fatman17
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Date Posted: 01-Oct-2010
Jane's Defence Weekly
China to relax financial terms on sales to flood-hit Pakistan
Farhan Bokhari JDW Correspondent - Islamabad
China has quietly assured Pakistan that it will relax the financial terms attached to its defence sales to the nuclear-armed South Asian country, which has suffered significant economic setbacks due to massive floods in the past month, two senior Pakistani government officials familiar with Sino-Pakistani relations have told Jane's .
Flood-related losses are estimated to run into several billion dollars, with Pakistan's prime minister, Yusuf Raza Gilani, claiming the figure to be as high as USD43 billion. Although Western economists disagree with Gilani's assessment, they warn that the losses may have put the economy back by several years.
At present, China has four major defence industry collaboration programmes with Pakistan. These include a plan for Pakistan's navy to purchase four F-22P type frigates; Islamabad's joint development with China of at least 250 JF-17 Thunder aircraft; the production and continuous development of the Al-Khalid main battle tank currently used by Pakistan's army; and the Pakistan Air Force's (PAF's) purchase of at least four Chinese airborne early warning and control aircraft. In recent years, PAF officials have disclosed their interest in purchasing up to 36 J-10 multi-role fighters from China.
Prior to the floods, Pakistani officials had also indicated their interest in a further purchase of frigates from China, while preliminary discussions were understood to have taken place between the two countries regarding joint submarine developments.
"The floods have indeed complicated our plans for future development of our armed forces. But our Chinese brothers have generously made an offer. They want Pakistan to set the financial terms," a senior government official told Jane's . "China is keen to see Pakistan sustain its strategic position," added the official.
In September Chinese officials disclosed their intention to go ahead with the sale of a 1,000 MW nuclear energy reactor to Islamabad, planned to be built at Chashma in Pakistan's central Punjab province. The reactor will be the third project of its kind: a Chinese-built 300 MW nuclear reactor has already been built at Chashma and a second 300 MW reactor is presently under construction there.
A Pakistani Foreign Ministry official told Jane's : "China's gesture [with the new nuclear energy reactor agreement] underlines its deep commitment to Pakistan's strategic importance. The Chinese are simply not willing to allow Pakistan's strategic standing to be compromised in any way."
He added that, in reaching the nuclear reactor agreement, "China left it pretty much to us [Pakistan] to decide the financial terms of this deal", further confirming earlier reports of Beijing's flexibility due to Pakistan's vulnerable economic position.
Retired Major General Mehmood Durrani, Pakistan's former national security adviser to the prime minister, told Jane's that China's gestures were in consideration of its appreciation of vital security interests, notably the need to counter the rise of India as a growing military power.
"Beijing sees the need to counterbalance India. The Chinese have a long history of co-operation with Pakistan which they want to build further," he said.
Date Posted: 01-Oct-2010
Jane's Defence Weekly
China to relax financial terms on sales to flood-hit Pakistan
Farhan Bokhari JDW Correspondent - Islamabad
China has quietly assured Pakistan that it will relax the financial terms attached to its defence sales to the nuclear-armed South Asian country, which has suffered significant economic setbacks due to massive floods in the past month, two senior Pakistani government officials familiar with Sino-Pakistani relations have told Jane's .
Flood-related losses are estimated to run into several billion dollars, with Pakistan's prime minister, Yusuf Raza Gilani, claiming the figure to be as high as USD43 billion. Although Western economists disagree with Gilani's assessment, they warn that the losses may have put the economy back by several years.
At present, China has four major defence industry collaboration programmes with Pakistan. These include a plan for Pakistan's navy to purchase four F-22P type frigates; Islamabad's joint development with China of at least 250 JF-17 Thunder aircraft; the production and continuous development of the Al-Khalid main battle tank currently used by Pakistan's army; and the Pakistan Air Force's (PAF's) purchase of at least four Chinese airborne early warning and control aircraft. In recent years, PAF officials have disclosed their interest in purchasing up to 36 J-10 multi-role fighters from China.
Prior to the floods, Pakistani officials had also indicated their interest in a further purchase of frigates from China, while preliminary discussions were understood to have taken place between the two countries regarding joint submarine developments.
"The floods have indeed complicated our plans for future development of our armed forces. But our Chinese brothers have generously made an offer. They want Pakistan to set the financial terms," a senior government official told Jane's . "China is keen to see Pakistan sustain its strategic position," added the official.
In September Chinese officials disclosed their intention to go ahead with the sale of a 1,000 MW nuclear energy reactor to Islamabad, planned to be built at Chashma in Pakistan's central Punjab province. The reactor will be the third project of its kind: a Chinese-built 300 MW nuclear reactor has already been built at Chashma and a second 300 MW reactor is presently under construction there.
A Pakistani Foreign Ministry official told Jane's : "China's gesture [with the new nuclear energy reactor agreement] underlines its deep commitment to Pakistan's strategic importance. The Chinese are simply not willing to allow Pakistan's strategic standing to be compromised in any way."
He added that, in reaching the nuclear reactor agreement, "China left it pretty much to us [Pakistan] to decide the financial terms of this deal", further confirming earlier reports of Beijing's flexibility due to Pakistan's vulnerable economic position.
Retired Major General Mehmood Durrani, Pakistan's former national security adviser to the prime minister, told Jane's that China's gestures were in consideration of its appreciation of vital security interests, notably the need to counter the rise of India as a growing military power.
"Beijing sees the need to counterbalance India. The Chinese have a long history of co-operation with Pakistan which they want to build further," he said.
