China in Pakistan: How Instability and Resources Ousted the West

Leverage in geopolitics equates to power, both in retaining it and in gaining more. Great powers grapple with each other for chokepoints, hoping to box in a rival or expose a rival's dependence. Structural advantages provide the keys to power. China and the United States illustrate this constantly: American tariffs and foreign direct product rules apply pressure; Chinese restrictions on rare earth metals and minerals1 push back. Microchips are the famous example. But the world is full of other openings for leverage, and Balochistan, Pakistan's largest and poorest province, is one of them. Chinese state-backed capital2 now dominates Western private investment there, particularly in mineral extraction.Minerals have mattered to human civilization for centuries, but in the 21st century they have become central to development. The global push toward solar panels, lithium-ion batteries, and electric vehicles has intensified demand for copper, gold, lithium, and chromite3, and Balochistan holds vast reserves of all four, drawing billions of dollars in investment. At the same time, the province is entering the most violent phase of its recorded history. The convergence of mineral wealth and rising violence is creating a chokepoint: minerals the United States depends on are increasingly resting in the hands of a Chinese near-monopoly.

CPEC and the Mineral Build-Out

The China-Pakistan Economic Corridor4, initially valued at $46 billion, rose to $65 billion by 2022. It links Gwadar Port to China's Xinjiang region through railways, pipelines, roads, and energy projects. At a Pakistan Mineral Cooperation Forum session in January 2026, Pakistan's federal planning minister said mineral exports could reach $6 billion to $8 billion this decade under what officials are calling CPEC 2.0. Islamabad reinforced that pitch at the Pakistan Minerals Investment Forum5 in Islamabad in April 2026, inviting both Washington and Beijing to bid on the same reserves. Several extraction projects are already running or in advanced development. The Chinese state-owned China Metallurgical Group's Saindak copper-gold mine6 is targeting 400,000 tonnes of output by 2026. Barrick Gold's Reko Diq project7, a joint venture with Pakistani state enterprises and the Balochistan government, is projected to add $5 billion to Pakistan's GDP. The Duddar lead-zinc mine in Lasbella district is already operational under a Chinese state-linked operator, and in November 2025 a joint venture between a local firm and Guangdong Handar signed a new extraction agreement under CPEC.

These Chinese investors are not independent corporations; they are state-backed8, which lets them absorb political risk as a strategic calculation rather than a balance-sheet concern. Barrick Gold, by contrast, is publicly traded and accountable to shareholders9. As security in Balochistan deteriorates, Chinese state-sponsored firms can keep operating at Beijing's direction, while Barrick and other Western companies are forced to weigh pulling out. That asymmetry is itself a form of Chinese advantage: the more Western firms retreat, the larger the vacuum Chinese firms can fill, and the higher the insurgent risk climbs, the more that imbalance compounds.

Wealth Without Development

Despite mineral wealth worth trillions of dollars, Balochistan remains underdeveloped, poor, and distrustful of the state10. Of 90 projects under CPEC, the government says 38 worth $25.4 billion have been completed since 2015, with 23 more worth $2.1 billion underway. Most of that money has gone to Sindh and Punjab. Balochistan, designated as the corridor's geographic center, has received only $890 million, spent almost entirely on the port city of Gwadar. That gap is structural, not incidental11: CPEC's political economy favors federal priorities in Islamabad over provincial ones, leaving Balochistan with little legislative leverage of its own. The 2025 Balochistan Mines and Minerals Act deepened that imbalance, centralizing mineral licensing under a federally controlled investment authority12 that can override provincial mining departments, a move Balochistan's high court has since suspended pending a constitutional challenge.

The pattern is familiar elsewhere. In the Democratic Republic of Congo13, which produces nearly 68 percent of the world's cobalt, mineral revenue has flowed largely to foreign processors and a narrow elite rather than the communities sitting on the deposits, and the country remains among the poorest in the world by income per capita. Balochistan is following the same script: a resource boom that bypasses the people living on top of the resource tends to convert into grievance, and grievance into recruitment. The $890 million spent in Gwadar functions less as an accounting line than as material proof, to many Baloch, that Islamabad's extraction model has nothing to offer them. That is the channel through which regional poverty has fed the Balochistan Liberation Army's recruiting pipeline14, and why the insurgency tracks the wealth gap as closely as it tracks ideology.

Insurgency as Strategic Disruption

Armed groups, chiefly the Balochistan Liberation Army (BLA), the Balochistan Liberation Front, and the Baloch Republican Army, have grown more organized, recruiting educated youth and women15 and adopting suicide bombing tactics. Targeting has shifted toward infrastructure, Chinese nationals, and CPEC projects specifically. The Pakistan Institute for Peace Studies16 recorded 254 attacks in Balochistan in 2025, up 26 percent from 2024. ACLED17 reported a 65 percent rise in attacks using explosives and grenades over the same period. The Global Terrorism Index 202618 recorded 1,045 terrorist incidents and 1,139 fatalities nationwide in Pakistan, with 75 percent of those incidents occurring in Balochistan and Khyber Pakhtunkhwa combined.

The shift from scattered rebellion to coordinated operations19 marks an organizational maturing. Small, ideologically driven cells use terror to manufacture power they otherwise lack; calculated, sustained strikes signal something closer to strategy. The BLA's current campaign follows the corridor itself, the roads and rail lines that move Balochistan's minerals out of the province.

The Corridor as Target

The N-70 Quetta–D.G. Khan Highway, the N-25 Quetta–Karachi Highway, the M-8 Gwadar–Ratodero Motorway, and the N-40 Quetta–Taftan Road have become primary targets because they carry CPEC and mineral traffic. Rail lines alone have been struck 21 times, including the March 2025 Jaffar Express attack20, the largest train hostage-taking in Pakistan's history, which killed 64 people and took 354 hostages. On May 24, 2026, one day before Prime Minister Shehbaz Sharif met Chinese President Xi Jinping, the BLA carried out a suicide attack on rail infrastructure near Quetta21, killing 47 and injuring nearly 100. The timing was not incidental: the BLA is applying pressure at chokepoints to make extraction economically unsound. The corridor's exposure is structural. The N-25 runs 813 kilometers between Karachi and the Afghan border at Chaman as a single-lane road already notorious for accidents before it became an insurgent target, leaving little redundancy when a stretch closes. Reko Diq's copper-gold concentrate22 is slated to move entirely by rail over roughly 1,400 kilometers to Port Qasim in Karachi, a single route with no alternative, meaning a handful of well-placed strikes could stall the project's output entirely. Saindak's 400,000-tonne target depends on the same road and rail network already absorbing most BLA attacks. Beijing reads the May 24 timing as a warning aimed squarely at China; Western investors read it as evidence of a province too unstable for anyone to operate in safely.

Operation Herof and the Investor Split

Beyond routine attacks, the BLA has run two coordinated campaigns under the name Operation Herof23. The first, launched overnight in late August, blockaded the N-8 and N-70 highways simultaneously across five districts. The second ran six days in late January and early February, striking police stations, counterterrorism offices, and banks while achieving effective control of 10 cities, including Gwadar and Dalbandin, near the Reko Diq site; the government reported 22 security personnel and 36 civilians killed. In June 2026 the Balochistan Liberation Front killed 33 security personnel in Khuzdar district, again blockading the CPEC route. Controlling 10 cities for six days is not a typical insurgent act; it is a demonstration of territorial capacity that registers in London, Toronto, and Beijing alike as a signal to stay away.

Yet Chinese and Western investors are reading that signal differently. Twenty Chinese nationals have been killed in Balochistan since 2020. Islamabad has proposed a $260 million Special Protective Unit and joint China-Pakistan training programs, which Beijing has called insufficient. Washington has already begun treating the province's armed groups as a direct security threat: in August 2025 the State Department designated the Balochistan National Army and its Majeed Brigade as a foreign terrorist organization24. After Operation Herof's second wave, Barrick Gold announced a formal review of all aspects of its Balochistan operations25, subsequently slowing development for at least 12 months. No comparable Chinese firm has signaled a similar review. Western capital has not vanished entirely: Missouri-based U.S. Strategic Metals signed a $500 million refining deal with Pakistan's Frontier Works Organization26 in September 2025, but that agreement centers on downstream processing rather than extraction inside Balochistan's insurgent-hit districts, leaving the underlying asymmetry intact. Barrick, accountable to Western shareholders27, cannot justify the exposure; Chinese state-owned firms, backed by Beijing's willingness to absorb losses as a strategic rather than commercial calculation, can. The longer the conflict runs, the more that gap pushes Western capital out and consolidates Chinese control over what is becoming a critical mineral chokepoint.

What Washington Should Do

Balochistan illustrates a basic problem with mineral wealth: it generates conflict as readily as it generates income, and investors who only look at deposit size are missing the question of who actually controls the ground beneath them. China holds an advantage here because state-owned firms can absorb losses28 that would sink a public company, while Western capital retreats by market logic alone. That gap is closeable. Washington could expand a U.S. International Development Finance Corporation29 co-investment structure that backstops private capital in high-risk environments, mirroring how Chinese policy banks backstop their own state firms, without taking on the legitimacy costs of competing directly with Beijing's model. Washington has already taken a first step: in February 2026 the DFC committed $1.3 billion to Reko Diq under its Project Vault initiative30, though that single commitment is a down payment, not the kind of standing backstop that would change Barrick's calculus. A parallel option is G7-coordinated political risk insurance31 for private mineral investment, similar to existing Multilateral Investment Guarantee Agency32 coverage, spreading the cost of risk across allies rather than leaving it to a single company's balance sheet.

Either approach beats the alternative of simply ceding Balochistan to Chinese capital by default. But Washington should also recognize when a fight isn't winnable on current terms: redirecting some Western investment toward lower-risk mineral corridors, such as Zambia33 or Canada's Ring of Fire34, may do more for supply chain security than continuing to bid for ground in a province where China can absorb risk that Western firms cannot. The imbalance in Balochistan was created by those who can afford to lose money there. Closing it will take a Western answer to that same question, not just better intentions.

Notes & References