The ‘all-weather friendship’ between Pakistan and China is an oft-quoted description of this important strategic relationship. With the recent visit of President Xi to Pakistan, the Sino-Pak relationship is likely to transform into an economic partnership. Andrew Small, a transatlantic fellow at the German Marshall Fund of the United States, recently published his important book ‘The China-Pakistan Axis: Asia’s New Geopolitics’ in which he has traced the historical evolution of the bilateral relations in the context of regional and global security. Small’s well-researched book draws upon a plethora of interviews and access to Chinese and Pakistani authorities. The book also predicted that the Sino-Pak interests were likely to converge even more in the future. I spoke to Small on the eve of Chinese President’s historic visit to Pakistan.
TFT: In your book you have presented data to show that economic relations between China and Pakistan are weak. However, President Xi’s visit and the agreements signed indicate that both sides mean business. Are these agreements likely to turn into concrete projects?
AS: The history of the economic relationship between the two sides would certainly give cause for skepticism. Many of the political, security and logistical issues that constrained economic ties between the two sides in the past haven’t gone away, and we’ve seen large headline numbers announced before. But I think there’s a bit more cause for optimism this time. The level of political momentum on the Chinese side behind the broader Silk Road strategy that underpins the China-Pakistan economic corridor is unprecedented. Different parts of the Chinese system are swinging in behind Xi Jinping’s signature initiative, trying to overcome the sort of obstacles that might previously have derailed projects in Pakistan and elsewhere. And lots of the agreements should be able to move ahead even if some of the most ambitious plans envisaged for the corridor – such as railways through the mountains – never come off. Large swathes of the intended investments are in the power sector, and much of the road-building work, for instance, isn’t intrinsically difficult to undertake. It seems unlikely that all of the projects will be realized but even if only a portion of them are, it would be a big economic boost for Pakistan.
TFT: What is driving the Chinese authorities to invest heavily in Pakistan’s infrastructure?
AS: There are economic and security motivations. China is in the middle of a significant transition in its economic model, which not only requires it to find new sources of growth in its western provinces, but also leaves huge industrial capacity that it needs to direct outwards rather than on the increasingly wasteful, low-yield infrastructure projects at home. The worsening security situation in Xinjiang, especially since terrorists struck cities such as Beijing and Kunming, has also meant that China places a greater premium on stabilizing its entire western periphery. And as aspects of China’s strategic rivalries in East Asia intensify, it wants alternative land and maritime routes that leave it less vulnerable to chokepoints in its sea lines of communication. China has also been worried about Pakistan’s long-term economic and political trajectory and, rightly or wrongly, thinks that large-scale investments are a means to help stabilize the country. All these factors add up to a much stronger Chinese push behind the projects than ever existed before.
TFT: China will operate Gwadar port for years to come. What are the strategic and economic implications of this development?
AS: It certainly makes it easier to move forward on both the economic – and potentially security – plans for the port than it was when the Port of Singapore Authority had the contract. Both the Chinese and the Pakistani sides have oscillated over the years between stressing the commercial and military value of the port, or dismissing the latter as scaremongering. But there is a strategic value for China to the Pakistani ports in general that transcends the trade rationale – the PLA Navy wants facilities that it can count on in a time of crisis and Pakistan is pretty much the only country that it trusts to provide them. The Sri Lankan elections and the Burmese political transition, two countries where China might have expected to have reliable port facilities that it could use in the years to come, illustrate how important – and rare – that is. In the short-term though, most of the developments at Gwadar will be on the economic side, and the Chinese companies will be able to proceed much faster with the second phase of plans for the port that have been stalled for some time. There are still big question-marks over whether the ambitions to make it a thriving commercial port will come off though, given the situation in Balochistan. That will probably be the biggest test case for the success of the corridor in the long term.
TFT: Terrorism seems to have been discussed and Operation Zarb-e-Azab has been referred to as a game changer. Do you think Chinese fears are allayed to a considerable degree?
AS: I think that Chinese concerns about Pakistan’s willingness to crack down on Uighur militant groups have been mitigated by Zarb-e-Azb. That had been a point of contention between the two sides in recent years, even if they treated the matter very delicately in public. China’s broader worries about militancy in the region have certainly not been calmed though, and Xi Jinping raised the matter on different occasions during the visit.
TFT: China’s deeper engagement in Pakistan is also viewed as a counterbalancing factor vis-a-vis India. How valid is this given that the Chinese also plan to extend economic cooperation and trade with India?
AS: China expects to be able to upgrade its economic and trade ties with India even if aspects of the two sides’ strategic competition intensify. I don’t think that, for the most part, China’s deeper economic engagement in Pakistan acts as a counterbalancing factor. China certainly wants to see a strong, capable Pakistan able to play that role, and that needs an economic underpinning. But with some very specific exceptions – infrastructure in Kashmir, ports with military utility and so on – a better China-Pakistan economic relationship isn’t intrinsically problematic for India, and may even yield some economic and security benefits. The China-Pakistan military relationship will continue to be an obstacle to closer China-India ties though, of course.
TFT: China’s role in Afghanistan is being supported by the US and other powers. Do you think that this involvement is likely to yield regional stability?
AS: China has a unique role to play in Afghanistan. It is rare among external powers in being trusted by almost every party involved in the conflict there. It is one of the few countries with the capacity to offer a big economic carrot now that the Western powers are pulling back their commitments. And its special relationship with Pakistan gives Beijing the scope to provide a mix of pressure and reassurance over what sort of future role Pakistan will play there. China has been pushing for a political settlement in Afghanistan – even pressing the Taliban directly on the matter during their meetings – and expects Pakistan to take its interests in this matter into account. So far China’s involvement had evidently not been sufficient to yield regional stability but I do think it’s already contributed to some of the political progress that has made towards getting an Afghan reconciliation process up-and-running.
TFT: With Iran likely to conclude a deal with the US on its nuclear programme, what would be China’s concern. China is also a trading partner of Iran. How would Pakistan-China relationship adjust, if at all?
AS: China has been a little nervous about the implications of an Iran deal. While it certainly stands to benefit from the normalization of Iran’s international position and the removal of sanctions, it is concerned about whether this will result in Tehran drawing closer to the Western orbit, politically and economically, over time. It has moved quite quickly to close some of the projects that have been hanging in the balance, such as the Pakistan-Iran pipeline, which should connect directly to the China-Pakistan Economic Corridor. Despite China’s nervousness, the shift in Iran’s situation should largely make it easier to move ahead with many of the Silk Road plans, given Iran’s strategic significance in the region and as an energy supplier.
TFT: What are the likely irritants or pitfalls you see in the realisation of this new phase of Pakistan-China partnership?
AS: If Pakistan’s relations with its neighbours head in the wrong direction, or if political factors inhibit the successful realization of the projects, China will be very displeased that its closest friend is responsible for the failure of one of Xi’s “flagship projects”. In those circumstances, Pakistan could really find itself cut out of the Silk Road plans, and hence much of the emerging economic architecture in the region. I think the Chinese will be more understanding of the security threats to the projects, which they know the Pakistani government is genuinely trying to address. China is also on the hook though – if it doesn’t come through on promises to deliver economic benefits to all regions of Pakistan, it will jeopardize its hard-earned non-partisan political status in the country. China is now far more visible than it ever has been in recent years, and although there are great hopes attached to these economic ventures, there are broad political risks associated with them too.
TFT: In your book you have presented data to show that economic relations between China and Pakistan are weak. However, President Xi’s visit and the agreements signed indicate that both sides mean business. Are these agreements likely to turn into concrete projects?
AS: The history of the economic relationship between the two sides would certainly give cause for skepticism. Many of the political, security and logistical issues that constrained economic ties between the two sides in the past haven’t gone away, and we’ve seen large headline numbers announced before. But I think there’s a bit more cause for optimism this time. The level of political momentum on the Chinese side behind the broader Silk Road strategy that underpins the China-Pakistan economic corridor is unprecedented. Different parts of the Chinese system are swinging in behind Xi Jinping’s signature initiative, trying to overcome the sort of obstacles that might previously have derailed projects in Pakistan and elsewhere. And lots of the agreements should be able to move ahead even if some of the most ambitious plans envisaged for the corridor – such as railways through the mountains – never come off. Large swathes of the intended investments are in the power sector, and much of the road-building work, for instance, isn’t intrinsically difficult to undertake. It seems unlikely that all of the projects will be realized but even if only a portion of them are, it would be a big economic boost for Pakistan.
Beijing wants facilities that it can count on in a time of crisis
TFT: What is driving the Chinese authorities to invest heavily in Pakistan’s infrastructure?
AS: There are economic and security motivations. China is in the middle of a significant transition in its economic model, which not only requires it to find new sources of growth in its western provinces, but also leaves huge industrial capacity that it needs to direct outwards rather than on the increasingly wasteful, low-yield infrastructure projects at home. The worsening security situation in Xinjiang, especially since terrorists struck cities such as Beijing and Kunming, has also meant that China places a greater premium on stabilizing its entire western periphery. And as aspects of China’s strategic rivalries in East Asia intensify, it wants alternative land and maritime routes that leave it less vulnerable to chokepoints in its sea lines of communication. China has also been worried about Pakistan’s long-term economic and political trajectory and, rightly or wrongly, thinks that large-scale investments are a means to help stabilize the country. All these factors add up to a much stronger Chinese push behind the projects than ever existed before.
TFT: China will operate Gwadar port for years to come. What are the strategic and economic implications of this development?
AS: It certainly makes it easier to move forward on both the economic – and potentially security – plans for the port than it was when the Port of Singapore Authority had the contract. Both the Chinese and the Pakistani sides have oscillated over the years between stressing the commercial and military value of the port, or dismissing the latter as scaremongering. But there is a strategic value for China to the Pakistani ports in general that transcends the trade rationale – the PLA Navy wants facilities that it can count on in a time of crisis and Pakistan is pretty much the only country that it trusts to provide them. The Sri Lankan elections and the Burmese political transition, two countries where China might have expected to have reliable port facilities that it could use in the years to come, illustrate how important – and rare – that is. In the short-term though, most of the developments at Gwadar will be on the economic side, and the Chinese companies will be able to proceed much faster with the second phase of plans for the port that have been stalled for some time. There are still big question-marks over whether the ambitions to make it a thriving commercial port will come off though, given the situation in Balochistan. That will probably be the biggest test case for the success of the corridor in the long term.
TFT: Terrorism seems to have been discussed and Operation Zarb-e-Azab has been referred to as a game changer. Do you think Chinese fears are allayed to a considerable degree?
AS: I think that Chinese concerns about Pakistan’s willingness to crack down on Uighur militant groups have been mitigated by Zarb-e-Azb. That had been a point of contention between the two sides in recent years, even if they treated the matter very delicately in public. China’s broader worries about militancy in the region have certainly not been calmed though, and Xi Jinping raised the matter on different occasions during the visit.
Chinese concerns about Pakistan's willingness to crack down on Uighur militants have been mitigated
TFT: China’s deeper engagement in Pakistan is also viewed as a counterbalancing factor vis-a-vis India. How valid is this given that the Chinese also plan to extend economic cooperation and trade with India?
AS: China expects to be able to upgrade its economic and trade ties with India even if aspects of the two sides’ strategic competition intensify. I don’t think that, for the most part, China’s deeper economic engagement in Pakistan acts as a counterbalancing factor. China certainly wants to see a strong, capable Pakistan able to play that role, and that needs an economic underpinning. But with some very specific exceptions – infrastructure in Kashmir, ports with military utility and so on – a better China-Pakistan economic relationship isn’t intrinsically problematic for India, and may even yield some economic and security benefits. The China-Pakistan military relationship will continue to be an obstacle to closer China-India ties though, of course.
TFT: China’s role in Afghanistan is being supported by the US and other powers. Do you think that this involvement is likely to yield regional stability?
AS: China has a unique role to play in Afghanistan. It is rare among external powers in being trusted by almost every party involved in the conflict there. It is one of the few countries with the capacity to offer a big economic carrot now that the Western powers are pulling back their commitments. And its special relationship with Pakistan gives Beijing the scope to provide a mix of pressure and reassurance over what sort of future role Pakistan will play there. China has been pushing for a political settlement in Afghanistan – even pressing the Taliban directly on the matter during their meetings – and expects Pakistan to take its interests in this matter into account. So far China’s involvement had evidently not been sufficient to yield regional stability but I do think it’s already contributed to some of the political progress that has made towards getting an Afghan reconciliation process up-and-running.
TFT: With Iran likely to conclude a deal with the US on its nuclear programme, what would be China’s concern. China is also a trading partner of Iran. How would Pakistan-China relationship adjust, if at all?
AS: China has been a little nervous about the implications of an Iran deal. While it certainly stands to benefit from the normalization of Iran’s international position and the removal of sanctions, it is concerned about whether this will result in Tehran drawing closer to the Western orbit, politically and economically, over time. It has moved quite quickly to close some of the projects that have been hanging in the balance, such as the Pakistan-Iran pipeline, which should connect directly to the China-Pakistan Economic Corridor. Despite China’s nervousness, the shift in Iran’s situation should largely make it easier to move ahead with many of the Silk Road plans, given Iran’s strategic significance in the region and as an energy supplier.
TFT: What are the likely irritants or pitfalls you see in the realisation of this new phase of Pakistan-China partnership?
AS: If Pakistan’s relations with its neighbours head in the wrong direction, or if political factors inhibit the successful realization of the projects, China will be very displeased that its closest friend is responsible for the failure of one of Xi’s “flagship projects”. In those circumstances, Pakistan could really find itself cut out of the Silk Road plans, and hence much of the emerging economic architecture in the region. I think the Chinese will be more understanding of the security threats to the projects, which they know the Pakistani government is genuinely trying to address. China is also on the hook though – if it doesn’t come through on promises to deliver economic benefits to all regions of Pakistan, it will jeopardize its hard-earned non-partisan political status in the country. China is now far more visible than it ever has been in recent years, and although there are great hopes attached to these economic ventures, there are broad political risks associated with them too.