President Zardari’s China trip

The only leader who seems to have an understanding of the need for strengthening economic ties with China is Zardari.

President Zardari’s visit to China must be used to strengthen bilateral trade and economic relations with Beijing. Post-Zulfiqar Ali Bhutto, the only leader who appears to have a fair understanding of the need for strengthening economic ties with China is Zardari. To maintain economic and strategic connectivity with South Asia, China requires a safe passage through Pakistan. This has acquired greater relevance after China became the second largest importer of oil in the world. On the strategic front, the Chinese dream of getting a foothold in the Indian Ocean, without having an aircraft carrier, is being fulfilled with the development of the Gwadar port.

Pakistan, since the 50s, has enjoyed an excellent relationship with China. There was, however, no concrete plan to transform this relationship to a binding economic friendship. Our annual export target can easily match the exports of any medium-sized Chinese corporation. And that leads us to see the potential this friendship offers. Our gains are small given the opportunities that exist. China’s economy is poised to surpass that of the US by 2025-30. Pakistan must up its economic relations, already a lot of ground has been lost.

China is not one of Pakistan’s major export markets, it does not even figure in the list of top 10 export destinations. However, as regards imports, China has become one of the top five import sources of Pakistan. China supplies the bulk of cheap commercial goods all over the world and for Pakistan as well, despite a common preference for western goods in Pakistan’s market.

The Foreign Office in Islamabad needs to focus its policy strategy towards China. It is imperative for Pakistan to engage with Chinese political and economic leadership at all levels. President Zardari’s visits are small steps towards that purpose, but these need to be supplemented by joint ventures in the economic arena. Many a project with China have disappeared in the ruins of Islamabad’s bureaucracy — Saindak and the Thar Coal Project being cases in point.

President Obama’s preferred visit to India, in total disregard to us being their ally in the war against terror, should serve as jolt for our policymakers to look at the east for economic growth. Our political system, despite its flawed contours, can succeed only if we strengthen our masses economically.

We cannot undermine the formidable Chinese foreign exchange reserves, skyrocketing at $1 trillion, which should ring gigantic alarm bells in our leader’s heads telling them that they need to capitalise on this vast bank of resources. This can be done by encouraging the establishment of Chinese assets in Pakistan in the capacity of investments of Chinese corporations and the establishment of financial institutions to allow the banking industry to flourish.

President Zardari, besides being politically bright, has a keen business acumen which he must bring to full use during the Asian Games visit and induce Chinese investment into Pakistan.

Published in The Express Tribune, November 13^th, 2010.