Peace through in­formed dia­logue

The Diplomatic Insight - - Front Page - *Dr Ah­mad Rashid Ma­lik

De­fense and eco­nomic ties with the US

China is Pak­istan’s most trusted ally. The re­la­tions were con­tin­ued to grow in spite of the Cold and post-Cold War per­cep­tions. Pak­istan made enor­mous ef­forts to end the in­ter­na­tional iso­la­tion of the Peo­ples Repub­lic of China through­out in the 1950s and 1960s. Over the years, the re­la­tion­ship has be­come a mu­tu­ally other’s needs in dif­fer­ent geo-strate­gic sit­u­a­tions. Within a short span of time, China has emerged as the sec­ond largest global econ­omy. Pak­istan could over­come its myr­iad eco­nomic woos with the help of China. Since the 1990s China has been emerg­ing as an im­por­tant pil­lar of Pak­istan’s for­eign pol­icy es­pe­cially pri­or­ity. Now de­fense and eco­nomic its ties with the United States. Bei­jing even re­placed Riyadh some­time ago in Pak­istan’s for­eign pol­icy pri­or­i­ties. New lead­er­ship has as­sumed power both in Pak­istan and China. The Chi­nese Pre­mier Li Ke­qiang has al­ready un­der­taken the visit to Pak­istan on May 22-23 and ex­changed views with the new Pak­istani lead­er­ship. Prime Min­is­ter Mian Muhammad Nawaz Sharif will also meet Chi­nese Pres­i­dent Xi Jin­ping and Pre­mier Li Ke­qiang on his present tour. Min­is­ter Sharif to China com­menced on July 4 is im­por­tant from the point of June. He has come into power af­ter 14 years. Be­sides Bei­jing, the Pak­istani prime min­is­ter will also visit Shang­hai and Guangzhou. High level ex­changes are reg­u­lar fea­ture of the Sino-Pak­istan friend­ship since the 1950s. The Sino-Pak­istan re­la­tion­ship is a vast strate­gic and ex­panded eco­nomic part­ner­ship, which has been de­vel­oped both sides. The Gwadar Port was handed over to the Chi­nese Over­seas Port Hold­ing Com­pany (COPHC) in Fe­bru­ary. The present govern­ment will con­tinue to honor the agree­ment. Dur­ing the prime min­is­ter’s visit many agree­ments are sup­posed to be inked in the Gwadar con­text alone par­tic­u­larly de­vel­op­ing a trade cor­ri­dor by link­ing it to Kash­gar in the Xin­jiang Uygur Au­ton­o­mous Re­gion. ‘The cor­ri­dor would change the fate of the re­gion’, to quote Prime Min­is­ter Sharif be­fore the visit.

The cor­ri­dor would pro­vide al­ter­na­tive route to Chi­nese busi­ness by short­en­ing the dis­tance to 2500 km. The Ara­bian Sea-South China Sea dis­tance is over 16,000 km. In­dia has been show­ing con­cerns as the cor­ri­dor would pass on the Kash­mir side of Pak­istan. The Prime Min­is­ter’s del­e­ga­tion in­cludes Chief Min­is­ter Balochis­tan Dr Ab­dul Ma­lik Baloch that rep­re­sents peo­ple’s man­date for greater Chi­nese co­op­er­a­tion with the prov­ince of Balochis­tan. The min­is­ter for plan­ning and de­vel­op­ment Ah­san Iqbal and ad­vi­sor to the prime min­is­ter on for­eign af­fairs Tariq Fa­timi were also in­cluded in the 11-mem­ber del­e­ga­tion. Apart from the Gwadar con­text, a large room ex­ists to in­vite Chi­nese ex­per­tise in en­ergy sec­tor es­pe­cially gen­er­at­ing coal-based and al­ter­na­tive en­ergy. Hope many pend­ing mat­ters con­cern­ing the gen­er­a­tion of coal­based en­ergy will be re­solved dur­ing the vis­its. Pak­istan has been fac­ing a chronic elec­tric­ity short­age reach­ing 5,000 mw in sum­mer. Growth and in­dus­try has been badly suf­fer­ing. It is ex­pected that agree­ments re­lated to en­ergy co­op­er­a­tion will lead all other agree­ments for co­op­er­a­tion dur­ing this vi­tal visit. Prime Min­is­ter Sharif has al­ready en­cour­aged the state-owned China North In­dus­tries Cor­po­ra­tion (NOR­INCO) to in­stall so­lar power plants, look into min­ing, ex­plore iron ore, and un­der­take train sub­way net­works in Pak­istan’s metropoli­tan cities. The Chi­nese co­op­er­a­tion in build­ing mo­tor­ways and rail­way net­work would be a re­sound­ing col­lab­o­ra­tion. Mor­inco is an­other Chi­nese joint ven­ture to build so­lar-based en­ergy sys­tem in Pak­istan. The Pun­jab govern­ment has al­ready in­vited the Chi­nese com­pany to work on the Nandipur and Chichun ki Malian hy­dro projects that were de­layed by the pre­vi­ous govern­ment. The cost of th­ese projects has risen to Rs57 bil­lion from Rs22 bil­lion. Bi­lat­eral trade be­tween Pak­istan and China has some se­ri­ous is­sues that must be mu­tu­ally re­solved in­clud­ing tar­iff on im­ports by China from Pak­istan. Trade be­tween Pak­istan and China is hov­er­ing around US$ 12 bil­lion, which makes Pak­istan China’s sec­ond most im­por­tant trad­ing part­ner in South Asia af­ter In­dia. Trade is ex­pected to touch down the level of US$ 15 bil­lion in the next cou­ple of years. How­ever, in China trade is quite mea­ger, which needs to be im­proved fur­ther. A Free Trade Agree­ment (FTA) has al­ready been in prac­tice and a Cur­rency Swap Agree­ment (CSA) has just been signed to bol­ster mu­tual trade ahead of Pre­mier Ke­qiang’s visit. There is also a need to lower down Pak­istan’s which has been mount­ing quite high. It is reach­ing over US$ 10 bil­lion. Some sec­tors of Pak­istan’s econ­omy have badly suf­fered due to FTA. Th­ese are pa­per, pa­per­board, and ce­ram­ics. China is com­pet­i­tive in th­ese sec­tors. Th­ese is­sues should also be ad­dressed. China has to buy more from Pak­istan to cor­rect this im­bal­ance. A trad­ing State of Pak­istan needs to emerge in which China could play the lead role. * The writer is Se­nior Re­search Fel­low at the In­sti­tute of Strate­gic Stud­ies Is­lam­abad.

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