Sino-Pakistan trade corridor: A regional ‘game changer’

By: Haroon Baloch

Chairman Pakistan-China Institute, also an active legislator in upper house of Pakistani Parliament, Senator Mushahid Hussain Syed stressed Pakistani leadership to join international community’s bandwagon, especially the deeds of China if development is its desired outcome.

Economic cooperation between China and Pakistan, the two time-tested friend countries, do not reflect the true nature Sino-Pakistan ties. Bilateral trade between the both nuclear powers is not more than 13 billion USD with Pakistan’s exports to China slightly over 3 billion UDS. The volume of its imports abuts 10 billion USD, which shows a clear trade imbalance.

Both the countries have extensively cooperated in the defense sector. JF-17 Thunder fighter jets and modern tank technology like Al-Khalid are results of this cooperation. Pakistan is also a client of Chinese missiles, flight system, radars and satellite.

Former Air Chief Marshal, Pakistan Air Force Rao Qamar Suleman, in an interview in 2011 during his tenure (2009-2012) said Pakistan seeks stronger defense cooperation with its friend and neighbor China to help upgrade the defense systems.

Similarly, China is playing a vital role in developing infrastructure in Pakistan. It constructed Karakorum Highway, the only road link that connects Pakistan with China. China has also provided technical and material assistance for the execution of Chashma Nuclear Power Plant. In up-gradation,

Pakistan has established four nuclear power plants, which are generating around 800 Megawatts electricity contributing to its economy. Viewing Pakistan’s increasing energy needs, especially in a time when country is fighting the global war against terrorism and its economy has suffered a loss of 90 billion USD, China has committed to build energy infrastructure.

Newly elected government of Pakistan Muslim League Nawaz, Prime Minister Muhammad Nawaz Sharif after assuming charge of his office in June 2013 decided to pay his first state visit to China, reciprocating his Chinese counterpart Li Keqiang’s first visit to Pakistan in May 2013. During Nawaz’s visit to Beijing, leadership of both the countries have signed Memorandum of Understanding (MoU) to establish Sino-Pak Economic Corridor to foster trade and investment bonds and opening new chapter of economic activity in the region.

Prime Minister Nawaz Sharif termed this development a ‘game changer’ and apprised that Kashgar, a southern Chinese city will be connected to Pakistan’s port city Gwadar through road and rail routes. Further explaining the scheme, Pakistan’s Planning and Development Minister Ahsan Iqbal told journalists that China will establish industrial zones in Pakistan and its products will be supplied through Sino-Pak Economic Corridor to rest of the would including South and East Asia, Middle East, Central Asia and Europe.

Earlier, this year when Pakistan handed over the Management of Gwadar port

to Chinese authorities, Pakistan’s eastern neighbor India expressed its grave concerns over the development. Indian Defense Minister A. K. Anthony asserted, “it is a matter of concern to us.”

India believes the port close to the Hormuz Strait opens up an energy and trade corridor from the Gulf across Pakistan to Western China. China can also establish its naval base in the town despite China’s stance that Gwadar is a commercial project and part of Sino-Pak long-standing bilateral cooperation.

Pakistan’s Foreign Office official had reciprocated as saying India must have nothing to do with whoever it decides to work on Gwadar.

Institute for Defense Studies and Analyses, India states in its research paper, “Expansion of the Karakorum Corridor” suggests a regional bloc which involves South Asian countries, but works against the unity of South Asia, will be counter-productive, as it will become a tool to protect the interests of Middle East and China in South Asia. It stresses Pakistan not to weaken South Asian Association of Regional Cooperation (SAARC) rather it should help make SAARC a functional bloc and promote economic integration of member states, which in turn will help resolve the outstanding issues between member states including bone of contention Kashmir between India and Pakistan.

Commenting on the developments took place in the recent visit of Nawaz Sharif to Beijing, Senator Mushahid Husssain point outs certain factors that impinge on this convergence of interest between China and Pakistan. China’s warmth with Pakistan has coincided with a ‘war of words’ with India. A prominent Chinese military leader even publicly rebuked India for trying to stir up trouble and provoke new problems on the eve of Indian Defense Minister’s arrival in Beijing. Obviously, India’s increasing coziness to Japan, which Dr. Manmohan Singh visited a week after receiving Li Keqiang, and Vietnam irks Beijing.

Mushahid stressed that China has some reservations which Pakistan needs to remove for rapid growth of Sino-Pak economic interaction. Objecting the role ‘slow and sluggish’ role of Pakistani bureaucracy, he argued culture of red-tape needs to be abolished as China has numerously complained about it. There are examples when projects have been suffered in the hands of this bureaucratic attitude e.g. 425 Megawatts Nandipur Power Project, Thar Coal project, etc.

Nandipur power project was initiated by Chinese in 2008 with the cost of 329 million USD, but due to callous attitude of Ministry of Law as it did not provide clearance for sovereign guarantees till 2010, China withdrew from the project as the cost went beyond 730 million USD. There are other examples as well where Pakistani bureaucracy hurt the Chinese feelings.

Another issue is the protection of over 15,000 Chinese engineers and personnel engaged in development of Pakistan’s infrastructure. It has been witnessed intermittently when Chinese got killed or kidnapped in Pakistan by the terrorists and authorities failed to provide security to them.

Mushahid advocated the idea of formation of a ‘Special Industrial Security Force’ dedicated to guard Sino-Pak economic corridor, ensuring security to Chinese workforce and its projects in Pakistan.

The newly installed government in Islamabad is committed to successfully execute the strategically important ‘game changer’ project as it believes China is the only partner in the world which can get the country out of the contemporary crises including energy shortage and revival of its economy. In the long run, Islamabad is following the policy of countering the power imbalance resultant of increasing western cooperation with India including United States’ Civil Nuclear deal by strengthening Sino-Pak partnership.