Pakistan Geo-Political Studies

Pakistan China Relationships

Group members
Hafsah Javed
Maryam Abrar
Taha Shahid Butt
BBA 7E
Timeline of Events Occurred between China & Pakistan
• 1950-Pakistan recognized People’s Republic of China. Pakistan was the third
non-communist country to recognize China.
• 1951-Established diplomatic relations.
• 1963-China and Pakistan signed first formal trade agreement. reached border
agreement. The boundary agreement provisionally demarcated the frontier
between both neighbors.
• 1963-China gave Pakistan US$ 50 million interest free loan to strengthen
economic cooperation.
• 1963-An air transport agreement was signed authorizing each other’s airlines
to land and operate along with other services.
• 1980s - China and the US provide support through Pakistan to the Afghan
guerrillas fighting Soviet occupational forces.
• 1986 - China and Pakistan reach a comprehensive nuclear co-operation
agreement.
• 1999 - A 300-megawatt nuclear power plant, built with Chinese help in Punjab
province, is completed
• 2001 - A joint-ventured Chinese-Pakistani tank, the MBT-2000 (Al-Khalid) MBT
is completed.
• 2001 - A joint-ventured Chinese-Pakistani tank, the MBT-2000 (Al-Khalid) MBT
is completed.
• 2003 - Pakistan and China signed a $110 million contract for the construction
of a housing project on Multan Road in Lahore
• 2007 - The Sino-Pakistani joint-ventured multirole fighter aircraft - the JF-17
Thunder (FC-1 Fierce Dragon) is formally rolled out.
• 2008 - China and Pakistan sign a free trade agreement.
• 2008 - Pakistan and China to build a railway through the Karakoram Highway,
in order to link China's rail network to Gwadar Port.
• 2010 - Pakistan and China conduct a joint anti-terrorism drill.
2010 - China donates $260 million in dollars to flood hit Pakistan and sends 4
military rescue helicopters to assist in rescue operations.
2010 - Wen Jiabao visits Pakistan. More than $30 billion worth of deals were
signed.
2013 - Management of Gwadar port is handed over to state-run Chinese
Overseas Port Holdings after previously being managed by Singapore's PSA
International.
 Summary:
• Since the late 1990s, economic concerns have gained prominence alongside the
military-strategic aspect of the relationship; specifically, trade and energy have
taken precedency.
• Over the years, frequent exchanges of high-level visits and contacts between the
two countries have resulted in a number of bilateral trade agreements and
investment commitments.
• Trade relations began shortly after the establishment of diplomatic ties in the
early 1950s, and the two countries signed their first formal trade agreement in
1963.
• A free trade agreement was signed in 2008, giving each country first-time market
access to the other.
• Trade between Islamabad and Beijing now hovers around $7 billion a year, and
both sides are set on raising the figure to $15 billion by 2010.

Pakistan’s Gwadar Port:

• The development of Gwadar Port is a key element of the greater China-Pakistan
Economic Corridor (CPEC). It speaks to both the strength of the China-Pakistan
relationship and the reach of China’s grand strategy.
• With Pakistan’s two other major ports operating near capacity with no room for
expansion, projects in Gwadar promise to eventually handle one million tons of
cargo annually, while also providing significant industrial, oil, and transportation
infrastructure.
• Though a “monument of Pakistan-China friendship,” there are misgivings on both
sides about CPEC, including the safety of Chinese workers, the resentment of
Baloch nationalists, and the growing debt trap created by the project.
• The CPEC is projected to link Kashgar in Xinjiang with Gwadar on the Makran
coast of Balochistan, the largest province of Pakistan. It is expected to bring
economic prosperity to the region and is part of President Xi Jinping’s “dream of
national rejuvenation.”
• Together the two countries have been tirelessly encouraging Afghanistan, Iran,
and Russia to join CPEC for mutual benefit. India opposes CPEC, as the project is
being built through disputed territory in Gilgit-Baltistan and Pakistan-occupied
Kashmir (PoK).
• Gwadar port is being built in phases. When completed, it will have three 200-
meter-long berths and one Ro-Ro (roll on-roll off) facility. At present the port has
the capacity to handle 50,000 deadweight tonnage (DWT) bulk carriers drawing
up to 12.5 meters.
• A $2 billion oil refinery is planned to be set up near Gwadar. The port is being
developed by the China Overseas Port Holding Company (COPHC), to which it
 was leased by the Pakistan government for 40 years in April 2017. The final
expansion of the port and ancillary systems will be undertaken by the Chinese.
• Funds for this ambitious project will be provided by China both through the Asian
Infrastructure Investment Bank (AIIB) and by way of direct government-to-
government soft loans.
• To help China to recover its capital investment, China will get a 91 percent share
of the revenue from the operations of the port and the terminal and 85 percent
of the revenue generated by the free zone.
• Under this arrangement, though the port is expected to handle 1 million tonnes
of cargo annually, the impression in Pakistan is that benefits will accrue mainly to
the Chinese.
• Also, there are misgivings within Pakistan regarding the debt trap that the huge
investment in CPEC will result in.
• The Pakistani elite are no doubt watching the disaster that the developments of
Hambantota port and international airport have been for Sri Lanka.
• Both China and Pakistan view the development of Gwadar port as a win-win
situation. The CPEC is part of China’s Belt and Road Initiative (BRI) that seeks to
extend China’s strategic outreach deep into the Indo-Pacific region and counter
U.S. influence in the Indo-Pacific.
• Gwadar: Emerging Port City or Chinese Colony? Is still a question which has yet to
be answered.

Transition from Political to Economical Relationship

In the first six decades, the relationship between Pakistan and China was mostly
limited to the political sphere.
• There were frequent exchange visits of leadership of both countries to each
other. Both countries supported each other on domestic issues, as well as on
regional and international issues.
• The Foreign Offices of both countries kept close coordination which resulted in a
complete harmony on international affairs.
• We made big strides in bilateral ties and many MoUs were signed between the
two countries.
• With the launch of ‘One Belt One Road’ (OBOR) initiatives and signing of the
China-Pakistan Economic Corridor (CPEC), Pakistan and China entered a new era
in their relationship.
• In addition to the already strong political and military relationship, economic
relations have improved exponentially.
• Chinese investments are pouring into Pakistan, several mega projects have been
launched in power generation and transmission.
• Basic infrastructure like motorways, railway, airports, seaports, oil and gas
pipelines, optical fiber linkages are being upgraded and strengthened.

Future Perspective:
• For Pakistan, despite some misgivings around debt obligations associated with
the CPEC, China remains the largest source of foreign investment, as well as a key
strategic ally. Sino-Pakistani co-operation has grown beyond the economic
sphere to include defense and security. In this context, the Gwadar port as one of
the four prongs of the CPEC could serve as a potential future naval base for
China. The CPEC will remain the fulcrum around which the two countries are set
to enhance co-operation in the coming years.
• Pak-China cooperation is vital to the protection and promotion of international
peace and security in a multi-polar system confronted with serious challenges.
• While the benefits to transit may be illusory, it is possible that Pakistan could
benefit from purportedly low-hanging fruit, including the much-lauded economic
zones and power plants.
• Pakistan does struggle with power shortages. But its problem is not a lack of
supply, rather the complex issue of “circular debt” referring to the accumulating
unpaid bills of the power sector; the theft of power through illegal connections,
meter tampering, and other means; and an inadequate transmission system.
• Meanwhile, Pakistanis have learned that the current Chinese development model
will do little for their economy. China prefers to use its own companies and
employees rather than hire locally.