Sunday, 21 September 2014

Pakistan ties stand test of time

Copying the story from

By KRISHNA KUMAR VR in New Delhi / China Daily Asia Weekly
Postponement of Chinese president’s visit will not affect ever-deepening bilateral relations
Pakistan ties stand test of time
A project to connect Gwadar Port (above) in southern Pakistan to China’s Xinjiang Uygur autonomous region in the northwest will serve as a primary access for trade between China, the Middle East and Africa. (AFP)
“China and Pakistan are good friends, good partners, good neighbors and good brothers weathering all the storms together and sharing all the weal and woe. And China will continue, as always, to attach priority to Pakistan in its relations with the neighboring countries.”Though Islamabad is not on President Xi Jinping’s upcoming South Asia itinerary, the above statement voiced by Xi during his meeting with his Pakistani counterpart Mamnoon Hussain at the beginning of this year in Beijing tells the story of the two countries’ extraordinary bilateral relations.
Xi reiterated these thoughts when he met Prime Minister Nawaz Sharif in April on the sidelines of the Boao Forum for Asia (BFA) in South China’s Hainan province.
Since establishing diplomatic ties in 1951, China and Pakistan have enjoyed a close and mutually beneficial relationship, including numerous high-level visits.
Meanwhile, media reports suggest that despite the postponement of Xi’s visit to Pakistan next week due to anti-government protests in that country — which has delayed the signing ceremonies of several projects — both countries are exploring various options to keep the momentum of bilateral relations going.
“The Sino-Pakistan relationship is a time-tested bond,” Iftikhar Ali Malik, vice-president of the Chamber of Commerce and Industry at the South Asian Association for Regional Cooperation, tells China Daily Asia Weekly. “It is rock solid.”
Ali Malik, who has hosted several Chinese leadership and business delegations, is of the view that the postponement of one visit cannot jeopardize the billion-dollar Chinese investments in Pakistan. “Many high-level bilateral visits have happened in the past, and will continue to take place in the future,” he says.
Chinese Premier Li Keqiang, on his first official overseas tour, said in Islamabad that “the China-Pakistan friendship has stood the test of hardship and is more precious than gold”.
Following this, Sharif made Beijing his first overseas visit, shortly after taking the oath of office.
On his second visit, Sharif fully endorsed Xi’s proposal of reviving the ancient trade routes connecting China, Central Asia and Europe, as he said the revival of the Silk Road could help bring economic growth and prosperity to the region.
Pakistan’s geographic location supplements the potential of the Silk Road and enhances the scope of its revival.
“Pakistan has geographic advantages to promote economic development in the region,” says Li Qingyan, research fellow at the department for international strategic studies at the China Institute of International Studies in Beijing. “China’s new leadership attaches great importance to cooperation and integration with South Asia countries.”
Li says that when Xi visits Pakistan, the two countries will consolidate the foundation of building the economic corridor which is regarded as an important component of the Silk Road Economic Belt initiative.
The China-Pakistan Economic Corridor is an under-construction project to connect Gwadar Port in southern Pakistan with the Xinjiang Uygur autonomous region in Northwest China, via highways, railways and pipelines to transport oil and gas.
The billion-dollar corridor, once completed, will serve as a primary access for trade among China, the Middle East and Africa.
In particular, oil from the Middle East could be offloaded at Gwadar, which is located just outside the mouth of the Persian Gulf, and transported to China through Baluchistan province in Pakistan.
At present, more than 85 percent of China’s energy imports from the Middle East and mineral resources from Africa currently transit through the Indian Ocean.
“It is a win-win economic corridor,” says Hafeez Ur Rehman, chairman of the department of economics at Lahore-based University of the Punjab.
“Pakistan can reap the economic benefits of the corridor, especially for its underdeveloped region,” he says. “China’s western regions are also not so developed compared to the eastern coastal areas: By focusing on westward trade, it can bring economic benefits to the region.”
The economic corridor, first advocated by Chinese Premier Li, will play a crucial role in regional integration. It will connect China, Iran, Afghanistan, Central Asia and Myanmar.
The other projects proposed and finalized by the two sides include construction of the Karakoram Highway to Islamabad; a new airport at Gwadar, close to the border with Iran on the Arabian Sea; and the economic zones in the region.
To meet Pakistan’s energy needs, which in turn will boost the domestic economy, China has agreed to build 14 power plants in the country.
The power projects, with a total electricity generation capacity of 10,400 megawatts, are expected to be started immediately and put into operation by 2018. At present, the country faces an energy shortfall and the demand for electricity is rising by 8 percent every year.
“Once energy needs are taken care of, the economic development will happen on its own,” says Mustafa Hyder Sayed, executive director of the Pakistan-China Institute.
According to Pakistan official estimates, China is investing more than $35 billion in Pakistan’s energy and infrastructure. China has already committed $6.5 billion to build a new nuclear power plant in the southern city of Karachi.
Experts say that earlier China and Pakistan ties were defined in terms of strategic and military outcomes. However, the need to shift the discourse in terms of economic development is now being recognized.
“We also need to focus on technology transfer and the small scale sector,” adds Sayed.
The majority of Chinese companies in Pakistan are largely working in the oil and gas, IT, telecom, engineering, and mining sectors.
The two countries have also seen a significant expansion of trade in the last couple of years.
“Trade has seen considerable improvement after the FTA (free trade agreement) was implemented in 2007,” says Syed Mazhar Ali Nasir, vice-president of the Federation of Pakistan Chambers of Commerce and Industry.
“China has been contributing significantly to Pakistan’s imports even before the FTA was signed. Now Pakistan traders need more access to Chinese market,” he says.
The China-Pakistan Free Trade Agreement is the only such deal signed between China and a South Asian country. The free trade negotiations were concluded in 2006 and the agreement came into effect in 2007.
According to official data, bilateral trade between China and Pakistan touched the $13 billion mark in 2013, and is expected to reach $15 billion by 2015. In 2008, bilateral trade between the two countries was $7 billion.
“China enjoys very positive relations with Pakistan,” says Muhammad Ali Kemal, research economist at the Pakistan Institute of Development Economics in Islamabad. “There are signs of improving political stability in Pakistan as well, and if so, this will further boost Chinese investment and trade into the country.”

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