Strategic Pak-China Economic Corridor, Connectivity and Maritime Cooperation

[Riaz Haq]

China's new Prime Minister Mr. Li KeQiang has just ended a two-day visit to Pakistan. Speaking to the Senate, Li declared that "the development of China cannot be separated from the friendship with Pakistan". To make it more concrete, the Chinese Premier brought with him a 5-points proposal which emphasizes "strategic and long-term planning", "connectivity and maritime sectors" and "China-Pakistan economic corridor project".

Source: China Daily

From L to R: Premier Lee, President Zardari and Prime Minister Khoso

Here's a recent report by  China's State-owned Xinhua News Agency that can help put the Chinese premier's speech in context:

“As a global economic power, China has a tremendous number of economic sea lanes to protect. China is justified to develop its military capabilities to safeguard its sovereignty and protect its vast interests around the world."

The Xinhua report has for the first time shed light on China's growing concerns with US pivot to Asia which could threaten China's international trade and its economic lifeline of energy and other natural resources it needs to sustain and grow its economy. This concern has been further reinforced by the following:

1. Frequent US statements to "check" China's rise.  For example, former US Defense Secretary Leon Panetta said in a 2011 address to the Naval Postgraduate School in California: "We try everything we can to cooperate with these rising powers and to work with them, but to make sure at the same time that they do not threaten stability in the world, to be able to project our power, to be able to say to the world that we continue to be a force to be reckoned with." He added that "we continue to confront rising powers in the world - China, India, Brazil, Russia, countries that we need to cooperate with. We need to hopefully work with. But in the end, we also need to make sure do not threaten the stability of the world."

Source: The Guardian

2. Chinese strategists see a long chain of islands from Japan in the north, all the way down to Australia, all United States allies, all potential controlling chokepoints that could  block Chinese sea lanes and cripple its economy, business and industry.

Karakoram Highway-World's Highest Paved International Road at 15000 ft.

Chinese Premier's emphasis on "connectivity and maritime sectors" and "China-Pakistan economic corridor project" is mainly driven by their paranoia about the US intentions to "check China's rise" It is intended to establish greater maritime presence at Gwadar, located close to the strategic Strait of Hormuz, and  to build land routes (motorways, rail links, pipelines)  from the Persian Gulf through Pakistan to Western China. This is China's insurance to continue trade with West Asia and the Middle East in case of hostilities with the United States and its allies in Asia.

Pakistan's Gawadar Port- located 400 Km from the Strait of Hormuz

As to the benefits for Pakistanis, the Chinese investment in "connectivity and maritime sectors" and "China-Pakistan economic corridor project" will help build infrastructure, stimulate Pakistan's economy and create millions of badly needed jobs.

Clearly, China-Pakistan ties have now become much more strategic than the US-Pakistan ties, particularly since 2011 because, as American Journalist Mark Mazzetti of New York Times put it, the  Obama administration's heavy handed policies "turned Pakistan against the United States". A similar view is offered by a former State Department official Vali Nasr in his book "The Dispensable Nation".

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[Riaz Haq]

Here's China Daily report on China's plans to build Pak-China economic corridor:

China has allocated funds to do preliminary research on building an international railway connecting the westernmost city of Kashgar in the Xinjiang Uygur autonomous region with Pakistan's deep-sea Gwadar Port on the Arabian Sea, according to the director of Xinjiang's regional development and reform commission.
"The 1,800-kilometer China-Pakistan railway is planned to also pass through Pakistan's capital of Islamabad and Karachi," Zhang Chunlin said as the two-day International Seminar on the Silk Road Economic Belt commenced on Thursday in Urumqi, Xinjiang's capital.
"Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the project has already started," Zhang said.

The railway, which cannot avoid running through the Pamir Plateau and Karakoram Mountains, will be one of the hardest to build but most vital transportation infrastructures on the China-Pakistan corridor along China's newly proposed Silk Road Economic Belt, he added.
"China and Pakistan will co-fund the railway construction. Building oil and gas pipelines between Gwadar Port and China is also on the agenda," Zhang said.
Control of Gwadar Port was given to China and an agreement was signed with China Overseas Ports Holding Co on May 16, 2013, to transfer operational rights from the Port Authority of Singapore.
The move means China now is running a port just opposite the Gulf of Oman, an important route for oil tankers.
The speed of road and railway construction in Xinjiang was significantly increased after September 2013, when President Xi Jinping raised the idea of the economic belt, Zhang said.
Xi proposed reviving the ancient trade routes connecting China, Central Asia and Europe.
To become a transportation hub and China's core area on the economic belt, the government has decided to develop three main corridors through southern, central and northern Xinjiang, which connects China with Russia, Europe and Pakistan.
Work is also due to begin soon on the long-planned China-Kyrgyzstan-Uzbekistan railway.
The region, which borders eight countries, also plans to open three new land ports to Kyrgyzstan, Kazakhstan and Russia.
"We will consider opening the ports to Afghanistan and India once social stability can be ensured. After all, openness is the foundation of boosting trade," Zhang said.

http://usa.chinadaily.com.cn/business/2014-06/28/content_17621848.htm

[Riaz Haq]

From Wall Street Journal:

ISLAMABAD—Pakistan plans to sign deals worth billions of dollars with China for development of infrastructure and energy projects during Prime Minister Nawaz Sharif ’s visit to Beijing this weekend, Pakistani officials said.

Mr. Sharif is to meet the Chinese leadership on the sidelines of the Asia-Pacific Economic Cooperation summit, which starts in Beijing this week. Pakistan suffers from a crippling shortage of electricity and it is looking to its close ally China for a solution.

The agreements are part of a bigger aim to establish a Pakistan-China economic corridor that will link south west China, by road and rail, to the Pakistani port of Gwadar, giving China a harbor close to the Middle East, a $35 billion program in total.

“Pakistan and China have strong relations and we’ve now decided to take this relationship to the next level of strategic economic cooperation,” Ahsan Iqbal, Pakistan’s Planning Minister, said in an interview.

Mr. Iqbal said the Pakistani side’s focus in Beijing will be on energy, with agreements or memorandums to be signed on a series of specific power projects. He said that previously, negotiations had been over the broad framework for the proposed economic corridor.

“The Chinese have agreed to invest at a critical time, when Pakistan is really starved of energy,” said Mr. Iqbal.

Mr. Sharif will sign agreements on 14 power plants, that will provide the country with 10,400 Megawatts of new generation, said Musadiq Malik, the spokesman for the prime minister. The Chinese companies will invest in building the power stations as commercial ventures, raising their own financing, as foreign direct investment, so Pakistan won't be taking on any additional debt, Mr. Malik said.

Another official said that two of the power plant projects are sufficiently developed to begin work on the ground within the next 12 months. The plants are mostly coal-fired.

Building power stations on that scale would cost at least $10 billion, experts said. Pakistan will also need to upgrade its electricity transmission network and build facilities to import and transport the huge quantities of coal that would be required.

Pakistan’s daily electricity output is generally 13,000 MW to 15,000 MW, leaving it at least 5,000 MW short of demand. That deficit means hours of rolling supply cuts to homes and businesses every day across the country, a situation that economists estimate slashes several percentage points off national income.

Aside from China, Pakistan has struggled to attract other foreign investors to its energy sector. Pakistan’s current generation is based on oil-fired stations, which are expensive to run, and gas-power plants that are stymied by a shortage of gas in the country. Pakistan now plans to build plants that use coal, along with limited solar and wind power projects, officials said.

“We have received a signal from the Chinese that these [power] projects are ready to proceed,” Mr. Sharif told a cabinet meeting Thursday, in televised remarks. “These power stations will start to be built, but to complete them it will take about 3½ years.”

http://online.wsj.com/articles/pakistans-sharif-heading-to-beijing-...

[Riaz Haq]

China on Saturday promised neighbouring Pakistan investment worth $42 billion, an official said, as Islamabad promised to help Beijing fight what it calls a terrorist threat in its far-west.

Pakistan's Prime Minister Nawaz Sharif oversaw the signing of 19 agreements and memorandums mostly centred on the energy sector as he met Chinese President Xi Jinping in Beijing.

Pakistan, a close ally of China, suffers from chronic electricity shortages and Islamabad has long sought investment in coal-fired power stations which it sees as a solution to the problem.

Other countries have balked from such investments, sometimes on environmental grounds.

The new agreements pave the way for Chinese state-owned companies to help build at least four new power stations in Pakistan, while the deals also cover the supply and mining of coal, the prime minister's press office said.

"The deals being signed between China and Pakistan are worth $42 billion. The whole investment is being made by China," said Amir Zamir, spokesman for Pakistan's ministry of planning and development.

"There is no loan or aid for the energy projects, but pure investment by the Chinese," he told AFP.

Pakistan has for decades been China's closest ally in South Asia, and Beijing is a major trading partner and key supplier of military technology to Islamabad.

Pakistan borders the far-western Chinese region of Xinjiang, which has seen a series of clashes and attacks on civilians that have left more than 200 dead in the past year.

Beijing blames some of the region's violence on an organised terrorist group it calls the East Turkestan Islamic Movement (ETIM) seeking independence for the region, home to the mostly-Muslim Uighur minority.

Many analysts doubt that any large scale organisation of the kind exists, while rights groups blame the violence on what they call the repression of Uighur language and culture by Beijing.

Sharif told Xi that Pakistan would "resolutely fight the East Turkestan Islamic Movement terrorist force," China's foreign ministry said in a statement following the meeting in Beijing.

"We stand behind China on all the core issues like Taiwan and Tibet to human rights, the fight against the ETIM," Sharif added within earshot of journalists.

Xi was forced to cancel a planned trip to Pakistan in September due to anti-government protests in Islamabad.

But the Chinese president visited Pakistan's arch-rival India the same month, signing a raft of deals.

Sharif acknowledged that "somehow the circumstances led to the postponement of the visit," adding to Xi: "I believe you will be visiting Pakistan very soon."
http://news.yahoo.com/pakistan-wins-china-investment-worth-42-billi...

[Riaz Haq]

BEIJING—A major textile producer in China has backed out of a high-profile deal for control of a Pakistani company. The stated reason: Banks in the Chinese company’s home province face such large loan defaults that they balked at lending the $62 million needed to complete the acquisition.

The scuttling of the deal by Shandong Ruyi Science & Technology Group Co., which has investments around the world, is a further signal that stress is mounting in China’s banking system and that the days of easy credit in the world’s second-largest economy are drawing to a close.

According to Masood Textile Mills Ltd.’s chief executive officer, Shahid Nazir, Ruyi in October pulled out of the deal to buy 52% of his company, almost nine months after committing to the acquisition.

“Shandong banks were having some serious issues on defaults,” Mr. Nazir said he was told by Ruyi, adding that the Chinese company said it wasn’t alone in having funding troubles. “Because of the general situation in Shandong…lots of companies in the province were feeling the squeeze.”

A spokesman for Ruyi couldn’t be reached, and the company’s Shenzhen-listed unit declined to comment.

Credit from China’s state-owned banking system has in the past been readily available to companies with political backing and ambitions explicitly in line with those of the central government. Ruyi has received well-publicized visits from President Xi Jinping and Premier Li Keqiang and is expanding overseas, as Beijing has urged. As the economy slows, however, the vast expansion in bank loans used to help keep growth humming over the past six years is now being followed by rising defaults.

China’s financial system is opaque. Authorities have been reluctant to publicize defaults, often swooping in with bailouts at the last minute.

But nationwide, cracks are starting to appear. In the third quarter, the aggregate deposit base of China’s four biggest banks declined after years of robust growth. Since September, the central bank has pumped hundreds of billions of yuan directly into the country’s biggest financial institutions in an unconventional move to give the banks the resources to continue to support an economy that has grown dependent on borrowing.

http://online.wsj.com/articles/china-textile-maker-cancels-pakistan...

[Riaz Haq]

ISLAMABAD: Federal Minister for Planning, Development and Reforms, Ahsan Iqbal Tuesday said that Energy projects of 16600 Mega Watt (MW) signed under Pak-China Economic Corridor during recent visit of the Prime Minister to China would help overcome energy crisis in the country.
Addressing a press conference here, the minister said that the energy projects would be completed in two phases.
"During the first phase the energy projects of 10,400 MW electricity worth of $15.5 will be completed while in the second phase different projects of 6600 MW electricity will be concluded ", he said adding development of energy infrastructure and up-gradation of system of transmission lines was also included in the agreements.
Ahsan Iqbal said that energy projects of 9000 MW would be completed by 2018 which would mean that the government would be able to eliminate power load-shedding in the country during its tenure.
The minister said that coal-based power plants would generate 7500 MW and the cost per unit of electricity would be about 10 cents which would be far cheaper than that of oil.
He said that under the Corridor, 1000 MW of the largest solar park would also be established in Cholistan while hydal based energy projects would be of 1600 MW.
Giving details about Thar Coal Projects, the minister said that in the first phase two projects of 2000 MW would be developed from Thar Coal while under the agreements with China overall 6600 MW Thar Coal projects would be completed
He said that a package of $650 million was also included in the agreements for development of Gwadar sea port and airport.
Iqbal further said that 1736 kilometers of railway track would be upgraded which would not only help to ease out transportation system of goods and coal but it would also help improving transportation facility for the passengers.
The Minister strongly condemned Pakistan Tehreek-e-Insaf (PTI) Imran Khan's statement against Chinese development assistance to Pakistan under "China-Pakistan Economic Corridor" and said that Pakistan and China are closest friends and enjoy time tested all weather friendship.
"At a time when international investors were shying away from Pakistan due to security environment in the region, decision of Chinese and Pakistani leadership during PM Nawaz Sharif's visit to Beijing to take Pak-China relations to new heights in economic field through China Pakistan Economic Corridor Project is a milestone", he added.
The most critical energy and infrastructure sectors related projects will infuse new life into Pakistan's economy, he added.
He said the projects are in IPP mode as investment projects and rejected Imran Khan's assertion that these projects were being financed through borrowing.
Iqbal said that these projects were coming under the energy policy which was open for all investors from any part of the world.

http://www.brecorder.com/top-news/108-pakistan-top-news/204294-1660...

[Riaz Haq]

The Sino-Pak Trade and Energy Corridor
-An AssessmentThe
8th Pan – European Conference on International Relations
Institute of International Relations
Warsaw Economic University, Poland

A more comprehensive account detailing the
strategies for six subregional trade and transport sector development up to 2040
focusing upon Central Asian is given in ADB (2012).
Table 1 Gwadar Deep Sea Port Construction Plan
Phase 1：2002,3,22~2005,3,23 (original date)
Beijing and Islamabad signed agreement in assisting Pakistan building the the Gwadar Deep-Sea Port
on 10 August 2001; construction work took place in May 2002 completed in December 2005. China
agreed to participate in the Phase-2 construction.
Budget：$250 million(14.9Rupee)
China provided $198 million , to be partitioned into
donation (18)、new development aid (31)、new
interest-free loan (31)、government preference loan
(58)、buyer’s credit (60)
Pakistan：$50 million
Manpower (personnels involved)
China：450 Pakistan：512
Facilities
3 -multipurpose berths —each 200 meters long.
1 -RO-RO berth
1-100 meter service berth
4.7 km long approach channel dredged to 15.5 m inner harbour and 12.5 m outer harbour
Width of channel-206 m
Port Basin and Turning Area- 595 m diameter
Related port infrastructure and port handling equipment & pilot boats, tugs, survey vessels, etc.
The port, currently, has the capacity to handle 50,000 DWT bulk carriers and 25,000DWT
containers
Designed by：The Fourth Harbour Engineering Investigation and Design Institute”
（FDHI）of CCCC
Implemented by : China Harbour Engineering Company Ltd. of CCCC
CCCC: China Communications Construction Company Ltd.
Phase-2: commence after Phase-1, expected to complete in 8~10Years
In 2007, Gwadar Port Authority (GPA) singed contract with the Concessional Holding Conpany
(CHC) of the Port Authorty of Singapore (PSP), CHC took over the construction and management
business of the operation of the Port duty-free and the FTZ for 50 years by adopting a BOT model
Budget：$524 million BOT、BOO
Berth for
Containers：4
Bulk carriers：1(up to 100,000DWT)
Bulk grain carrier: 1
Ro-Ro：1
Tankers：2 (up to 200,000 DWT)
Basic Installations：Warehouse and EPZ、Industrial site for crude storage/refinary/petrochemicals
Space for development：18,600 hectare, containing-Wharf (1,2 phases)：400 hectare
-Export processing zone (adjacent to the East Bay)：74 hectare
-Exclusive industrial site (city north)：4,000 hectare
-Refinary units (NE of city with pipe linking with crude oil port terminal)：1,000 hectare
-Residential area (city west, north to the Bay)：400hectare
Contract
1. Corporate income tax: free for 20 years
2. Materials and equipments imported for port construction: duty free
3. Vessels and fuels：tax free for 40 years
4. Tax of Balouchistan and local government on CHC: none
5. Bonus：GPA and PSA are entitled to draw bonus out of both the annual commodity tax income
and port service fees (9%) and the FTZ revenue(15%)
Sources：http://www.skyscrapercity.com/showtheread.php?t=392948
1. Rana, Pervaiz Ishfaq (2007), “Government Indecisive on Role, Status of Gwadar Port,” Dawn
Feb., 6.
2. Sabri, Rabeah (2009), “Balochistan: Af- PAK’s forgotten Frontier,” May. 4.
a href="http://www.sais.jhu.edu/academics/regional-studies/southasia/pdf/Rabeah%20Sabri%20Baloc" target="_blank">http://www.sais.jhu.edu/academics/regional-studies/southasia/pdf/Ra...
histan.pdf>
Gwadar Port: On 20 March 2007, Gwadar port (Phase-1) was officially
inaugurated by President Pervez Musharraf, along with Chinese Minister of
Communication Li Shenglin, he promised a fourth port to be built at Sonmiani in
the Lasbela district. Once completed, it will rank among the world's largest
deep-sea ports and serve as the mother-port at the junction of traditional trade
routes opposite the Strait of Hormuz. The port began cargo handling from 15
March 2008. The first ship carrying 64,000 tonnes wheat from Canada docked
and unloaded, the largest vessel ever called at Pakistan.

http://www.eisa-net.org/be-bruga/eisa/files/events/warsaw2013/Ouyan...

[Riaz Haq]

China and Pakistan make an oddball but enduring couple

We tend not to see things through Beijing’s eyes. If we are to make sense of shifting realities, we will have to try. From Beijing, the world can seem a hostile place. The US, with its unshakeable faith in liberal democracy, may not be actively seeking regime change in China but it would surely welcome the collapse of the Communist party.
In conjunction with other countries, including India, Australia and Japan, Washington is trying to contain China’s regional military ambitions. Neighbouring countries like the Philippines and Vietnam, which until recently had been reassured by Beijing’s “smile diplomacy”, have grown wary. Even North Korea, almost wholly dependent on Chinese largesse, has grown defiant.
Pakistan looks like Beijing’s one true friend. One of the first countries to recognise the People’s Republic in the early 1950s, Islamabad was a bridge between China and the US. When Henry Kissinger, who later became US secretary of state, made his secret visit to China in 1971 to prepare for normalisation of US-China relations, he sneaked in from Pakistan. And for Beijing, Pakistan has been a way to keep India off balance.
In return, Beijing has kept Pakistan’s military equipped when supplies dried up from elsewhere. Beijing also provided information and enriched uranium for Pakistan’s nuclear bomb. When a US stealth helicopter crashed during the 2011 operation to kill Osama bin Laden, the Pakistanis showed the wreckage first to the Chinese. China built Pakistan a deepwater port at Gwadar on the Indian Ocean.
Andrew Small, author of a book on the relationship, says Beijing has earned real leverage. In 2007, under Chinese pressure, Islamabad raided the Lal Masjid “Red Mosque” after militants kidnapped several Chinese citizens. Chinese pressure has been one factor behind Pakistan’s offensive against militant groups in North Waziristan. For years, the US pushed for the same thing without success. The China-Pakistan axis is worth watching if only because it shows the limits of Beijing’s non-interventionist policy. As it gets sucked into the global whirlpool, it faces the risk of blowback. China now has to deal with attacks by members of the Uighur, a Muslim minority ethnic group. Some may be ideologically inspired — if not planned — in Pakistan’s lawless tribal belt. Like the US, Beijing worries Pakistan may not always crack down as hard on terrorists as it pretends.
Despite all this, China has stayed the course while Washington has blown hot and cold. That raises the intriguing notion of whether the US and China could work more closely in Pakistan. While there is much that divides their strategic interests, a surprising amount unites them. Beijing and Washington want a stable, viable Pakistan, not a viper’s nest of terrorist export. Both want to ensure the Pakistani military keeps a firm hold on nuclear weapons. Both want Pakistan to rein in support for the Afghan Taliban in the wake of US troop withdrawal from Afghanistan.
Some detect signs that Beijing has become more open to the idea. Wang Jisi, a Chinese foreign policy expert, has said that China’s “western periphery” offers a rare opportunity. In east Asia, the US pivot is seen as containment and the two are locked in what he says is a zero-sum game. In Pakistan and Afghanistan, however, Beijing and Washington have “significant scope for co-operation”. It is in neither’s interests for Pakistan to fail. If they could work together in that cause, it would be the oddest thing of all.

http://www.ft.com/intl/cms/s/0/230093ae-b112-11e4-831b-00144feab7de...

[Riaz Haq]

To finance infrastructure projects connecting South Asia, Southeast Asia, Central Asia and Europe along an integrated land corridor

China has taken a firm step to implement its vision of the Silk Road Economic Belt — an initiative to integrate the economies of Asia and Europe along the Eurasian corridor — by putting into operation its $40 billion infrastructure fund for this purpose.

The fund, flagged in November last by Chinese President Xi Jinping, has started functioning on the lines of Private Equity (PE) venture. With China as the fulcrum, it is meant to finance development of roads, rail tracks, fibre optic highways, and much more, that would connect South Asia, Southeast Asia, Central Asia and Europe along an integrated land corridor.

Funds can also be allocated for the Maritime Silk Road (MSR), which envisions development of ports and facilities, mainly in the Indian Ocean. These ports will be connected to the hinterland by a string of land arteries, which will eventually hook up with the main Silk Road Economic Belt at specific junctions.

Xinhua quoted President Xi as saying during the November meeting with officials from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan that the purpose of the fund is to “break the connectivity bottleneck” in Asia.

The Chinese President had offered investors from Asia and beyond to join the Silk Road fund for the development of specific projects.

The $40 billion fund was in addition to the decision to establish a $50 billion Asian Infrastructure Investment Bank, which is also meant to help finance construction in the region.

On Monday, the semi-official China Business News quoted Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), as saying the $40 billion fund “has already started operations, with registration on December 29 and the first board meeting on January 6”.

China has poured part of its foreign exchange reserves in the fund, which include investors such as the China Investment Corp, the country's sovereign fund, and China Exim-Bank.

Analysts point out that as its economy slows down from its earlier blistering pace, China has developed large overcapacity in construction material, including cement and steel. China’s “One Road, One Belt” strategy, aimed at establishing new “growth engines” along the Eurasian corridor, could well absorb some of this surplus.

In an editorial in China Daily, Justin Yifu Lin, former chief economist of the World Bank, wrote: “The strategy is good for the stabilisation and development of the world economy and China, as it has a large overcapacity in construction materials.”

http://www.thehindu.com/news/international/chinas-silk-road-fund-be...

[Riaz Haq]

Shifting Allegiances – Rethinking #US-#Pakistan Relations as Pakistan grows closer to #China and #Russia http://on.cfr.org/1CYQRZw via @CFR_org

The once strong U.S.-Pakistan relationship may be set to expire. Since the Afghan-Soviet war (1979-1989), Pakistan has served as a key U.S. ally in the Middle East—providing a base for military operations, participating in the counterterrorism operations in Afghanistan and Pakistan, and mediating relations between the United States and China. This bilateral relationship expanded in 2001 under President Bush, who increased humanitarian and military aid from $187.7 million in 2001 to $2 billion the year after 9/11—totally $20 billion in the subsequent decade. However, recent Pakistani political and military decisions reveal shifting allegiances, calling into question the strength of U.S.-Pakistan relations.


In recent months, Pakistan has embarked on a number of initiatives that support U.S. regional interests. Much of Pakistan’s renewed attention to countering terrorism was spurred by the December 16, 2014, Peshawar school attack—the most violent terrorist attack in Pakistan’s history—in which Taliban militants killed 145 people, including 132 children. Subsequently, in December 2014, the Pakistani government created National Action Plan (NAP) to crack down on terrorism. In January 2015, Pakistan began a process of deepening military ties with Afghanistan to strengthen border security. Also in line with U.S. interests in the region, Pakistan is pursuing friendlier relations with India by resuming dialogues for the first time in almost one year amid tensions on the contested Jammu and Kashmir border. As a result of Pakistan’s counterterrorism efforts, the State Department’s approved Pakistan’s request for nearly $1 billion in military equipment.

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In recent months, Pakistan’s allegiances have begun to shift as the country strengthens relations with China and Russia, two countries with which Pakistan’s interests increasingly align. Pakistan’s deepening regional ties have reached an unprecedented level, according to a study by the non-profit group, Pew Charitable Trusts, and pose a direct challenge to U.S. regional influence. Most recently, on April 16, Chinese president Xi Jinping announced plans to embark on a $46 billion infrastructure spending plan in Pakistan known as the China Pakistan Economic Corridor and, in early April, Pakistani president Nawaz Sharif approved an approximately $5 billion deal with China to purchase eight submarines with the potential to attach nuclear warheads. With a security interest in filling the vacuum left by the drawdown of U.S. troops from the region in order to stem the growing threat of terrorist attacks in West China and promises of unprecedented investment to Pakistan, Pakistan may default to a partner with which its interests more directly align—China.
---------

Pakistan’s recent actions reflect an increasingly different set of priorities. While Pakistan’s rivalry with India, quest for regional alliances, and pursuit of a strong military arsenal are not new, the country’s growing alignment of interests and unprecedented collaboration with potential U.S. rivals—China and Russia—threaten the stability of a bilateral relationship founded primarily on Pakistan’s reliance upon the United States. The United States should question whether it is clinging to an outdated perception of U.S.-Pakistani relations.


http://blogs.cfr.org/zenko/2015/04/17/guest-post-shifting-allegianc...

[Riaz Haq]

The regional security in South Asia and the adjacent regions to the west and north are on the cusp of a profound transformation. Broadly, there are three vectors involved here.

One, Iran’s integration with the international community as a ‘normal country’, a process that has already begun; two, the historic entente between Russia and China which has consolidated almost immeasurably in the past one year period since the New Cold War tendencies began appearing; and, three, a largely-unnoticed but extremely significant shift in the foreign-policy priorities of Pakistan, a genuinely ‘pivotal’ state in the politics of South Asia, given its highly strategic geographic location in the South Asian region, from where it impacts regional security in Central Asia and West Asia.

The state visit by the Chinese President Xi Jinping to Pakistan on Monday in many ways brings together the three vectors. The visit is, on the face of it, a bilateral event of historic significance to the long-standing ties between the two relationship, which from all accounts can be expected to add much strategic content to the relationship and elevate it to an altogether qualitatively new level.

However, China is also playing the long game insofar as Beijing is actually beginning the implementation of its “One Belt, One Road” initiative, which is a global project in character and scope and all but prefaces China’s inexorable rise on the world stage as a superpower.

It is extraordinary that China is committing such massive investment in excess 40 billion dollars in a single country, undeterred by the perception in the western financial circles that Pakistan is a “failing state” and a revolving door of international terrorism.

In the eighties or nineties, this would have lent itself to interpretation as “India-centric” and as a diabolical move by the Chinese policymakers to strengthen Pakistan’s capacity to challenge India, a common foe. But that is no more the case today. The impulses driving the Chinese policies toward Pakistan today are to be found elsewhere.

First and foremost, Pakistan’s stability has come to be a matter of serious concern from the perspective of China’s internal security needs, which is attributable not only to the spurt in terrorist activities in Xinjiang by groups that are to be traced to the Af-Pak region, but also out of China’s emergent concerns as a stakeholder in regional stability that is an imperative need to advance its regional and global policies (politico-military, economic and cultural) more optimally.

The dramatic shift in the Chinese thinking apropos of the issues of terrorism in South Asia and Beijing’s unmistakable empathy with India’s concerns as a victim of terrorism testify to this. A leading Indian daily brought this home today reporting from Beijing an extraordinary statement attributed to the head of the Chinese foreign ministry think-tank Institute of South and Southeast Asian and Oceanic Studies, Hu Shisheng that China finds itself “awkward diplomatically” to have taken a “neutral stand” on the terrorist attack on Mumbai in November 2011.

Hu said, “India’s concerns over terrorism will be addressed in a more constructive way. China also suffered due to terrorism.” He said China has suffered from U.S. double standards on terrorism and should not behave in a similar fashion.

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Without doubt, Pakistan (along with Central Asia and Iran) becomes a gateway for China to the world market and it is crucial for Beijing that Washington’s ability to block this gateway is “zero”. Pakistan is actually the single most critical gateway for China in the emergent paradigm. Arguably, that alone could explain the extraordinary extent to which China is making the stabilization of Pakistan a real-time dimension to its own national policies of development.



http://atimes.com/2015/04/pakistan-china-iran-and-the-remaking-of-r...