Kashgar in Xinjiang to Pakistan’s Gwadar port on the Arabian Sea, in Balochistan province. CPEC will be a skein of highways, railways and oil and natural gas pipelines, transforming Pakistan into a giant highway conveying Chinese goods to the Arabian Sea, while Middle East and African oil is shipped eastwards.

India has expressed reservations about the project, particularly as CPEC is likely to transit Pakistan-Controlled Kashmir (PCK). Pakistani President Mamnoon Hussain, currently visiting China, discussed the CPEC with President Xi Jinping and Premier Li Keqiang (Ministry of Foreign Affairs of the People’s Republic of China, February 20).

Seeking to allay Indian concerns, on February 20 Chinese Foreign Ministry spokesman Hua Chunying told a press briefing, “With regard to whether the economic corridor passing through Kashmir, as far as I have learnt a joint committee for the construction [of CPEC] has been established and a second meeting has been held coinciding with the Pakistan President’s visit. I don’t know if they have talked about whether this corridor will pass through this region [PCK] but I can tell you that we hope the Kashmir issue can be properly resolved through consultation and negotiations between India and Pakistan” (The Hindustan Times, February 21).

Kashmir has been in dispute since India and Pakistan were created in 1947. All three nations maintain de facto administrations; India (Jammu and Kashmir), China (Aksai Chin), and Pakistan (Azad Kashmir and Northern Areas). India has persistently refused to acknowledge either Pakistani or Chinese sovereignty in Kashmir.

But impediments remain before the CPEC is fully realized. At a Sino-Pakistani track-two meeting in Beijing in August 2013, National Development and Reform Department of International Cooperation vice director general Lin Dajian highlighted “the security issues and challenges that could impede the speed of (the) project.” (The News International, August 7, 2013). A month later, Chinaese Ambassador to Islamabad Sun Weidong bluntly stressed Beijing’s expectations of the Pakistani government “safeguarding the security of Chinese institutions and citizens in Pakistan” during CPEC construction (Newsbrief, Royal United Services Institution, January 2014, Vol. 34, No. 1.)

Territorial disagreements with China have become an issue in India’s upcoming general elections. Opposition Bharatiya Janata Party’s (BJP) candidate for Prime Minister Narendra Modi referred to India’s ongoing territorial disputes with China in Arunachal Pradesh and Kashmir, telling a February 22 rally in Pasighat, “No power on earth can take away even an inch from India. China should give up its expansionist attitude and adopt a development mindset” (The Diplomat, February 25). Two days later Chinese Foreign Ministry spokesperson Hua Chunying told reporters, “You mentioned expansionism by the Chinese side. I believe all of you can see that China has never waged a war of aggression to occupy an inch of land of other countries” (The Assam Tribune, February 24).

Even as India remains concerned about CPEC’s transit through Kashmir, there are indications that Kashmiri political leaders are increasingly looking to China to help break the political impasse. The All Parties Hurriyat Conference (APHC), formed in March 1993, is a political alliance of 26 Kashmiri organizations, formed to achieve Kashmiri self-determination according to United Nations Security Council Resolution 47. APHC leader Abdul Gani Bhat believes that China could be influential in resolving Kashmir’s final political status, noting, “China is a growing power. It has strategic interests in the South Asia region. So, it is natural that China seeks a role in the resolution of Kashmir dispute” (The Daily Mail, February 22).

If China is to realize the CPEC, it will need India’s cooperation. As in many other countries, China’s preferred diplomatic technique involves cash. In February, a Chinese working group submitted a five-year trade and economic planning cooperation plan to India, offering to finance up to 30 percent of the targeted $1 trillion investment in infrastructure during India’s 12th Five-Year Plan (2012–17) (The Economic Times, February 20). China’s $300 billion would be used to upgrade India’s decrepit rail, road and power infrastructure and buy into India’s telecom market.

Pakistan has a strategic geo-political location at the intersection of many of the world’s major maritime oil supply lines and is in close proximity to energy rich Central Asian countries, South Asia and the Middle East. As CPEC would have dramatic impact on Pakistan’s economy, Islamabad fully supports the project.

China, hedging its bets, has invested substantially beyond Pakistan, as Afghanistan, Central Asia and India are all both potential trade partners and natural resource sources needed by China both to secure economic growth and enhance Xinjiang’s development.

Accordingly, China will need to bring India onboard in supporting CPEC. At the moment, Beijing’s policy seems to be a mix of $300 billion investment and diplomatic flexibility along the 2,520 mile-long Line of Actual Control (LAC) delineates the Indian-Chinese border. Whether commerce can succeed in resolving Kashmir territorial disputes remains to be seen.