Empire by stealth

China an ‘empire by stealth’, grows by exploiting economic benefits proportional to politically weak Pakistan.

Any ordinary resident of Islamabad can’t miss noticing the rising Chinese presence in the capital city. In fact, Chinese have begun to appear in most Pakistani towns, which was never the case. The fact is, China is expanding and is now at our doorstep. Afghanistan, and certainly Pakistan, is China’s sphere of influence in South Asia. The only question is whether we will become China’s Israel or Somalia. Ultimately, it is an issue of what Pakistan can also extract from the relationship.

The increase in manpower mentioned earlier indicates the expansion of the Chinese corporate sector in the Pakistani market. It is indeed a terrific opportunity for the Chinese to come and operate in a friendly market like Pakistan, where the government does not really put any real pressure on Chinese companies to increase transfer of technology or hire local people. What these companies usually do is that they bring most of their technical manpower from China and only recruit the lower staff from the host market — this means only jobs for the unskilled are created in Pakistan.

But Islamabad doesn’t object because Beijing muffles voices with a lot of greenback and also because of the traditional Pakistani perception of China being a strategic ally. Historically, Beijing served as a major supply source for weapons to Pakistan. Whenever faced with an American arms embargo, Beijing was the other alternative. In fact, the popular imagination of China dates back to the 1965 war when the Chinese government was most generous with military assistance. So now that China has turned into a financial giant, Islamabad’s expectations are even greater.

Surely, Pakistan can benefit tremendously as long as it doesn’t forget some fundamental lessons of history and has a sense of its ally’s strategic direction. For starters, one must not forget that free assistance from China stopped after 1979 when Beijing changed its strategic direction from military expansion to economic expansion. Prior to 1979, Pakistan was the largest non-communist recipient of Chinese aid that dried up with the change in Beijing’s policy. This attitude has continued and China is not keen to throw away its money until the recipient, even though it may be an ally, does not ‘clean up its backyard’.

Second, Afghanistan and Pakistan are critical to Chinese interests not just in terms of Beijing’s competition with other regional players like India but also to dominate regional resources. Pakistan falls in the belt of the ‘Tethyan Magmatic Arc’, which extends from Mongolia to Pakistan to Turkey and carries minerals like copper, gold, zinc, lead, iron ore, aluminium etc. Copper, for instance, is a critical mineral required for industrial development. Hence, the Chinese interest in Saindak, Reko Diq and other projects. There is, in fact, sufficient evidence to suggest that Chinese firms have been elbowing their way into the Pakistani mineral market. Thus, the Saindak project was awarded to a Chinese firm due to governmental intervention much after a reputed Australian company, BHP Billiton, won the bid. However, the Chinese government expressed its interest in 2001 in securing the rights to Saindak. Later, a similar interest was expressed in Reko Diq, which may explain the reason for the Pakistan government wanting to renegotiate the contract. Transparency International Pakistan recently detected illegality in the awarding of contracts for the Kohala hydropower project and Bunji dam to two Chinese companies, with loss to the exchequer. These two projects were awarded in contravention of PPRA (Public Procurement Regulatory Authority) rules, basing it instead on the MoU signed by the Pakistani prime minister and awarded to the Chinese without any open bidding.

It’s not just simply about the greed of the corporate sector but also about the ambition of a regional power to expand its influence with minimal cost. China is an ‘empire by stealth’, growing steadily without necessarily taking on the sociopolitical or economic liabilities of its client states. The enhancement of exploitation or economic benefits is proportional to the political weakness of a client state.

Pakistan should not even aim for passing on its liabilities to China or any other country. However, any gains are proportional to clarity of perception, honesty of purpose of its policymakers and capacity. It doesn’t take a rocket scientist to figure out that countries with problematic ruling oligarchies offer greater potential for the powerful player in the relationship. Ultimately, do we want to have a link with China as we did with the US?

Published in The Express Tribune, November 13^th, 2011.