China’s already spending billions on overseas investments. Does it need to fund security, too?

Initially, Pakistan and China had released conflicting statements over the cause of the incident. Islamabad blamed a gas leak caused by mechanical failure, while the Chinese Foreign Ministry called it a “bomb attack,” expressing “shock and condemnation” and asking Pakistan to “severely punish” the perpetrators. The discrepancy raised confusion — and anger — on Chinese social media, with some accusing Pakistan of “covering up” the truth.

Then, in an apparent twist on Thursday, Pakistan’s Information Minister Fawad Chaudhry said on Twitter that “terrorism cannot be ruled out,” after initial investigations confirmed “traces of explosives.” By Friday, Chinese Premier Li Keqiang was describing the blast as a “terrorist attack” in his phone call with Pakistani Prime Minister Imran Khan — which Chinese state media took as a confirmation from both sides on the nature of the incident.

Will Beijing one day be forced to deploy its own defense assets overseas to protect those citizens and enterprises?

The bus explosion is among the deadliest attacks on overseas Chinese nationals in recent years. Faced with rising nationalism at home, and increasing geopolitical tensions abroad, Beijing will need to show that it is serious about protecting Chinese citizens without damaging relations with Pakistan, one of its few close allies.

Speaking to his Pakistani counterpart, Li urged Islamabad to “use all necessary means” to investigate the attack and hold the culprits accountable, and “do its utmost to prevent similar incidents from happening again.” He also underscored the “all-weather” strategic partnership between the two countries, and vowed to strengthen cooperation.

But the incident has highlighted the vulnerability of Chinese projects in Central Asia, the number of which has boomed in recent years under Beijing’s ambitious Belt and Road trade and infrastructure scheme.

Under specific threat is the China-Pakistan Economic Corridor (CPEC), a $60 billion Belt and Road flagship project that links China’s western Xinjiang region to Pakistan’s strategic Gwadar port on the Arabian Sea with a network of roads, railways, pipelines and power plants.

Chinese-funded projects have sparked resentment from locals in parts of Pakistan, who say they have benefited little from the developments. The anti-China sentiment is particularly strong among separatist groups in Balochistan, a western province where the Gwadar port is located.

The security situation could worsen in the coming months as Pakistan braces itself for a spillover of violence from neighboring Afghanistan, where the Taliban is taking control of great swathes of the country following the withdrawal of American troops.

As of now, Beijing has been mainly relying on Pakistani security forces — consisted of thousands of soldiers and police officers — for the protection of Chinese nationals and projects. But increasingly, Chinese businesses with risky investments could be turning to China-based private security companies for protection, too.

Around Asia

Photo of the Day

Ping pong diplomacy: Chinese table tennis player Liu Shiwen arrives at Japan’s Narita International Airport over the weekend. China is sending 431 athletes to the Tokyo Games as part of a 777-member delegation, its largest dispatch to an Olympics outside China.

China’s national carbon market kicks off

The world’s biggest emitter of greenhouse gas pollution launched the world’s largest carbon trading market last week.

This long-awaited program is a key step in China’s efforts to reduce its carbon emissions. The market works this way: the government gives every company the right to emit a certain amount of carbon dioxide each year. If you emit less than that, you can sell excess allowances, or “the right to pollute,” on the market. If you need more than that, you can buy extra from the market.

On the first day of trading on Friday, 4.1 million metric tons of carbon dioxide quotas traded on the Shanghai Environment Energy Exchange, worth $32 million. Compared to China’s overall emissions, the trading volume was small, but it’s “an encouraging step forward,” said Betty Wang, senior China economist for ANZ Research, in a research report on Monday.

The market is currently the world’s largest emissions trading scheme by volume, according to analysts from Eurasia Group. At the initial stage, it covers more than 2,000 power plants with 4.5 billion metric tons of emissions per year, or about 40% of China’s annual emissions.

According to China’s 14th Five Year Plan — a policy blueprint for the 2021-2025 period— the system’s coverage will be extended to seven other sectors by the end of 2025, including petrochemical, chemical, construction, and steel. By then, it may cover 8 billion metric tons of emissions per year.

But given that the market covers only the power sector for the moment, “it remains to be seen whether such initial enthusiasm will persist and how long it will take before the trading volume and market liquidity reach the level at which the ETS can be an effective instrument for achieving China’s climate ambitions,” analysts from Eurasia Group said in a report over the weekend.

“More work must be done,” they said, such as releasing new regulations to govern the scheme and verifying the emissions data submitted by firms.

China is currently the world’s largest carbon emitter. In the year ending March 2021, it emitted nearly 12 billion metric tons of carbon dioxide, according to an estimate by Carbon Brief. Chinese President Xi Jinping has pledged China would achieve carbon neutrality by 2060, and to peak carbon emissions by 2030.

— By Laura He