China’s intensified involvement in dam construction across Pakistan, particularly in contested regions, signals a transformative chapter in the China-Pakistan strategic partnership under the China-Pakistan Economic Corridor (CPEC). While these massive infrastructure projects promise economic rejuvenation and energy solutions for Pakistan, they also heighten regional sensitivities, especially with India. This editorial evaluates whether China's dam-building spree is a visionary collaboration that serves mutual interests or a geopolitical gambit that risks exacerbating instability in South Asia. Through economic, strategic, and environmental lenses, the true nature of this collaboration is examined: Is it a durable alliance or a source of mounting regional tension?
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The China-Pakistan Economic Corridor (CPEC), launched in 2015 as a flagship component of China's Belt and Road Initiative (BRI), has injected over $60 billion into Pakistani infrastructure, energy, and connectivity. Designed to link China’s western region to the Arabian Sea via Gwadar Port, CPEC also aims to overhaul Pakistan’s energy sector, which has long suffered from chronic shortages and underinvestment.
A major component of this infrastructural revolution is the rapid construction of large-scale hydropower dams in Gilgit-Baltistan and Khyber Pakhtunkhwa. Key projects such as the Diamer-Bhasha Dam, Dasu Hydropower Project, Mohmand Dam, and the Kohala Hydropower Project, many of which are located in or near disputed territories, represent a substantial expansion of Chinese engineering and financial commitment to Pakistan.
While these projects are touted as solutions to Pakistan’s water and electricity woes, their geographical placement and financial structuring have triggered sharp geopolitical and environmental critiques. India opposes the dam-building in Gilgit-Baltistan, which it claims as part of Jammu and Kashmir. Simultaneously, environmentalists and civil society actors in Pakistan have raised concerns over the ecological costs and transparency deficits of these mega-developments. As Pakistan welcomes Chinese investments, the broader question persists: Are these hydropower projects a lifeline or a liability?
Strategic Depth in Sino-Pakistani Relations
The accelerating pace of dam projects highlights the maturation of China-Pakistan ties into a durable strategic axis. Unlike many Western investments that shy away from politically sensitive or high-risk zones, Chinese funding under CPEC shows a willingness to engage deeply in Pakistan’s most remote and geopolitically volatile areas.
By funding large-scale hydropower infrastructure, China is embedding its strategic presence within the core of Pakistan’s national development framework. These projects are not merely infrastructure, they are symbols of mutual reliance. The involvement of major Chinese state-owned enterprises like China Gezhouba Group and PowerChina in these dam constructions reflects Beijing’s long-term commitment and confidence in Pakistan’s stability.
Strategically, these dams provide China with more than economic returns. They help secure overland trade routes, create favorable conditions for future logistics hubs, and serve as tools for geopolitical signalling, particularly to India. For Islamabad, this partnership is a diplomatic hedge, offering a counterbalance to growing regional isolation and strategic pressure from New Delhi and Washington.
Economic Lifeline for Pakistan’s Energy and Water Crisis
Pakistan’s electricity shortfall, estimated at over 7,000 MW during peak seasons, has long hindered industrial productivity and social development. Hydropower, with its potential for clean, renewable energy, offers a critical solution. The Diamer-Bhasha Dam, expected to generate 4,500 MW, and the Dasu Project, with a capacity of 4,320 MW, are integral to this recovery strategy.
In addition to power generation, these projects are crucial for water management in an increasingly water-stressed nation. Pakistan’s per capita water availability has plummeted from 5,260 cubic meters in 1951 to less than 1,000 cubic meters today, crossing the threshold of absolute water scarcity. The Diamer-Bhasha Dam alone is expected to store 8.1 million acre-feet of water, ensuring irrigation for millions of acres of farmland.
Moreover, these projects generate employment and boost economic activity in underdeveloped northern regions, helping bridge urban-rural divides. According to WAPDA, tens of thousands of jobs have already been created during the initial phases of dam construction.
In the vacuum left by the reluctance of Western financial institutions to fund such high-stakes projects, especially in disputed territories, China has stepped in with capital and expertise. Thus, it serves not merely as an investor but as a transformative enabler of Pakistan’s development aspirations.
Environmental and Water Governance Benefits, With Caveats
Hydropower dams, if properly managed, can bring long-term environmental benefits. In Pakistan’s case, where floods frequently destroy infrastructure and displace communities, regulated dam reservoirs offer the capacity to control water flows and prevent natural disasters. Seasonal glacier melt and erratic monsoon patterns, both exacerbated by climate change, further underscore the need for water storage and regulation.
China’s experience with large-scale civil and hydrological engineering, including its expertise from the Three Gorges Dam project, brings technical know-how that Pakistan can harness. Innovations in sedimentation management, turbine efficiency, and dam safety can elevate Pakistan’s energy infrastructure standards, provided these technologies are responsibly adapted.
However, these advantages must be weighed against environmental costs. Mega-dams frequently lead to deforestation, habitat fragmentation, and alterations to aquatic ecosystems. In Gilgit-Baltistan, thousands of historical petroglyphs are under threat from submersion. Displacement of indigenous communities without adequate compensation is another pressing issue, with long-term implications for social cohesion.
Geopolitical Implications and India’s Objections
India’s opposition to these dam projects stems from both territorial claims and regional power calculations. New Delhi regards the construction of major infrastructure in Gilgit-Baltistan, a region it considers part of Jammu and Kashmir, as illegal and provocative. The involvement of China, especially after the 2020 Galwan clashes and escalating border disputes, compounds this perception.
China’s footprint in disputed areas is viewed in India as part of a broader strategy to assert dominance through “infrastructure-led legitimization.” This tactic, wherein economic development is used to entrench political claims, is increasingly visible in the Himalayas, from Pakistan to Nepal to Bhutan. In response, India has accelerated its own dam-building and road-laying projects in Ladakh and Arunachal Pradesh.
This tit-for-tat development race risks militarizing natural resources and environmental landscapes. Water, long considered a source of peace under the Indus Water Treaty, could become a flashpoint if unilateral construction escalates into diplomatic or even military confrontation.
Concerns over Debt and Transparency
The financial underpinnings of these dam projects remain opaque. While Chinese loans have enabled rapid construction, the repayment terms are rarely disclosed in full. With Pakistan’s public debt hovering around 77% of GDP (as of 2024), concerns about debt sustainability are not unfounded.
Critics warn of a “debt trap” scenario similar to what unfolded in Sri Lanka, where the inability to repay Chinese loans led to the lease of Hambantota Port to a Chinese firm for 99 years. Although Pakistan’s projects differ in structure, the pattern of opaque bilateral agreements and high-interest terms raises alarms.
Moreover, public participation and local consent in these megaprojects are minimal. Civil society groups, including the Pakistan Fisherfolk Forum and Gilgit-Baltistan’s indigenous councils, have called for inclusive planning and compensation mechanisms. Without transparent governance, these projects risk alienating the very communities they are meant to benefit.
While China’s dam-building drive in Pakistan appears economically beneficial and strategically savvy, it carries embedded risks. The deepening alliance may yield short-term gains but could morph into long-term dependence without fiscal prudence and regulatory checks. The lack of transparency, ecological risks, and regional sensitivities demand a more cautious and multilateral approach. Infrastructure should be a bridge to peace and progress, not a trigger for conflict or environmental degradation.
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To cut the long story short, China’s accelerated dam projects in Pakistan are a double-edged sword, offering both promise and peril. They symbolize a robust and growing strategic partnership that could redefine energy and water management in Pakistan. Yet, they also inhabit contested terrain, politically and geographically, that could invite future regional instability. The challenge lies in ensuring these projects remain instruments of development and not leverage in great-power rivalry. Transparent financing, environmental safeguards, and regional diplomacy must guide this hydropower alliance. Only then can these mega-dams stand not just as concrete structures, but as durable testaments to cooperation and peace in South Asia.
