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  • Dec 15th, 2016
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Since the establishment of diplomatic ties between the two countries in 1951, Pakistan and China have immense reservoir of goodwill and soft power. Usually Pakistani and Chinese leaders and people use six expressions to describe this unique relationship: it is higher than the mountains, deeper than the oceans, sweeter than honey, and stronger than steel. It is also an all-weather and time-tested relationship.

The period between 1957 and 1969 saw a very important phase in the history of the Sino-Pakistani relations. During this period, historical changes took place in the bilateral relations, and the change of Pakistan from being hostile toward friendly with China opened a new chapter in the Sino-Pakistani relations. Pakistan advocated and supported China in admission in UN system and getting permanent membership. It is important that for several years PIA was the only Airline in the world (of Capitalist block/ Right wing) which is allowed to land in China. No Airline from Europe, USA or other countries was allowed to land in China. Resultantly anyone from USA, Australia and Western Europe if want to visit China he was bound to use PIA only in past.

At present, China is the world fastest growing economy and its GDP has increased from US $50 billion in 1978 to 10.35 trillion US dollars in 2015, making China the world's second largest economy. China's contribution to world economic growth now stands at 30%. China's total imports and exports reached almost four trillion dollars last year, ranking ?rst in the world. China's high-speed railway operation mileage is over 12,000 kilometers, almost half of the world's total. Last year, the number of outbound Chinese tourists was close to 100 million, making China the world's largest source of outbound tourists. Also last year, the number of China's mobile phone users reached 1.17 billion, which is the No 1 in the world.

Trade Relations between Pakistan and China On the trade front, Pakistan accorded the Most Favoured Nation (MFN) status to China in 1963 through a bilateral trade agreement which provided a level playing ?eld to Chinese products imported in Pakistan.In January 1963, ?rst trade agreement was also signed. In October 1982, a joint committee for economic, trade and scienti?c and technological co-operation was established. On February 13, 1989, the two countries signed bilateral investment protection agreement. Since then, both countries have closely collaborated to deepen economic and trade relations.At present, Bilateral trade between Pakistan and China has reached to US $18.95 billion in 2015(as per China's available statistics) and is favour of China comprised of Pakistan's export to China US $2.47 billion and imports from China were US $16.48 billion. Pakistan and China both countries signed Free Trade Agreement (FTA) in 2007. Before implementation of FTA, the trade volume was $4.1 billion. Pakistan's imports from China were US $3.53 billion, while Pakistan's exports to China were only US $575 million in the pre-FTA era. Pakistan's exports to China included cotton fabrics, cotton yarn, bed wear, surgical instruments, tent and canvas, marble, ?sh and its preparations and leather. Almost around 80% of its exports consist of cotton yarn and other textile products but textile products are not covered in FTA. Pakistan's import from China included electrical and electronic equipment, machinery, iron and steel, plastic goods, mobile phones, organic chemicals, garments and other textile products, stationery products, construction materials like tiles, sanitary wares, fertilizer and crockery etc.

Pakistan and China are natural trading partners. The territories comprising the present state of Pakistan were once part of the historic silk route connecting China with the West where merchants traded in various commodities such as spices, silk and porcelain. The China and Pakistan Economic Trade Corridor also relies on these opportunities to revive the ancient silk route to facilitate China's connectivity with the West.

Investment Relations between Pakistan and China:

During the recent year, the Chinese investment in Pakistan has increased to US $700 million compared to US $100 million in 2011. The China has invested in Pakistan in telecommunications, energy, infrastructure, heavy engineering, IT, mining and defense related industries. The Pakistan Aeronautical Complex, Karakorum highways, Heavy Industries Taxila, several factories and production lines in the Pakistan Ordnance Factories, maritime projects for the navy and missile factories have been set up with Chinese assistance. In the 1970s and the 1980s, China set up major industrial units like the Heavy Mechanical Complex and the Heavy Forge Factory that helped build Pakistan's intrinsic technological and industrial base.

During the last visit Chinese premier, both countries signed agreement of US $45 billion for China Pakistan Economic Corridor and at the time visit of Prime Minister of Pakistan to China; both countries signed almost 19 agreements on mega projects relating to electricity generation.

These projects The Federation of Pakistan Chambers of Commerce and Industry 13 include the 330 MW Thar coal-?red power plants, Suki-Kinari hydropower project, the 660 MW Muzaffargarh coal-?red power project, 660 MW coal-?red power project in Qadirabad, district Sahiwal, a 99 MW UEP power project and the 900 MW Quaid-e-Azam solar power station projects.

China Pakistan Economic Corridor: The new proposed Pakistan-China Economic Corridor (CPEC), which has strategic connotations when implemented, should provide a huge boost in transforming Pakistan's economic landscape by linking south, central and western Asia. The CPEC comprising almost 3000 kilometer highway stretching from Kashgar to Gwadar is a giganticmilestone for Pakistan.This framework ofregional connectivity will open upwest China to south and contribute to 'One Belt One Road' initiative policy. The project is an impressive collaboration for Chinaand Pakistan but especially for thelatter where it will be a game changerfor human development and economicgrowth. Extending from the KarakoramHighway that links China's Province of Xinjiang with Pakistan's northregion, the infrastructure project willbe building economic zones along thecorridor. CPEC will bring a conservative investment of US $45 billion over the next 15 years. It will also establish energy and transport infrastructure laying the foundation for an unimaginable supply chain, numerous industry and services clusters and small cities.At present, the government is also un-cleared with the road routes of CPEC. Moreover, the business community of Pakistan also requested equity participation in the Chinese investment in Pakistan. Another important issue is link with the provision of security to the investors, because most of the projects are located in the insecure areas of Baluchistan and KPK province. Government of Pakistan should seriously consider the economic bene?t of CPEC because it is a game changer which will change the fortune of KPK, Sindh and Baluchistan province.

The Gwadar port is strategically important also for China because it will enable China to more safely and reliably import oil, as its economy is heavily dependent upon the oil from the Persian Gulf. At present this oil passes via a very long route through the Strait of Malacca, which is under US in?uence. After this oil has reached Shanghai or the Chinese East Coast, it has to be transported thousands of miles inland to the West of China. By using Gwadar port Chinese shipping can avoid from the risks of vulnerability to pirates, bad weather, political rivalries, and other economic losses. By using Gwadar port Chinese goods will ?nd an easier, shorter and secure route to the Middle East, increasing volume of trade and pro?tability. The development of Gwadar port and free economic zones have long term and far reaching impacts on the economic development of China, Iran, India, Afghanistan and Central Asian Republics. This development will provide a gateway to the landlocked countries in central Asia through Arabian Sea, as Gwadar has the potential to acquire the status of the main gate to Strait of Hormuz and it can compete with the UAE ports by improving the exiting links to Caspian Region. Now, to bring the economy out of the present crisis, the policy makers have focused on developing a trade corridor among the central Asian countries, China and Middle East through Gwadar sea port in Pakistan.

At present, Pakistan is facing many challenges including terrorism, energy crisis, population explosion, water scarcity, climate change, volatile economic growth, poverty etc and in this situation Chinese investment is need of hour which not only create employment opportunities it also help in expanding our relation. On the other side, Pakistan investors should also explore Chinese market by investing in their projects and learn low cost technology for providing cost effective products in Pakistan.

The relationship between Pakistan and China became closer and stronger with the passage of time. Both states are enjoying deep diplomatic, defense, economic and cultural ties. So, it can be said that the future of this friendship will be bright and prosperous. Pak-China Socio-economic relations are playing important role to attain their mutual concerns for the economic development. In future, strong Pak-China socio-economic relations will be bene?cial to bring regional prosperity and development.

Copyright Business Recorder, 2016


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