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What’s in it for China?




By Imtiaz Gul

Friday Times, May 06, 2016


“China is reportedly upset over the slow progress made in awarding the $2-billion commercial contract that includes laying a gas pipeline and setting up a LNG terminal in Gwadar,” according to a newspaper report on May 3. “The commercial bid for the contract… had not been opened yet,” the report said, and “even after several months, no decision has been taken on the contract, much to the dismay of the Chinese side.” Another report the same day said political parties in the Khyber Pakhtunkhwa province vowed “to go to any extent” to get the province its fair share in China-Pakistan Economic Corridor project.

Chinese President Xi Jinping had elevated the relationship between the two countries to a new geo-strategic level with his Islamabad visit exactly a year ago, when he signed several cooperation and investment agreements worth $46 billion with Islamabad, under the China-Pakistan Economic Corridor (CPEC) flagship initiative. This flowed from President Xi’s idea of One Belt One Road (OBOR) reflected also in some $110 billion worth of investments that China made in 49 countries last year.

Some are calling it a Chinese tool for economic colonization

According to Ms Xiheng, a deputy director general and advisor on international cooperation at the Development Research Center of the State Council of China, this reflects the consensus within China on outward expansion. Unlike the past decades when Beijing was inviting Foreign Direct Investment, it is now investing abroad, she says, because three decades of rapid growth and development have given the Asian giant a competitive advantage. “And now, we want to make use of this advantage – our ability for outbound investment –  to help other disadvantaged countries. This underlines our desire to share the fruits of development with all those interested in peace and development,” she said during a recent dialogue at Beijing.

Does the CPEC project enjoy a similar national consensus and resolve in Pakistan? Is our national leadership geared to capitalizing on the fruits being offered by China? Discussions with economic experts such as Ms Xiheng suggest that the Chinese leadership has set clear goals for equitable inclusive national development and expansion, i.e. to grasp opportunities from outside to achieve our development, and create their own opportunities to expand relations with the outside world. In the past China did that by reform and the global labour restructuring. That helped make possible a fast and robust development in 30 years. But improving cost of production and accumulation of capital has emboldened the country to invest abroad. In this context, OBOR aims at producing new opportunities for China and for the world, because no country cannot develop in isolation.

Chinese officials and academia rubbish the notion of OBOR being a geo-political tool of domination. They insist economies develop in an open environment, rather than in exclusion. If poorer countries are interested in joining the OBOR, it can become an engine for regional and global economy and for helping disadvantaged local communities.

They are mindful that:a)   divergent opinions by different countries about OBOR (some calling it a Chinese tool for economic colonization)

  1. different political systems in potential partner countries that complicate decision-making there
  2.  misconception among many (that OBOR is a merely Chinese compulsion) and thus the reluctance to offer financial equity for developing the requisite infrastructure
  3. communication gaps between China and the partner countries as well as within China and the partner country, and
  4. expressions of wrong words” by media about Chinese initiatives

are some of the pressing challenges that the OBOR initiative faces. They use CPEC related controversies in Pakistan as a reference for highlighting these operational difficulties.

Some of these issues resonated at the aforementioned dialogue, hosted by the Chinese Association for Friendship (CAF) at Beijing. Led by Dr Shoaib Suddle, one of Pakistan’s most respected retired police officers, Pakistani delegates explained to the hosts the socio-political dynamics of their country and advised them not to react in a knee-jerk way to events such as a protest in the capital, or reservations by Balochistan and Khyber Pakhtunkhwa to CPEC.  Not a single party is averse to China, Pakistani delegates explained, and officials in Beijing will have to live with the reality.

The two sides also addressed issues such as security threats to CPEC – driven by geo-political factors as well as trans-border terrorism. The India-Pakistan acrimony and the current state of Pakistan-Afghanistan relations were also discussed, because Chinese experts believe this triangular relationship is the key to regional economic integration and peaceful development. Risks of regional countries disturbing peace in Pakistan through anti-state militant forces and the arrest of Kulbhoshan Yadev – an alleged RAW operative in Pakistan – also came up.

That is why some of the senior Chinese and Pakistani delegates suggested the inclusion of regional players like Iran and India is an unavoidable necessity for regional stability and the realization of the goals of OBOR.

Presentations by Chinese experts on South Asia were reassuring as far as the “unflinching Chinese support” for Pakistan is concerned. As of now, this support is considered “given and automatic because of the deep-rooted ties.” Yet, they also ventilated their concerns on security as well as high expectations from Pakistan. They underscored the need for a more comprehensive joint approach to counter common threats such as terrorism and religious extremism.

Wang Shijie, a former special envoy to the Middle East, said the only way to mitigate difficulties is a continued dialogue. Think tanks are bridges between the governments, public and the media, and can help improve communication, he said. But Chinese officials and intelligentsia seem to struggle with some of the realities that govern multi-cultural, politically diverse societies with free media.

Absence of any visible reforms in FATA, the fallout of Mumtaz Qadri’s execution, the perceived expansion of ISIS in the region, and the continued discord between Islamabad and the Khyber Pakhtunkhwa province are seen as irritants by the Chinese leadership, which expects Pakistanis to match their expectations with sustained action.

Prof Wang Xu, a Pakistan expert at the Peking University, says Islamabad needs long-term counter-radicalization strategies and the need to be able to identify threats to Pakistani and Chinese interests embodied in CPEC.

Most Chinese officials appear to be happy with the swift creation of special security division that the army has raised for the protection of the Chinese people working on various projects in Pakistan. They expect civilians to respond with similar pace and accord on CPEC related projects.

The politicization of CPEC doesn’t augur well for the period beyond 2019-19 – the most critical timeline as far as the Chinese priority for this initiative is concerned. Money needs a safe and non-controversial environment to be parked in. Pakistan’s leadership will have to put their heads around this point lest this “game-changing bailout” is lost.

Imtiaz Gul is the executive director of the independent Centre for Research and Security Studies

Email: imtiaz@crss.pk