“This will be my first trip to Pakistan, but I feel like am going to visit home of my brother. Over the years thanks to the nurturing of generations of leaders and people of all sectors of both countries, China-Pakistan friendship has flourished like a tree growing strong and tall”
– Chinese President Xi Jinping
1. China Pakistan friendship dates back to 1951, wherein Pakistan was one of the first countries to establish diplomatic ties with communist China. Since then the ties between the two countries have grown by leaps and bounds with China assisting Pakistan in fields like nuclear technology, missile technology and other critical military technology like fighter aircraft. The relationship between the two countries has been taken to a new level when they signed the MoU for development of Gwadar port and the China Pakistan Economic Corridor (CPEC) which runs from Kasghar in China to Gwadar on the Pakistani coast. The CPEC is an infrastructure project which includes construction of roads, railway lines, oil pipelines and many power projects.
2. As a flagship project of China’s Belt and Road initiative, CPEC is pivotal to China’s energy security owing to the growing security concerns in the South China Sea. The CPEC could bring economic avenues to Pakistan and can foster regional economic and trade integration between South Asia, Central Asia, East Asia and West Asia. However, it is also surrounded by some serious challenges ranging from regional security environment, economic opacity and discontent among people from various provinces in Pakistan. The views of the experts on the issue of CPEC are varied and suggest that CPEC either make Pakistan a regional economic power or an economic slave of the Chinese. Either way it is a cause of immense worry for the Indian security establishment.
Research Methodology
3. To facilitate the research work, data was collected from various documentary and non-documentary sources. The research is qualitative in nature. The primary sources of data collection are through the government publications regarding the state of Pakistan economy and the reports of international agencies like IMF and World Bank on the said subject. The secondary sources being considered for data collection would be periodicals, reference books, monographs, research papers, televised interviews of eminent personalities, etc.
Review of Literature
4. The project is huge in scale and is often being compared to Marshall Plan carried out after the World War II to build the continent of Europe. As per various experts and research papers this project has major implications in fields of economic, security and geo-political aspects of this part of the world.
(a) Economic Effects. The investment being carried out by China to the tune of approximately $46 billion will help revive the Pakistani economy by infusing fresh capital and local job opportunities. Besides being a transit corridor, CPEC is planned as an economic corridor to accrue maximum economic benefits to Pakistan regarding energy, industry, trade, and new business opportunities. CPEC is expected to attract foreign investment, which could boost Pakistan’s exports, increase its GDP, and bring improvement in health and basic amenities. The Chinese investments in CPEC come with a sovereign guarantee of the state of Pakistan and it will have to repay $90 billion by 2030, which is a task easier said than done. In 2017, Pakistan had an outstanding debt of $72 billion, without the inclusion of the CPEC loan. In October 2016, a Pakistani senator stated that China is another East India Company and in CPEC, Pakistan’s national interests are not being protected. If this were to come true, China would convert Pakistan to a dependent country which would look towards China for its day to day survival.

(b) Effects on Regional Security. The CPEC will enable more co-operation between the Chinese and Pakistan, particularly in the field of defence, as China would want to protect its investment. There have been news of the presence of Chinese troops in PoK. The Sino-Pak collaboration in field of defence has already seen significant milestones like the missile technology transfer, nuclear technology and the co-production of fighter jets. A powerful Pakistan military will cause problems for its neighbours, particularly India and Afghanistan. Economically more powerful Pakistan is likely to trigger an arms race in the sub-continent and will further endanger the already fragile regional security scenario. Pakistan has emerged as the biggest arms importer of the Chinese arms and accounted for 35% of the total arms sales by Beijing in 2017.

(c) Effects on Geo-politics. The CPEC passes through PoK and will complicate the future negotiations in respect of the resolution of Kashmir issue between India and Pakistan. Gwadar port, which is an important part of the CPEC project, will give the Chinese Navy a strong foothold in the Indian Ocean Region and it is likely to affect the existing influence of the Indian and the US navies in the region. The CPEC provides the Chinese an alternative route to source their critical oil supplies by-passing the Straits of Malacca, in case of hostilities with the countries in the South China Sea region. The CAR countries along with Russia will get an easy access to the Indian Ocean region though CPEC as they are connected by other projects under the Belt and Road Initiative. The Chinese would in future involve Iran and Afghanistan in the project through lateral routes and economic incentives. This will result in huge losses to India in its investment in the Chabahar port in Iran. This has implications of disturbing the existing geo-political setups in region with Chinese influence increasing manifold.
Statement of the Problem
5. The state of economy in Pakistan has a direct bearing on its ability to strengthen its conventional military forces vis-à-vis India. Any change in Pakistan’s economic conditions will either result in adversely affecting or bolstering its policy of ‘Bleeding India by a Thousand Cuts’. With an assessed prediction of Pakistan economy collapsing because of CPEC, the cross-border terrorism affecting India would increase.
Objectives of the Research
6. The objectives of the current research are mentioned below: –
(a) The initial part of the study would focus on understanding the total extent and present status of the China Pakistan Economic Corridor. It would include the major projects under CPEC and financing structure for the same.

(b) The second portion of research is directed towards identifying the economic challenges being faced by Pakistan because of this project. The research will also try to identify the reasons for collapse of Pakistan economy and the impact of the same on the socio-economic conditions in Pakistan.

(c) The last part in the research would be to analyse the impact of collapse of Pakistan economy on the cross-border terrorism in India.

Hypothesis to the Problem Statement
7. The hypothesis for the research would be: “To assess whether the collapse of Pakistan economy due to CPEC will result in increased cross border terrorism activities in India”.

8. Any research on this topic would be broadly into three sub-areas like effect on Pakistan economy, regional security environment and geo-political implications for nations in the IOR. Amongst these, the core issue is the effect of CPEC on the Pakistan economy. CPEC is in its nascent stage of implementation and its success or failure will have an everlasting effect on the security and sovereignty of Pakistan. The project has generated huge curiosity in the minds of the people across the globe and the fact can be gauged by the huge media attention that it has attracted.
9. Since CPEC is being floated as an economic project and India is the largest regional economy in this region, the success or failure of CPEC will have an impact on the Indian economy. Also, Pakistan either as a regional super power or as a failed state, will have different security implications for India. It is felt by many experts that the main binding factor that holds the state of Pakistan together is not Islam, the reason for which it was founded, but the anti-India sentiments being generated by the military and political class. Time and again the Pakistani political and military top brass, whenever they have faced testing times, have rallied the masses behind them by generating anti-India sentiments by false propaganda. So, it is imperative to understand the implications of the project on India.
10. After the 1971 war, Pakistan realized that conventionally it cannot match India’s military and economic might and hence came up with the concept of ‘Bleeding India by Thousand Cuts’. This policy of Pakistan has continued since then and the India continues to face the threat of terrorism from the non-state and state actors in Pakistan. The economic prosperity or bankruptcy of Pakistan due to CPEC will force Pakistan to rethink on its policies to contain India. The study will focus on assessing the impact of failure of Pakistan economy on the cross-border terrorism affecting India.
Organisation of the Dissertation (Chapterisation)
11. It is proposed to study the subject under following five chapters: –
(a) Chapter I: Introduction and Methodology. This chapter would cover a brief introduction to the topic, literature review, research problem, statement of problem, hypothesis and the objectives of the study.

(b) Chapter II: China Pakistan Economic Corridor – The Long-Term Plan and Current Status. The chapter would dwell upon the long-term plan and objectives of the CPEC. It will also analyse financing details and conditions of the major projects under CPEC.

(c) Chapter III: Effects of CPEC on Pakistan’s Economy. This chapter would seek to identify the problem areas due to which the Pakistan’s Economy would suffer due to CPEC. The chapter would also try to analyse the effects of this on the social conditions in Pakistan.

(d) Chapter IV: Effect of Weak Pakistan Economy on Cross Border Terrorism in India. This chapter would encompass a review and analysis of the effect of a weak Pakistan economy on its security and sovereignty. The chapter will also analyse the effect of this on Pakistan’s ability and intent to support the cross-border terrorism in India.

(e) Chapter V: Conclusion and Recommendations. The chapter will bring out the essence of the research and will give out the effect of CPEC on India and the associated effect on cross border terrorism and recommend some measures to counter this threat.