Zardari draws a blank from China visit
By Syed Fazl-e-Haider
QUETTA, Pakistan - Asif Ali Zardari, president of cash-strapped Pakistan, has
returned home from Beijing for the second time in a few months virtually
empty-handed, without any commitment from China for aid.
During his first visit as president last October, Zardari failed to secure
financial support from Beijing to stave off a balance of payments crisis, with
the Chinese government rebuffing a request for concessional loans.
This time, the two countries signed cooperation agreements for hydropower
generation and agriculture development, but there was no firm commitment from
Beijing about writing off some of
Islamabad's debt or extending additional aid.
Zardari's four-day visit, which included trips to Hubei province and Shanghai,
overlapped with and was overshadowed by US Secretary of State Hillary Clinton's
visit to the Chinese capital.
After China's rebuff in October, Pakistan reluctantly reached agreement with
the International Monetary Fund on a US$7.6 billion loan facility, which in
turn paved the way for Beijing to grant $500 million in loans. That compares
with the estimated $14 billion some economists say is needed to get Pakistan
back on its feet.
"China has been providing help, within its own capability, to Pakistan's
economic and social development," AP quoted Chinese Foreign Ministry
spokeswoman Jiang Yu as saying last week.
Even so, Pakistan's financial distress and worsening internal security may be
cooling China's perception of its neighbor.
"Instead of increasing assistance to its old ally, Beijing has apparently been
keeping a distance from Islamabad," Time magazine reported last week.
"Pakistan today needs China more than China needs Pakistan - that is why there
is more enthusiasm in Pakistan about its relations with China than vice-versa,"
the magazine quoted Shabbir Cheema, director of the Asia-Pacific Governance and
Democracy Initiative, as saying.
While economic issues were at the heart of Zardari's visit, it took place in
the shadow of the intensifying US "war on terror" in Afghanistan, also
involving Pakistan's western border areas, and amid continuing questions on
Pakistan's involvement in terrorist attacks in India's financial center,
Mumbai, last November.
In a telephone conversation with President Hu Jintao on Tuesday, Zardari
thanked him for China's support to Pakistan's stance on the Mumbai incident,
over which Islamabad has had to fend of Indian charges of complicity. The two
leaders agreed to work together to build a strong economic and political
partnership.
"The visit assumes significance as Islamabad had given a blank check to China
to intercede on its behalf with India on the Mumbai terror attacks," Press
Trust of India reported.
Zardari sought during his latest visit to highlight the benefits his country
offered China. In an interview with Chinese media, he said companies based in
central China would gain from trading through Pakistani ports, which are nearer
to the sea than their own country's ports such as Shanghai and Hong Kong.
"We will encourage Chinese companies to come to Pakistan as Pakistan is
geo-strategically located and provides them access to the rest of the world
through our warm waters," Associated Press of Pakistan quoted Zardari as
saying.
The two sides agreed that establishing trans-border economic zones and a
Pakistan-China rail link would go a long way in strengthening the relationship
between the two countries.
Pakistan wants "to initiate rail links as well in addition to existing road and
sea links". Pakistan Press International quoted Zardari as saying. Addressing
Chinese heads of major financial institutions and banks, he said the government
would also provide maximum support to Chinese investors to enhance links
between the two countries. The opening of branches by Chinese banks in
Pakistan, would further expand financial interaction.
"We also have a free-trade agreement with China and hope to finalize a trade
agreement in services shortly", China Daily reported Zardari as saying. "Once
we get our economic fundamentals right we can be a useful economic partner, a
significant market and a profitable destination for investment." Pakistan is
the first country with which China has signed a free trade agreement (FTA). The
first phase of an FTA in goods and investment was completed last July.
Investment by China and provision of easier access for Pakistani goods into the
Chinese market could help boost trade between the two countries. Last year,
bilateral trade volume rose a mere 1.3% to $6.9 billion.
Zardari acknowledged the assistance China has already given to his country.
"China has helped Pakistan’s economic development. Chinese assistance and
enterprise has been invaluable in areas as diverse as construction of nuclear
power plants to dams, roads and industrial estates. The port of Gwadar on
Pakistan's Arabian Sea coast is a testament to China’s friendship with
Pakistan," he said.
At the mouth of the Persian Gulf and opposite the Strait of Hormuz, Gwadar port
is being funded and built by China and is intended to serve as a corridor for
energy, cargo and services between Central Asia, the Gulf and other surrounding
regions. Islamabad has awarded the US$70 million construction contract for an
international airport at Gwadar to China Harbour Engineering Company. Under a
memorandum of understanding signed during Zardari's latest visit, the Chinese
company is to support the National Dredging Corporation of Pakistan in its
dredging work - silting is a considerable problem at, for example, Gwadar.
Over 3,000 Chinese nationals have their presence in Pakistan, and concern is
rising over their safety given the increased numbers of terrorist incidents in
the country, which has included the deaths of Chinese engineers involved in the
Gwadar port project.
"Terrorists have specifically targeted some of our Chinese friends who were
working in Pakistan to drive a wedge between the two countries and peoples,"
China Daily quoted Zardari as saying. "The sacrifice of these Chinese citizens
for Pakistan’s cause is an abiding reminder to us Pakistanis of China's
friendship with our country."
Zardari identified possible areas of co-operation between Pakistan and China in
hybrid seed development and other agriculture technology such as water
management and use of solar technology, Business Recorder reported, citing a
statement by the Pakistan Embassy in China.
Under a joint breeding programme, China’s Hubei Seed Group will transfer
germplasm technology to boost productivity of hybrid rice. Pakistani scientists
will also be trained in agronomy and oilseed production.
The two sides also signed an agreement under which China will provide technical
assistance to Pakistan in hydro-power generation. Zardari visited the Three
Gorges Dam, the world’s largest dam.
"Pakistan has not benefited to the extent that it should from its relations
with China. We would like China to help us in the construction of a dam similar
to this one," Associated Press of Pakistan quoted the Pakistani president as
saying.
Syed Fazl-e-Haider, sfazlehaider05@yahoo.com, is a Quetta-based
development analyst in Pakistan. He is the author of six books, including
The Economic Development of Balochistan, published in May 2004.
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