EDITOR-IN-CHIEF
No power can hold another nation, and specially a nation of 400 million souls, in subjection. Nobody could have conquered you, and even if it had happened, nobody could have continued its hold on you for any length of time.’’ These were Mohammad Ali Jinnah’s words to Pakistan’s Constituent Assembly on August 11, 1947. I wonder what he’d have made of Pakistan now as it becomes dependent on China economically and militarily. These days you don’t have to conquer anyone physically, it is sufficient to make them a vassal state. Even more dangerous as it’s difficult to reverse.
China is currently Pakistan’s largest trading partner, with bilateral trade rising threefold from around $4 billion in 2007 to $13.7 billion in 2015-16, accounting for one-fifth of total trade. China has emerged as Pakistan’s biggest source of foreign direct investment, accounting for around half the still very low $2 billion annual FDI in 2015-16. More than that, China supplies over 60 per cent of Pakistan’s military hardware, practically taking over the Pakistan navy. China is also using its typical strategy of building a ‘friendly’ nation’s infrastructure—more than $11 billion has been pledged under the China Pakistan Economic Corridor (CPEC) to upgrade the country’s crumbling roads, with a further $35 billion on energy projects, besides plans to invest in mining and even in agriculture.
Today, Chinese companies are constructing and managing the country’s key transport networks, from national highways to Lahore’s metro. China is building Pakistan’s power sector, coal plant by coal plant, and will eventually, many experts believe, have a say in how much Pakistani citizens pay their government for electricity. Under the CPEC plan, thousands of acres of Pakistani land will be transferred to Chinese companies that will grow crops on Pakistani soil, build meat processing plants and develop free trade zones. Chinese garment factories will, en masse, be transferred to Pakistan, while China will manage and run tourism projects and special economic zones along the southern coast, with rather ambitious plans for even yacht clubs and hot spring hotels to develop an unlikely tourism hub in the restive Balochistan province.
China is aware that a lot can go wrong with this ambitious economic blueprint for one of the world’s most volatile regions. Apart from Pakistan’s unpredictable domestic political environment and ‘ethnic and provincial conflicts in Punjab, Sindh and Balochistan’, there are also financial risks. Chinese assessments suggest the $46 billion figure Pakistani officials regularly cite may not materialise because Pakistan’s economy cannot absorb FDI much above $2 billion per year without causing stresses in its economy. There are corresponding fears in Pakistan that it may become China’s 34th province. It may have to pay $3 to $3.5 billion annually back to China for the next 30 years for Chinese loans after 2020, to avert a probable severe balance of payments crisis.
The cover story, authored by Beijingbased Associate Editor Ananth Krishnan, shows how Pakistan is emerging as a key strategic ally that gives China much-desired access to the Indian Ocean and a perch from which it can keep India in check. For Pakistan, China’s billions are being seen as the best bet to keep afloat an economy and state that appear to be permanently on the precipice, especially as Donald Trump’s America closes its wallet. India needs to be worried for various reasons. It has doggedly rejected third-party mediation on Kashmir, and the CPEC passing through territory it claims in PoK willy-nilly makes China a party to the dispute. That’s the reason India boycotted China’s One Belt One Road initiative, in which CPEC is a flagship project. The two fronts, China and Pakistan, could be merging into one giant South Asian firewall around India. The fact that China is showing its teeth to us on the Bhutan border may be a harbinger of the future. Pakistan, re-armed with Chinese military hardware as also a base in Gwadar, which puts the PLA navy in India’s backyard and astride its energy supply lines from West Asia, could be an extremely dangerous enemy. The containment of this axis should be a top priority of our foreign policy.