After witnessing a lull in activities lasting over two years, stakeholders were expecting CPEC to revitalize beginning this summer. The tenth meeting of the JCC – the apex planning platform for CPEC projects between China and Pakistan – was scheduled for Friday July 16. The meeting’s outcomes were expected to set the pace for existing and new mega projects as well as top-level political exchanges in near future. (For more on CPEC-related recent developments, read “CPEC: back to work?” published June 21, 2021).

But it was not to be. On Wednesday July 14, an explosion on-board a shuttle bus in Upper Kohistan (Khyber Pakhtunkhwa) resulted in tragic death of at least 9 Chinese nationals working on Dasu Hydropower Project. At least 4 Pakistani staff also reportedly lost their lives. The heavy loss of life has highlighted the security risk in Pakistan. There is noticeable alarm emanating from China’s leadership, which is now pushing for a reassessment of security measures for Chinese nationals working in Pakistan.

The two countries initially differed publicly over the nature of the fatal incident, but it is now confirmed by both sides as a “terrorist attack” and it is being probed at the highest level. The unfortunate incident is a setback for bilateral economic cooperation. It puts Pakistan in a particularly difficult position, amid growing security challenges due to changing situation in neighboring Afghanistan and its impact back here.

For instance, the said JCC meeting has been officially postponed, and it is unclear when it will take place in the future. Meanwhile, work on the 4,320-MW Dasu Hydropower Project has also been suspended, amid conflicting reports of mass layoffs at the project site. CPEC won’t be derailed by an isolated incident, but the message that is received by foreign investors is that even Chinese projects are not safe.

China’s reaction has been forceful, sending “expert criminal investigators” to probe the attack, as per China’s influential Global Times editorial. China wants Pakistan to not just “locate the real perpetrators and severely punish the organizers behind the attack” but also “fully investigate the security risks for Chinese personnel, institutions and projects in Pakistan, plug loopholes, strengthen early warning systems, security measures, and make utmost efforts to ensure the safety of Chinese personnel…”

China has a lot riding on the sustainability and financial success of projects under CPEC, which is the flagship of President Xi’s Belt and Road Initiative (BRI). However, China’s forbearance in the wake of such incidents cannot be taken for granted. It has to respond at some point, mutual all-weather relationship notwithstanding. Beijing cannot have such incidents setting precedents overseas in other investment locations, especially in resource-rich conflict zones.

In the recent past, policymakers have played up the possibility of improved regional connectivity via CPEC extending into Afghanistan post-US withdrawal. It looks like a long-term project. The increasingly violent and unstable situation in Afghanistan is bound to impact Pakistan and result in terrorists striking at prominent targets. This can give China second thoughts. Pakistan cannot afford another attack on Chinese interests on its soil. It has work to do, to shield its economic future from being jeopardized by regional turmoil once again.