Shehbaz, Xi cement new ties
PREMIER Shehbaz Sharif was honoured to be among the first few leaders to have been invited after the historic 20th National Congress of the Communist Party of China.
At a time when the world is grappling with multiple challenges, Pakistan and China stand together as friends and partners.
The Premier’s discussion with the Chinese leadership was focused on the revitalization of the CPEC among many other things.
The second phase of CPEC promises to usher in a new era of socio-economic progress that will uplift the quality of our people’s lives. Crumbling economy of Pakistan needs a lot to learn from the Chinese economic miracle.
New financial agreements between China and Pakistan are signalling shift in political alignments in the region with implications for South Asian neighbours, the United States and for the economic future of Pakistan itself.
China and Pakistan solidify the growing economic ties between the two nations following a meeting between President Xi Jinping and Prime Minister Shehbaz Sharif in Beijing.
Comprehensively, the two countries pledged bilateral cooperation in areas of economy, technology, industry, investment, infrastructure, space, vaccine, digitalization, standardization, disaster management, culture, sports and vocational education.
Between Pakistan and China, the economic ties were strengthened in 2013 with the establishment of the China-Pakistan Economic Corridor (CPEC), a collection of Chinese-funded infrastructure projects designed to upgrade Pakistan’s infrastructure and improve its economy.
The CPEC is a part of China’s Belt and Road Initiative. The economic relationship is not limited to trade and CPEC, as China is one of Pakistan’s largest lenders, holding more than 28 per cent of Pakistan’s debt.
The Pakistani economy has since partially rebounded. Pakistan has been facing currency devaluation and high inflation.
The country’s unwillingness to undertake significant economic reforms contributes to its deteriorating economy.
Pakistan’s problem is it doesn’t have enough foreign exchange reserves because the economy isn’t growing fast enough for it to get money. It is refusing to undertake structural reforms, which would enable the second and third tranches of the IMF and enable other foreign investors to invest money.
Pakistan’s borrowing from China, paying interest, deferring repayment to other countries like Saudi Arabia and looking to the IMF for bailouts has been quite critical.
This is a classic debt trap of its own making, only getting worse over the years as Pakistan skips nimbly from one loan to the next. It was beyond bankruptcy.
It rather was a state of collapse. In such brittle and crunchy economic conditions Chinese loans will be an injection to the Pakistani economy.
Shehbaz’s this visit symbolically confirms the growing alliance between China and Pakistan, but that it would not affect the strained relationship between Pakistan and the United States.
The once close relationship between the two nations has become increasingly estranged because of U.S. allegations that Pakistan harbours and sponsors terrorist groups and Pakistan’s frustrations with U.S. drone strikes and what it views as a violation of its sovereignty.
Pakistan and the U.S. both explicitly don’t want relationship necessarily to be part of those blocs. The relationship has been strained, but I would not characterize it as strained beyond repair. It is not a requirement for any country around the world to choose between the United States and China.
Premier Shehbaz Sharif is committed to reviving the halted multi-billion-dollar China-Pakistan Economic Corridor (CPEC) and expand trade and investment ties with the neighbouring and brotherly country by making optimal use of the second phase of the China-Pakistan Free Trade Agreement.
Launched in 2013, the CPEC is a corridor linking Pakistan’s Gwadar Port on the Arabian Sea with Kashgar in northwest China’s Xinjiang Uygur Autonomous Region, which highlights energy, transport and industrial cooperation.
The USD 60 billion CPEC is part of China’s ambitious Belt and Road Initiative (BRI), a pet project of President Xi Jinping. Pakistan can serve as the manufacturing base for China and an extension of its industrial and supply chain network.
The 21st century has demanded a new paradigm to deal with the emerging challenges as well as opportunities and to wean the region away from conflict and conflagration.
The two countries could fast-track bilateral cooperation to boost corporate farming, efficient water usage, development of hybrid seeds and high-yield crops and establish cold storage chains.
For magnificent results in growth of varied crops China has shifted its agriculture from conventional means to the technology based.
The two sides underlined to further strengthen coordination and collaboration within the framework of the Shanghai Cooperation Organization (SCO), and jointly push for deeper SCO cooperation across the political, security, business, connectivity and people-to-people fields, so as to better serve the common interests of regional countries, and make greater contribution to safeguarding regional peace and stability, promoting prosperity and development, and improving global governance.
The two sides signed and concluded a number of agreements and MoUs, covering bilateral cooperation in areas of e-commerce, digital economy, export of agricultural products, financial cooperation, protection of cultural property, infrastructure, flood relief, post-disaster reconstruction, GDI, animal disease control, livelihood, cultural cooperation, space, geosciences as well as law enforcement and security.
This cooperation has assumed an added importance to address common concerns related to food security.
The CPEC’s next phase would encompass key areas such as industry, energy, agriculture, ICT, rail and road network and developing Gwadar Port as a hub of trade and transshipment, investment and regional connectivity.
Our overall aim should be to harness the potential of CPEC for Pakistan’s inclusive and sustainable growth, socio-economic development and for improving the livelihoods of our people.
Unfortunately, Pakistan has been isolated during the last 3/4 years and was made controversial. Luckily, Premier Shehbaz Sharif during his recent visit has cemented ties with China which in fact is beginning of a new era.
—The writer is editor, book ambassador political analyst and author of several books based in Islamabad.