Karakoram Highway Pakistan’s route to successful trade
The foreign policy of the People’s Republic of China has been crafted to maximise gains from globalisation and industrialisation and quicken the pace of economic development by interlinking the domestic and world markets.
In the current strategic jargon, the Karakoram Highway is viewed as a window for China overlooking southern Asia. Pakistan and China remained engaged in the qualitative up-gradation of the PakistanChina road link with agreements worth $327 million, under the tenure of Salman Bashir, the Ambassador of Pakistan to China until 2008. In 2011, the Pakistan government approved Rs. 25 billion for the expansion of the Karakoram Highway.
The expansion plan of the Karakoram Highway is a reflection of its strategic and commercial importance for Pakistan. The road will be expanded to four lanes from the existing two by the National Highway Authority. With funding from the Asian Development Bank, upgradation of the highway will enable Pakistan to play a central role in regional transit trade.
Other countries, Nepal in particular, support the expansion of the Asian highway to increase economic activity in Nepal and Pakistan. Nepal holds the view that Pakistan has the potential to link the South Asian countries through the Karakoram Highway with China and beyond into the East. Nepal anticipates a pivotal role for Pakistan in the emerging geo-economics of the South Asian region. For this reason, the country is willing to deepen bilateral relations with Pakistan in the fields of agriculture, energy, environment, science and technology, IT, education, culture and public diplomacy.
In addition, Kyrgyzstan is also in negotiations with China and Pakistan over establishing direct road links through the Karakoram Highway for further improving trade relations. In a meeting between the Kyrgyz Ambassador, Bektur Asanov and businessmen at the Islamabad Chamber of Commerce and Industry (ICCI), the fact was highlighted that direct communication channels would increase bilateral trade by ten times between Pakistan and Kyrgyzstan. The ambassador also referred to the popularity of Pakistani textile products and invited local businessmen to set up textile industries in Kyrgyzstan.
The expansion of the Karakoram Highway will be followed by China’s efforts to expand its strategic footprint in the region. China has been working to intensify the development of trade in South Asia for some time now. For example, the country has built ports at strategic locations in Sri Lanka, Bangladesh, Pakistan and Burma. At the same time, the Karakoram Highway has also become a central focus of attention for the South and Central Asian countries aiming to achieve trade expansion with China.
China is busy in strengthening ties with the South Asian countries by being involved in a trilateral project of road and rail link with Bangladesh and Burma, whereas both Bangladesh and Sri Lanka are willing to become trans-shipment hubs in South Asia. Bangladesh hopes to become a hub for goods bound for Nepal, Bhutan and Northeast India. In addition, China is planning to construct a deep-sea port at Sonadia Island. Along with protecting its lines of communication over sea, China is deeply interested in securing overland access routes to these ports.
China’s economic growth is dependent on its export performance and constitutes about 40 percent of its GDP. It is, therefore, understandably keen to explore and expand markets for its products. Despite its rivalry with India, the country with a population of more than a billion is a huge attraction for China. The private sectors of both the countries have entered business deals worth nearly $16 billion. The Chinese Prime Minister Wen Jiabao, while in discussion with his Indian counterpart Manmohan Singh, said that India and China should open their markets to each other to give support to mutual economic growth. Jiabao suggested that China and India have a different mix of industries, products, technologies and expertise, so they could be more beneficial for each other.
Chinese diplomacy should be a realistic model for Pakistan for maintaining bilateral relations with the South and Central Asian countries, along with playing a central role in regional trade. The Karakoram Highway is a valuable asset of Pakistan which it should harness to achieve strategic importance in the region