A pragmatic visit
Hussain H Zaidi
Saturday, April 25, 2015

It was agreements and protocols galore - 51 to be precise - during Chinese President Xi Jinping’s visit to Islamabad. China will inject $46 billion into Pakistan, partly as investment and principally as credit. At a time when financial capital is at a premium, why is the globe’s second largest economy and the largest accumulator of foreign exchange reserves being so generous with us?

Yes, Beijing is Islamabad’s time-tested and all-weather friend and our bilateral ties are remarkable for how they have sustained over the years. Yet, as a rule, inter-state relations are characterised by pragmatism and mere sentiments are no guide to a state’s behaviour – not the least of one that is drawing closer to becoming a superpower.

The Chinese assistance is part of the county’s commercial expansion strategy in which Pakistan and other South Asian nations have an important role to play. The top level visit was earlier scheduled for September 2014, as part of President Jinping’s engagement in the region, but was put off due to Pakistan’s restive domestic situation.

Regional connectivity is high on Beijing’s trade expansion endeavours. South Asia, along with South-East Asia, provides a conduit for China’s access to the Indian Ocean – the world’s busiest trade route, linking China to energy rich Middle East and West Asia, and beyond that to Europe. Nearly 80 percent of Chinese oil imports are carried through the Indian Ocean.

China can access the Indian Ocean via two routes. One is the Maritime Silk Road (MSR) encompassing South-East Asia and South Asian countries including the Maldives, Sri Lanka, Bangladesh and India. The MSR initiative seeks to revive the ancient Silk Road corridor connecting China with Europe.

The other is to the south-west of China through Pakistan’s Gwadar Port, developed with Chinese assistance and being run by a Chinese state-owned enterprise. The port has proximity to the Gulf region and will be connected through road and rail links to western China through the northern part of Pakistan bordering China under the project named China-Pakistan Economic Corridor (CPEC). The CPEC will economise on both time and money for China’s enormous oversees trade and investment, while at the same time giving a boost to Pakistan’s development efforts.

That is the reason China is on a spree to build and upgrade ports and other infrastructure in en-route costal countries, including Pakistan. During Jinping’s visit to India last September, the two sides had struck deals providing for $20 billion Chinese investment over five years mainly covering infrastructure.

Of the $46 billion announced for Pakistan, $34 billion will be spent on energy projects, while $12 billion will go to the transport sector. A capital scarce country like Pakistan – where foreign direct investment inflows have dried up over the years – could hardly have asked for more.

In return, Beijing would like Islamabad to shore up its counterterrorism credentials. As China marches ahead on the road to acquiring superpower status, one of the most severe threats it faces is the militancy in the Muslim majority far-western region of Xinjiang, which borders quite a few countries including Pakistan, India, and Afghanistan. Xinjiang is also China’s largest administrative unit, and is rich in oil and gas. It is also the region that will link China to West Asia through the CPEC.

The Uighurs, who constitute the largest ethnic group in Xinjiang and who refer to the region as East Turkestan, want to break away from China. Beijing accuses them of resorting to terrorism and adhering to a global jihadi ideology.

China is an authoritarian state. For such states even a slight attempt to question the established power centre does not go down well – what to speak of militancy.

At the last Shanghai Cooperation Council (SCO) summit in Tajikistan, when the Chinese president called for a crackdown on the ‘three evil forces’ of extremism, terrorism, and separatism, he definitely had the Xinjiang unrest uppermost in his mind.

The militancy problem has also begotten deep Chinese interest in Afghanistan. An instable Afghanistan, as China sees it, will strengthen the Xinjiang separatist movement.

Hence, Afghan President Ghani while on his maiden foreign visit last year had assured his Chinese hosts of his country’s assistance in fighting the militancy in Xinjiang. To reciprocate Kabul’s pledge, Beijing announced $327 million in aid over three years, a very generous gesture when judged by the level of previous bilateral assistance, and promised to help rebuild the war-torn country

Some observers attribute the Uighur uprising to alleged political and cultural repression by Beijing. Be that as it may, for Pak-China relations what is more important is how Beijing looks at the uprising and the role it expects Islamabad to play in putting it down.

China has long suspected the involvement of non-state actors from Pakistan in the Xinjiang unrest. It cannot be ruled out that these areas, together with those on the other side of the Durand Line, have supplied fighters and training to the Uighurs.

Not only would Beijing want an end to such supplies, it would also like Islamabad to help it smash terrorist networks mainly through intelligence sharing. Thus while playing host to Prime Minister Nawaz Sharif last year, the Chinese had elicited the promise that Pakistan would help them fight the Xinjiang militancy.

How much China is wary of non-state actors is borne out by the country’s changed stance on the Kashmir issue. There was a time when Beijing fully supported Pakistan’s Kashmir position, particularly with regard to the implementation of the United Nations Security Council’s relevant resolutions.

But with New Delhi being successful in having the world see the Kashmir resistance movement as an expression of jihadi ideology, Beijing has ceased to put its weight behind the UN resolutions and instead advocates resolution of the issue through bilateral means, which is closer to the Indian stance than that of Pakistan.

Not surprisingly, Kashmir has not been in the limelight during the recent meetings between the Pakistani and Chinese leadership. Islamabad has also done well not to bring up the issue.

The government’s decision to go all out against militants has raised the stature of Islamabad for Beijing. President Xi Jinping made it a point to praise Pakistan’s counterterrorism role in his address to the joint sitting of parliament. The uprooting of terrorist networks in Pakistan will also benefit China.

Last, but by no means the least, is the level of political risk in Pakistan. Before releasing billions of dollars for investment in another country, one of the foremost factors that the donor takes into account is how safe the recipient is for doing business with. Pakistan may offer one of the most liberal investment regimes in the world but a precarious security situation is the country’s Achilles’ heel.

Hence, the translation of the Chinese pledges into actual capital inflows will largely depend on the security situation in Pakistan. In the past, militants have hit Chinese workers and recurrence of such incidents would only discourage investment from China. By the same token, Balochistan, where Gwadar is located, is a restive province. The Balochistan situation, if not improved, has the potential to shipwreck the development of Gwadar and completion of the economic corridor.

The decision to set up an armed forces-led special division to protect Chinese citizens and projects reflects that the security situation in Pakistan remains of vital concern to Beijing and will bear decisively on bilateral economic cooperation.

Email: hussainhzaidi@gmail.com

Published in The News