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A review of China-Pakistan Relations

By Zamir Ahmed Awan (People's Daily Online)    15:54, May 21, 2020

Pakistan and China have enjoyed close and friendly relations since the establishment of diplomatic ties in May 1951. Pakistan was one of the first countries that recognized the People’s Republic of China. Over the years, the relationship has blossomed into an “All-Weather Strategic Cooperative Partnership”. Pakistan sees China as one of its closest friends and partners, and China considers Pakistan its “Iron Brother”.

The bilateral relationship between the two neighboring countries is characterized by feelings of mutual trust, respect and goodwill towards each other. There is a regular exchange of visits at the highest level between the two countries, and the strategic cooperation between Pakistan and China has grown over the past several decades.

Economically, China is Pakistan’s largest trading partner and a major investor, especially in infrastructure and the energy sector. In 2018, bilateral trade between the two countries reached US$ 19.08 billion. With the official launch of the China Pakistan Economic Corridor (CPEC), the bilateral relationship has been elevated to a higher level. CPEC is a flagship project of Chinese President Xi Jinping’s Belt and Road Initiative. It aims to enhance connectivity and improve the infrastructure between Pakistan and China. Several projects are being implemented under CPEC for the enhancement of infrastructure and generation of energy. People-to-people contacts are an important aspect of the bilateral relationship. The year 2015 was celebrated as the Year of Friendly Exchanges between Pakistan and China, and several high profile events were organized including seminars, exchanges of visits and cultural events to highlight people-to-people interactions.

Leaders of both countries often pay mutual visits and maintain close contact, and consult with each other on all important issues. People to people contact has grown exponentially after the launch of the China-Pakistan Economic Corridor (CPEC).

Consultation Mechanisms:

Pakistan and China have several consultation mechanisms including the Strategic Dialogue at Foreign Ministers’ level, Political Consultations at Foreign Secretary/Vice-Minister level, consultations on South Asia, Arms Control, Counter-terrorism, and so on.

Bilateral Cooperation:

Defense:

Pakistan-China Defense collaboration forms the backbone of the relationship. This cooperation covers high-level military exchanges, structured defense and security talks, joint exercises, training of personnel in each other’s institutions, joint defense production and defense trade.

Economic & Trade Relations:

China is currently Pakistan’s largest single trading partner, while Pakistan is China’s second largest trading partner in South Asia. Major imports from China include machinery and mechanical appliances, metals, chemical products, mineral ores, plastic scrap and transport equipment. Main exports include cotton yarn, cotton fabric, rice, leather and fish products. Bilateral trade, which stood at US$ 1.3 billion in 2002, reached US$ 19.08 billion in 2018. To enhance bilateral trade volume, the two countries signed the second phase of the China Pakistan Free Trade Agreement (CPFTA) during the Pakistani Prime Minister’s visit in April 2019. CPFTA-II became operational from 1st December 2020. It would ensure a level-playing field in terms of concessions vis-à-vis other competitors, robust safeguard measures for the protection of domestic industry, improved tariff reduction modality, higher liberalized import value from China and lesser import value for Pakistan and attracting FDI into SEZs.

Investment:

According to the State Bank of Pakistan Annual Report 2018, during FY 2018, China was the biggest investor in Pakistan, with an investment of US$ 1.591 billion out of a total of US$ 2.537 billion, which amounts to 63 percent of total FDI. With the initiation of CPEC, there has been an upsurge in investment flowing into Pakistan, especially in the infrastructure and energy sectors.

China Pakistan Economic Corridor (CPEC):

Pakistan and China have established a Joint Cooperation Committee (JCC) to implement CPEC. The JCC is co-chaired by Pakistan’s Federal Minister for Planning, Development and Reform and Vice-Chairman of China’s National Development and Reform Commission. It is supported by eight Joint Working Groups covering the various areas of cooperation, including: (i) Energy, (ii) Transport Infrastructure, (iii) Gwadar port, (iv) Industrial Cooperation, (v) Planning & Finance, (vi) Security, (vii) Socio-Economic Development, and (viii) International Cooperation. Two new JWGs have also been added. The ninth and tenth JWGs on Science & Technology and Agriculture were established in March 2020 during the visit by the Pakistani President to China.

Nine JCC meetings have been held to date, with the last one taking place on 5 November, 2019 in Islamabad. The next meeting of the JCC is scheduled to be held in China in 2020.

Both sides will also enhance cooperation in agricultural areas including deep processing technology, fisheries, and disease-free zones.

The opinions expressed in this article belong solely to the author, and not necessarily to People's Daily Online.

Zamir Ahmed Awan is a senior fellow with the Center for China and Globalization (CCG) and a sinologist at the National University of Sciences and Technology in Pakistan. E-mail: [email protected]

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