China and Pakistan are redefining their ties. The consideration at the highest political, military and institutional level to ensure that the all-weather friendship flourishes is its strength. This is, perhaps, one of the rare examples in the Westphalian context that the state-centrism is indifferent of political swings, and the cordiality, conformity and credibility lives on without any botheration for upheavals around it in the region and beyond.
Beijing and Islamabad took a leap forward as they reiterated the passion to keep going, and build a better future: bilaterally and regionally. The Fifth round of China-Pakistan Strategic Dialogue co-chaired by Deputy Prime Minister and Foreign Minister Senator Ishaq Dar and the Member of the Politburo of CPC Central Committee and Foreign Minister Wang Yi in Beijing underscored the irresistible reality that there is no spanner in the works, and the exercise by vested interests of making a mountain out of a molehill is nothing but propaganda.
This is so because a lot of water had passed under the bridge as non-state actors through their nefarious activities had made it a point to dent the relationship. The terrorist acts in Balochistan, Khyber-Pakhtunkhwa and other restive areas where Chinese personnel were involved in construction activities were off and on attacked, and made to bleed. But it goes to the resilience of the Chinese that they kept their cool, as well as their heads down, and did not get distracted. It is an exceptional duty and commitment that just days after any of the unrest and bloodshed, such as in Dassu and Quetta, they returned to work with a new resolve for the day.
Thus, the Beijing moot in May 2024 made it a point that Dar and Wang mustered the courage and conviction to admit that there are issues in the security paradigm, but the focus on development is undeterred. They went on to review the entire gamut of bilateralism in their spread-over parleys, and it was startling to note that they came out with a more upgraded package of reforms, conducive to the need of the hour.
This is the new phenomenon of Sino-Pak vitality. It touch-bases geo-economics and is quite conscious of somersaults in geopolitics. The good point is that each and every aspect of bilateralism when seen from the prism of regionalism boils down to congeniality. Both are wary of extra-territorial forces increasing their influence in the region, and at the same time are prepared to deal with the centripetal and centrifugal forces in the relevance of laws of kinetics.
Both the states harness a consensus that the United States’ meddling is there to stay, as well as the Indian intention to play foul on the premise of its hegemonic designs, and the only option is to engage it without jeopardising the affinity in their bilateral ties. This is unprecedented wisdom and speaks volumes of their trust in road-mapping multilateralism.
It is again no surprise that Pakistan has shunned the notion that it is in camp politics. The policy perspective is purely state-centric, and China and Pakistan have pronounced that they are indifferent to Sino-US confrontation in trade and politics, and at the same time Beijing is not concerned over the allied-ally status that Islamabad has nursed with Washington.
Dar rightly invited the Chinese entrepreneurs to establish labour-intensive industries in Pakistan, in an endeavour to attract foreign investments. By listing out the excelling confidence that bourses are witnessing in the last few weeks, and also making it a point that the country’s economic volume is more than $350 billion, the deputy PM showcased as to how a market of 245 million people will open up for China.
Pakistan’s formal economy being $340 billion and informal economy $457 billion makes it close to one trillion dollar economy. It also goes without saying that Pakistan is in the collage of 10 biggest economies, and it could stake its claim for G20 too. But the lack is in its industrial profile, and the regrettable fact that a major chunk of its performing economy is informal, and out of the national audit database. This also underscores the need for reforms, and that is exactly what the political dispensation had been advocating under the banner of Special Investment Facilitation Council (SIFC) in luring big-ticket businesses.
The huddle, which also saw Chinese banking wizards and politburo wheelers-and-dealers come together, agreed to speed up the setting up of, at least, nine industrial zones, known under the CPEC nomenclature as Special Economic Zones (SEZs). What ails their setting up to this day has a story of trial and tribulation, primarily owing to inadequate crosscurrents in the region, and the distraction that Pakistan met with in making it an institutional approach.
This was altogether important because SEZs are at the heart of Chinese investment, as they plan to produce and market cheaper goods by making use of road infrastructure and energy projects that the first phase of CPEC saw come full circle in solemnity.
While CPEC has moved into the second decade of progress and this phase concerns industrialisation and mass production, there is no going back on it. The second phase has five corridors namely growth, innovation, open, livelihood and green economy.
Pakistan also made it clear that attractive incentives are there to establish different industrial units, and inflow of Chinese money and technology does not fall under the purview of monitoring and vetting of western-donor agencies. It is a tribute to bilateralism that CPEC has survived the disgust and enmity that it met with on the part of capitalist profiles.
During the Strategic Dialogue, it was pointed out that 13 key areas for incoming entrepreneurs to establish industry on ownership basis or through joint ventures have been figured out. They range from industry to agriculture, mining to petro-chemicals, and minerals.
It is worth eulogising that commercial activities are on the rise, and a free trade agreement has been signed. Likewise, the level of cooperation in the defence and technology domains is at an all-time high, acting as a catalyst in building state-of-the-art infrastructure under the CPEC domain. The Dialogue also underlined the need for continued high-level exchanges and to kick-start more forcefully a bilateral consultative mechanism.
The $60 billion investment under the Belt and Road Initiative (BRI) blessed Pakistan with CPEC, and that forms the lifeline of the embattled economy. The CPEC money came at a time when Pakistan was at the verge of default, and no international lender was willing to buckle its economy even on stringent conditionalities.
Keeping in view the change of mosaic that Pakistan had attained in the infrastructure and power projects, it was agreed in Beijing to deepen and substantiate China’s eight major steps to support BRI. Islamabad coined the term of an “upgraded version” of CPEC by jointly bolstering corridors under the templates of growth, livelihood-enhancing, innovation and green corridors by aligning them with Pakistan’s domestic development framework.
Some of the major landmarks are progress on major connectivity projects, including upgradation of ML-1, the Gwadar Port and realignment of Karakoram Highway Phase II. Moreover, industrial parks, modernised farming mechanisms, mining and information technology are other arenas where small-scale entrepreneurs will be encouraged to turn around the clock of the economy. It may be mentioned that Pakistan is rich in not only minerals and precious stones but also has a vibrant and insolvent tech-industry.
Making logistical efforts to keep open the snow-capped Khunjerab Pass for at least eight months, and regulating formal trade convoys across the divide are promotional incentives, along with more people-to-people exchanges through the world’s most picturesque terrain.
Coordinating in the financial theatre by opening up their trade in local currencies is a major milestone of understanding. Enhancing banking cooperation is the need of the hour, and it is hoped that more Chinese banks will come in to finance small-incentivized projects that are export-based on concessional loans at low interest rates. Similarly, projects involving energy, wind, solar, hydro and coal-power, as well as modernisation of airports and harbours, are salient points of consensus.
In the defence sector, the ties are strategic in essence. China is Pakistan’s most pivotal defence partner since the end of the Cold War, and is a leading supplier of conventional weapons, with higher-end offensive strike capabilities. An increasing role in upgrading naval access into wartime contingency, apart from maritime commercial vessels, is worth appreciating.
It is a convention, of late, that the top military brass of both the countries rub shoulders at the Pakistan China Joint Military Cooperation Committee (PCJMCC) forum, and the multi-facet relations have hit new bona-fide marks in defence and economic horizons. Perhaps that is why the $60 billion CPEC investment is Pakistan’s turning point, and is a thorn in the eyes of those who do not wish to see geo-economics flourish. Moreover, Beijing is the biggest armament supplier for Pakistan, with the latest addition being J-10 fighter jets.
This qualitative transformation of bilateral ties along with increased inter-dependence in realpolitik has led them to work for regional peace and stability. Afghanistan tops their agenda, and both are in a trilateral dialogue to harness stability in the landlocked country. Likewise at multilateral forums, including the United Nations and Nuclear Suppliers Group (NSG), their traditional strategic cooperation is on the rise.
The fifth Strategic Dialogue also had a first of its kind jubilation as on May 3 a lunar expedition was launched in collaboration with China, and Pakistan sent its debut satellite to orbit the moon. Launched from Hainan, the lunar mission named Chang’e-6 is intended to explore the moon’s dark side. Pakistani invented I-CUBE Qamar satellite is part of a multinational research payloads rotating the South Pole.
This is a gigantic breakthrough, and the cooperation should go on to build a credible database and kick-start new innovations in space technology. Taking into account the bias and sanctions from the Western states, Pakistan should replicate a North Korea-style learning process from China to reorient its scientific excellence.
Sky is the limit in tapping China to its maximum. Having agreed that Pakistan shall not boast camp-politics, China remains indispensable. The neighbourhood, the fondness and the treasure-trove of history wherein Pakistan was the sole route to the then Peking-Communist China to peep into the world at large remains a valuable nostalgia.
There was a time when it was only PIA that linked the Chinese up to the world, as they used to travel to Europe, Mideast and the United States through Karachi. It is noted with admiration that Chinese officials were fond of getting their business suits stitched in Karachi, as they then even lacked that luxury. That is why the Nixon-Deng Xiaoping diplomacy routed through the mountains of Galiyat in the then NWFP under the auspices of Pakistani diplomacy has come a long way.
Pakistan’s endorsement of One-China Policy, and its efforts to broker recognition of China by the United States is a golden arc of time-tested relations. Today, China is apparently returning the favour by standing fast with Pakistan, and there is no two-opinion over it.
The way ahead
The need is to ensure that the second phase of CPEC sees industrialisation take root and the GDP-to-production ratio surpasses 51 per cent. The nine SEZs must swing into action by 2026, enabling China to move its technology and production plants to Pakistan. What was Philippines to the US in terms of out-sourced production of American brands for cheap labour should be Pakistan for China.
People-to-people contact is at its lowest ebb. This needs special attention, and the process of visa for businessmen, academicians, technology experts and students, apart from leisure travellers, must be streamlined and made a one-window operation. The present visa regime is unbecoming of their friendship, and needs amends. Similarly, the Khunjerab-SOST mountain-way must be a zone of free intermingling for visitors from both the countries, smoothening on-arrival visas to genuine expeditors.
Trading in Yuan and Rupee is indispensable, and that is how volume of commerce can be soared, and the hegemony of the US dollar be browbeaten. This will help in furthering more financing incentives by local banks and short-credit investment portfolios.
Teaching Chinese language as a subject at schools and colleges should be made compulsory so that basic understanding of dialect and conversation is made easy. This will open vistas of educational opportunities, and China could turn out to be the next Oxford and Cambridge for Pakistani scholars. Resourcing to the Chinese module of vocational training is the way to overcome unemployment, and build a rock-foundation of skilled human talent.
Pakistan’s seven decades of honeymoon with the West has led it into a debt-trap, and the relationship is devoid of technology transfer. It has bred discontentment, despite capitalism being the buzzwords. More than 55 per cent of the populace is under the poverty line, and Pakistan is at the brink even after nodding to the dictation of western lenders. This vicious circle must come to an end. Pakistan must replicate the Chinese success of pulling out more than 700 million people out of the abyss of poverty, and building a vibrant society free from the concerns of food, health, accommodation and security. Time to walk the talk and set in social mobility.
Ishtiaq Ali Mehkri is a senior journalist and analyst
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