During my tenure as the ambassador of Pakistan to Iran from 1997 to 2003, an Indian foreign secretary visiting Tehran boasted in confidential exchanges with his Iranian interlocutors that India would raise its economic and commercial ties with China to such a high level as to neutralize the Pakistan-China strategic partnership. His remarks not only revealed India’s ill intentions towards Pakistan but also indirectly underscored the importance of strengthening Pakistan-China cooperation in economic and commercial fields in addition to developing mutual ties in political, security, and cultural spheres.
Since then India has consistently pursued its policy of developing rapidly its economic and commercial ties with China. India’s trade with China, which was estimated to be only US$2.92 billion in 2000, rose to US$70 billion in 2013. By way of comparison, Pakistan-China trade was estimated to be US$12 billion last year. President Xi Jinping, during his visit to India in September, also committed US$20 billion worth of Chinese investment in India over the next five years. Thus, there has been substantial growth in China-India economic and commercial ties over the past decade and a half.
In view of the enduring threat that India poses to Pakistan’s security because of its hegemonic designs in South Asia and outstanding disputes like Kashmir and Siachin, the importance of Pakistan-China strategic partnership cannot be over-emphasized. The growing US tilt in favour of India to counter the expansion of China’s power and influence in South Asia and the Indian Ocean regions makes the strengthening of Pakistan-China friendship a strategic imperative for both countries. It is, therefore, important to provide greater strength and substance to this vital relationship through increased cooperation in political, security, economic, commercial and cultural fields.
Prime Minister Nawaz Sharif’s recent visit to China assumes special significance against the background of the foregoing. His meetings with President Xi Jinping and Premier Li Keqiang focused on strengthening bilateral relations besides the exchange of views on regional issues. The Chinese leaders reiterated their support to Pakistan in developing its economy and maintaining regional stability. For his part, Prime Minister Nawaz Sharif assured the Chinese President that Pakistan would “continue to resolutely fight the East Turkestan Islamic Movement (ETIM) terrorist forces.”The Chinese leaders must have welcomed this assurance in view of their accusations against ETIM of involvement in terrorist incidents in its Xinjiang province. There have also been allegations of ETIM’s links with the terrorist groups in Afghanistan and Pakistan’s tribal areas. Pakistan and China further agreed to enhance mutual coordination on Afghanistan so as to strengthen regional peace and stability. Thus, Nawaz Sharif’s exchange of views with the Chinese leaders did help in strengthening further the bonds of friendship and mutual cooperation on critical regional issues.
During the visit, 19 agreements and memorandums worth US$42 billion of Chinese investment in Pakistan were also signed. The deals involved investment by Chinese state-owned companies in the power and infrastructure sectors in Pakistan. Specifically, the deals covered investment in a number of coal-fired power plants as well as in Suki-Kinari hydropower project, a 900MW solar power project, and a 50MW wind power project. In addition, the agreements/MOU’s also aim at providing Chinese investment for the development of the China-Pakistan Economic Corridor linking China’s West with Pakistan’s southern port of Gawadar in close proximity to the Persian Gulf and the Middle East regions. While the implementation of these agreements on a fast track basis would help Pakistan in overcoming the energy crisis and would open new avenues of bilateral and regional economic cooperation, they raise a number of questions to which the government must provide satisfactory answers to overcome the concerns being expressed by different quarters in the country.
Firstly, doubts have been expressed about the economic competitiveness of coal-fired power plants to be set up under agreements signed with China. It is, therefore, incumbent upon our government to make available to the public full information about the financial terms and conditions of these agreements, especially the estimated cost of production per unit of electricity and its comparison with the cost per unit of similar coal-fired projects in other countries as well as with the cost per unit of electricity generated through other means.
Secondly, the government should provide to the people all relevant information about the quality of the technology that would be used in the planned coal-fired power generation projects, their environmental impact, the availability of the local or foreign coal for these projects, and the transportation cost for bringing the coal to the project sites. Will our creaking railway system be able to bear this additional load?
Thirdly, what is the time frame for the completion of the power projects under the various agreements signed in Beijing? Have these projects reached or crossed the stage of financial closure or are they merely MOUs still awaiting detailed negotiations for finalizing the agreements?
Similarly, the details of the various projects planned under the China-Pakistan Economic Corridor should be made available by the government together with their likely dates of completion.
Obviously, all initiatives for strengthening Pakistan-China economic and commercial cooperation must be welcomed as being in Pakistan’s best interest as long as they meet the standards of economic justification, efficiency, competitiveness, and profitability. One would assume that these and other relevant considerations like environmental impact were taken into account before the agreements were signed with the Chinese. If this indeed is the case, we must thank our Chinese friends for their willingness to invest the huge sum of US$42 billion in the power and infrastructure sectors in Pakistan in the coming years.
At the same time, I would like to express the hope that our leaders and senior officials learn the lesson of self-reliance which has been the hallmark of China’s economic policies for several decades now. China has achieved the miracle of its remarkable economic progress not by borrowing loans and begging for aid from other countries. Instead, China raised the funds for its development domestically by raising its national saving rate. China’s experience in accelerating its rate of economic growth during the past three and a half decades through its own resources is worth emulation by Pakistan.
In December 1978, China under Deng Xiaoping assigned the highest priority to the goal of rapid economic development and subordinated everything else to its achievement. In pursuance of this over-arching or supreme goal, China adopted the policies of reforms and opening to the outside world. It also adopted a policy of peace in its neighborhood. It raised the national saving rate to about 50% of GDP by adopting simple lifestyles and limiting the military expenditure which was brought down to about 1.5% of GDP by 1988 from the high level of 6% or more in late 1970’s.
The reforms increased the productivity of the Chinese economy by introducing the elements of competition and market forces in its management and functioning. The high national saving rates enabled China to raise its national investment rates and accelerate its economic growth without having to borrow loans from donor countries or institutions. It is shameful that Pakistan’s national saving rate currently is as low as 13% of GDP forcing us to beg or borrow for meeting our developmental requirements. Austerity, therefore, is an indispensable condition for Pakistan to break the begging bowl. In addition, we must institute reforms to increase the productivity of the economy through increased reliance on competition and market forces, and putting an end to corruption which is eating into the vitals of our society.

 The writer is a retired ambassador and the president of the Lahore Council for World Affairs.

javid.husain@gmail.com