Dragon’s Leash: How China Uses CPEC to Discipline Pakistan
For years, Pakistan has boasted of its “iron brotherhood” with China, presenting the China–Pakistan Economic Corridor (CPEC) as a symbol of unshakable friendship. Roads, power plants, ports, and railways—over $60 billion worth of investments—were dressed up as development miracles. Yet, in reality, these projects became lifelines for a struggling economy that no one else was willing to bankroll. Now, with Beijing quietly pulling back from the ML-1 railway project, the illusion of an equal partnership is cracking. China has reminded Pakistan that CPEC is not just an infrastructure corridor; it is a leash, and Beijing knows when to tug.
CPEC was never charity. It was structured debt, with Pakistan paying back in dollars what it borrowed in yuan, often at commercial rates. Power projects generated electricity but also circular debt that Islamabad can’t service. Highways connected cities but left the treasury deeper in deficit. For China, this was not a gamble but a guaranteed mechanism of influence. For Pakistan, it became a survival strategy. When the IMF delayed or imposed stricter conditions, Beijing stepped in to roll over loans. In short, Islamabad has long mortgaged its autonomy in exchange for Chinese liquidity.
Yet, in recent months, Pakistan’s generals and politicians began flirting with a new suitor. General Asim Munir’s trip to Washington and his meeting with President Trump raised eyebrows not only in Washington but in Beijing too. Reports that Balochistan’s mineral wealth was floated in conversations with U.S. officials signaled more than diplomatic outreach—it suggested Islamabad might be willing to auction assets that China views as critical to its Belt and Road strategy. For Beijing, such moves reeked of betrayal. It was one thing for Pakistan to balance ties between East and West; it was another to dangle resources already linked to Chinese projects in front of Washington.
China’s response was not loud but it was decisive. The ML-1 project, touted as the crown jewel of CPEC, suddenly lost its Chinese backer. Official explanations pointed to debt sustainability, security risks, and technical issues, but the timing spoke volumes. China has endured repeated attacks on its nationals in Pakistan, has seen Islamabad repeatedly beg for bailouts, and has now watched its “iron brother” cozy up to Washington’s newest overtures. Freezing funding was Beijing’s way of saying: you can take photos with Trump, but don’t forget who pays your bills.
The message hit home instantly. Within days, Prime Minister Shehbaz Sharif unveiled new promises—Panda Bonds to raise yuan-denominated funds in Chinese markets and a flashy “CPEC 2.0” agenda with 21 MoUs signed on agriculture, IT, and industry. These announcements were less about genuine reform and more about optics. Pakistan wanted to show Beijing, and its own people, that nothing had changed. But the desperate timing betrayed the truth: this was damage control. At the SCO summit, Sharif’s awkward isolation in group photographs only reinforced the impression of a leader scrambling to appease allies who are increasingly impatient.
Meanwhile, India watched with a quiet smile. At the very same summit, Modi and Xi exchanged warm words about strategic autonomy and economic cooperation. The optics couldn’t have been clearer: Pakistan was being scolded while India was being courted. Of course, India is not foolish enough to mistake this for the dawn of a new age in India–China relations. New Delhi remains cautious, fully aware of the trust deficit with Beijing. But that did not stop it from enjoying the spectacle. Pakistan tried to reach beyond its diplomatic capacity and was swiftly shown its rightful place. For India, the amusement lies in the irony—while Islamabad was once China’s favorite partner, today it is being pulled back by the leash as India quietly plays along.
The larger lesson is stark. Pakistan’s relationship with China is not an equal friendship but a hierarchical dependency. Every road, every power plant, every loan has a price—and Beijing never forgets to collect. Islamabad may think it can balance Washington and Beijing, but when push comes to shove, the dragon decides how far the leash stretches. Cozying up to Trump may win headlines, but when China tightens its grip, Pakistan has little choice but to heel.
