China's premier Li Keqiang in Pakistan
By Syed Fazl-e-Haider
KARACHI - Pakistan and China on Wednesday agreed to jointly work on an economic corridor for enhanced connectivity, with the two countries signing a series of agreements related to energy, technology and space during the first visit to Pakistan by China's premier Li Keqiang since he took office in March.
Even so, local critics claimed Pakistan was of little importance to Beijing compared with India, which Li visited for three days immediately before going to Islamabad. He then flies on to Switzerland and Germany.
Li was given the equivalent of the red-carpet treatment in the air as well as on the ground, with a squad of six JF-17 fighter jets, jointly
produced by Pakistan and China, escorting his plane the moment it entered Pakistani air space. Li's two-day visit has come at a time when Pakistan is set to undergo a political transition after a May 11 election from one civilian government to another, the first such handover in the country's troubled political history.
The two countries signed 11 deals in Islamabad to strengthen and diversify cooperation in economy, science and technology, space and upper atmosphere communication and boundary management. The memoranda of understanding signed by the countries included ones on maritime cooperation, cooperation for long-term plan on China-Pakistan economic corridor and cooperation in the field of marine science and technology.
"We hope to create a giant economic corridor that would not only enhance China's strategic significance but would also help in restoring peace and stability to Asia," Li told a joint news conference with outgoing President Asif Ali Zardari in Islamabad. "Our two sides should focus on carrying out priority projects in connectivity, energy development and power generation and promoting the building of a China-Pakistan economic corridor."
Facilitating development of such a corridor, Pakistan in February handed over operational control of its Gwadar port to China. Gwadar, in Balochistan province, is a deep-water seaport on Pakistan's southwest coast that could serve as a vital economic hub for Beijing. The Arabian Sea port occupies a strategic location between South Asia, Central Asia and the Middle East. It lies near the Strait of Hormuz, gateway for about 20% of the world's oil. Development of Gwadar as hub port in the region will form part of the Pakistan-China economic, energy and trade corridor.
Local analysts however point out that security is the key issue hampering the development of a Pakistan-China trade corridor, as terrorist attacks in China's restive Xinjiang province on one hand and unrest in Balochistan province could upset any such scheme of things or efforts made for revival of regional trade corridor.
Balochistan and Xinjiang are both the largest, least developed, neglected and volatile but resource-rich provinces of the two countries. Restoration of peace and stability in Balochistan and Xinjiang is essential for any future plan to establish regional trade corridor or economic development of the region.
Friendship with China has been a cornerstone of Pakistan's foreign policy. The Pakistan Muslim League - Nawaz (PML-N) of Nawaz Sharif won a resounding victory in the May 11 general election and is set to form the next government.
Sharif has to meet the challenge of reviving a flagging economy, and the country's relationship with China is an important factor for economic growth. Last year, trade between the two countries for the first time crossed the US$12 billion mark and both sides are aiming to reach $15 billion in the next two or three years.
As Pakistan's closest ally, China has previously risen to the country's support in difficult times. Defense cooperation is a major aspect of what Pakistan and China call their "all-weather friendship". In May 2011, China agreed to expedite the delivery of 50 fighter jets to Pakistan and to equip the Pakistan Air Force (PAF) with the latest FC 20 aircraft. PAF has a fleet of Chinese aircraft, including F-7PGs and A-5s, but also F-16s and French Mirages. The JF-17 "Thunder" program dates back to 1999 and is aimed at reducing Pakistan's dependence on Western companies for advanced fighters.
Critics however say that the two-day trip by Li is only being made to avoid slapping Islamabad in the face completely, after Li made made his first trip abroad a three-day visit to India, in a key signal about the real shifts in Chinese foreign policy.
A critical view published in The Express Tribune said,
The truth is that China is much more serious about its economic relationship with India than with Pakistan. The Chinese premier will, at best, sign a few memoranda of understanding, essentially worthless pieces of paper that say nothing of substance. In India, the visit was marked by Chinese companies signing legally binding contracts with their Indian counterparts worth billions of dollars. China's trade with India is worth $68 billion and the two countries are on track to take it to $100 billion in two years. The sooner Pakistan wakes up from the "China is our friend" delusion, the sooner we will stop giving control of the country's economic resources for almost nothing in return. The harsh reality is that Pakistan means almost nothing to China, and that is why the relationship with Beijing has yielded almost no tangible benefits for the Pakistani economy.
It further said,
In the 12-year period between July 2000 and June 2012, net foreign investment in Pakistan amounted to about $29 billion, according to the State Bank of Pakistan. Of that, just $0.8 billion came from China, and nearly all of that was China Mobile's investment in Zong. China's investment in Pakistan is less than that of tiny Netherlands, which invested $1.4 billion during that time. The supposed "Great Satan" - the United States - invested the most in Pakistan: $7.7 billion, or more than a quarter of all foreign investment in the country.
There is only one major Chinese company with actual investments in Pakistan: China Mobile. The number of major US companies investing in Pakistan? More than 30. In Pakistan's terms of trade with China, the relationship is virtually colonial in nature. In 2012, China sold Pakistan about $6.6 billion worth of goods, mostly electronic equipment and machinery. Pakistan sold China about $2.6 billion worth of goods, nearly all of that cotton yarn. By contrast, Pakistan runs a trade surplus with both the United States and the European Union.
Syed Fazl-e-Haider (http://www.syedfazlehaider.com) is a development analyst in Pakistan. He is the author of many books, including The Economic Development of Balochistan (2004). He can be contacted at email@example.com.
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