Pakistan – China Relationship and Infrastructure Development

Pakistan – China Relationship and Infrastructure Development

China is a modern developing country with good economic and political condition. It is the biggest ancient society with flair towards modern culture and values. China has very good relations with its neighbors like Pakistan and Russia. It is also working at its best to solve its problem with India. Pakistan was one of the first countries of the world to recognize China, and since then they have very good relations with each other. Any kind of change in both of these countries has good or bad impact on each other, and the region of South Asia.

China, not only developed its own infrastructure, but also provides economic aid and military equipment to Pakistan, which is very important for Pakistan to develop its infrastructure and due to its border and relations with India. India – China relationship during sixties provides a good opportunity for Pakistan to get all type of assistance from China. Any change in Chinese policy and economic conditions has great impact on Pakistan’s economy, as China is the major financer of Pakistan’s military and development projects like Ballistic Missiles, JF-17 Thunder aircrafts, Gwader Port etc. Any decrease in China’s economic growth level can reduce the economic and military aid towards Pakistan. Pakistan needs China’s help in developing the cooperation in economic projects like trade, energy and infrastructure development like Gwader port etc.

Pakistan needs energy resources and nuclear power plants from China as Pakistan is facing the energy crises in the country. China can provide these kinds of energy resources to counter the energy crises in Pakistan with infrastructural development and economic aid. Chinese government has singed some sort of infrastructural development projects with Pakistan, which will benefit both countries in increasing trade and water management resources. High development percentage of China has produced a positive effect on Pakistani markets by providing cheaper goods than to American and European manufacturers. China’s products are very much popular in Pakistani markets due to their prices and different choices in quality as according to people’s need.

Pakistan mostly gets benefits from China – Pakistan relations and agreements but there are some negative effects of this relationship on Pakistani economy at micro-level. Pakistani local manufacturers are unable to compete with Chinese manufacturers with respect to price and quality as Chinese manufacturers are producing goods at very low price than local Pakistani producers. Some local Pakistani manufacturers are changing their businesses, as they are unable to continue manufacturing because Chinese products are still cheaper in their markets. Government of Pakistan is also providing facilities to those traders, which are doing business with China. Due to these reason small Pakistani manufacturers are suffering badly.

Pakistan has very good relationship with its all time friend China that is positive for the security and peace in the Asian region. China has very good relation with Russia and other countries, which can also put positive impact on Pakistan, as Pakistan can solve some of its matters with Russia and India with the help of Chinese diplomats. It is very important for Pakistan to have such kind of friend, which always understands the needs and provide sufficient information and economic assistance that helps in changing the scenario in the country.

China has very well supported the Gwadar Port project in all fields like management, construction and finance. Gwadar port is the great symbol of Sino – Pakistan friendly relationship in new century. Gwadar port project was planned long time back in 1993 after the completion of its feasibility studies. Chinese Premier Zhu Rongji visited Pakistan in May 2001 and under - writes the Gwadar port project. On March 22, 2002, Chinese Vice Premier Wu Bangguo visited Pakistan and laid the foundation of the Gwadar project. These visits were very important for the peace and development of this region after 9/11 attacks and presence of US army in the region.

Phase I of Gwadar port project has been completed with the total cost of US$ 248 million of which China has provided the biggest portion of US$ 198 millions. Chinese Engineers and technicians have worked days and nights on this project and completed the first phase of three Multipurpose Berths, related port infrastructure, Tugs, and Survey Vessels etc. Chinese government also has invested US $ 200 million for the coastal highway joining Gwadar port to Karachi. China is continuing its financial and technical support for other phases, which will complete in future with the cost of US$ 526 millions. These next phases will feature construction of nine more berths.

This project is very much important and beneficial for both Pakistan and China. Pakistan needs another deep port sea away from Karachi so that in times of hostility naval ships does not get any kind of blockade. Pakistan also needs to develop the province of the Baluchistan into a business hub as it is very near to oil producing markets. China has a great interest in the blue waters with the Persian Sea and China does not have any port in this region. Gwadar port can be very important and may serve the purpose for China for both its military and oil resource needs.

Gwadar port is also important for China for creating a string of pearls with its strategic ports of Bangladesh, Srilanka, Burma, and South China Sea etc as eighty percent of Chinese oil resources move from these ports. This string may be the strategic defense line of China’s oil management and oil movement, which will give China a forward footing. This project is also solidifying the growing strategic relation between Pakistan and China in economic and technical fields. All Pakistanis warmly welcome Chinese support in the development of Gwadar port, as they really want Sino – Pakistan strong relationship in the presence of US military near around.

There have been some incidents of terrorism against Chinese Engineers working on Gwadar port project, which took some precious lives, but China continues its support for the project without any kind of delays. Pakistani people and government are very thankful to Chinese Government and people for their continue support of projects and economics assistance to Pakistan in all types of circumstances. Chinese support and assistance in Gwadar port project will leads to stronger Sino – Pakistan relationship in future.

China also played a very important role for developing the infrastructure in the most difficult mountains of boarder area of Pak – China called “Silk Road” and Silk route projects. This network of roads provided a huge opportunity for trade and business between both the countries and due to which both developed their infrastructure to create the trade zones. Pakistan has now 500 foreign companies out of which more than 60 are Chinese. The Chinese companies are working for infrastructure development sectors like telecommunications, energy, mining, and IT. Chinese companies are also working on high-level projects like Dams, Solar energy projects and petroleum. Pakistani government also welcomed Chinese entrepreneurs who wish to work for the infrastructure development projects in Pakistan. In the year 2008, Pakistan had the high level of activity in infrastructure sector. Construction, Housing, Power, and Energy development projects were design with the total estimated cost of US$ 30 bn.  Top priority projects include 969MW Nelum – Jhelum power plant, and Diamer Basha Dam with capacity of 4,500 MW. These projects are being built by the Chinese consortium consist of Gezhouba group and China machinery export corporation. Pakistan and China recently signed an agreement, during the visit of President Zardari, for hydel power development projects with the estimated cost of US$ 448 mn.

Transport sector in year 2008 have been benefitted with over US$900mn total cost projects. This is because the National Highway Authority of Pakistan plans to invest US$ 5.3bn in transport sector. In order to enhance trade between Pakistan and China and with a plan to include other countries in future, a project costing US$6.5bn has been started which will connect the North to the ports in the South of the country. China is also playing very important role in these projects with investment and technical assistance. China is planning to use the transport sector from the South to the North of Pakistan linking directly into Chinese part of the territory.

Pakistan – China relationship are boosting with joint development of infrastructure projects, which will save huge cost of transport to both the countries. Infrastructure development is taking as the backbone of the trade and economic development between both the countries. Pakistan badly needs the help & expertise of its great friend and neighbor China in the fields of power, energy and infrastructure development. Power, energy and water recourses open the way for infrastructure and construction industry in Pakistan. It is the time Pakistan can play a major role in cross border infrastructure, which will help Pakistan to solve its major political crisis. China needs to analyze the division of finances for these projects in Pakistan so that the estimated amounts are used properly and the projects should be completed within time. It is very important for both China and Pakistan that infrastructure projects are well guarded, analyzed and controlled to get timely development with high level of benefits.

………………………………………………………………………………………………………Asad Zeeshan