vk17
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China is often called an "all-weather friend" to Pakistan -- a strategic partner, a reliable source of trade and aid, and Islamabad's closest military ally. Pakistani Prime Minister Yousef Raza Gilani has described the friendship between the two countries as "higher than mountains, deeper than oceans, stronger than steel, and sweeter than honey." In September, he told the visiting Chinese Public Security Minister Meng Jianzhu, "Your friends are our friends," continuing, "your enemies are our enemies, and your security is our security."
But do things look so straightforward when viewed from Beijing? To be sure, Chinese money pours into places Western cash fears to tread. But Beijing is not oblivious to risk. In fact, Chinese money flows to investments that carry little to no risk and deliver returns that, however modest, are predictable. Moreover, at least some Chinese companies have proved willing to abandon investments as their perception of risk has risen. In September, for example, Kingho, a large private Chinese miner, is reported to have abandoned a proposed $19 billion investment to build a coal mine and power and chemical plants in Pakistan's Sindh province after reassessing investment and security risks.
Geopolitical risk (not least China's rivalry with India) has long led Beijing to support Islamabad. Friendly ties between the two help satisfy four Chinese strategic objectives: They ensure security and stability in China's western provinces and along its continental Asian border; anchor China's poorer western provinces in a web of cross-border economic activity; bottle up India in the subcontinent, forestalling the emergence of a continental-sized rival and precluding more extensive Indian security activities in East Asia; and assure that no other major power, particularly the United States, advances its interests in continental Asia, for instance, military deployments or permanent access arrangements.
In recent years, these four objectives have become ever more pressing, reinforcing Beijing's inclination to support Pakistan.
Beijing also aims to use Islamabad to box out New Delhi in Afghanistan and the broader region. Thus, India's expanding reach into East Asia is no doubt reinforcing China's tilt toward Pakistan. India's rapid economic growth has given it a growing strategic profile beyond South Asia. India is becoming an Asian power and a global player. It is deepening defense ties with Australia, Japan, Singapore, and Vietnam, four countries that are wary of China's rise and also are increasingly close to the United States.
Chinese nationals in Pakistan have come under unprecedented attack in recent years. And Beijing is ever more sensitive to protecting those citizens -- mostly engineers and other skilled workers -- abroad.
This means that Islamabad cannot forever presume that Chinese workers and money will stay in Pakistan if those assets come under attack on a larger scale. Beijing has shown little stomach for telling Islamabad to rein in anti-India insurgent groups that operate from Pakistan, such as Lashkar-e-Taiba. But those groups that have killed or kidnapped Chinese nationals are another matter. And China appears to have begun sorting and distinguishing these anti-India proxies from domestically focused groups, such as the Baloch separatists or pro-Taliban elements that could pose a more existential threat to Chinese interests. Balochistan has seen repeated attacks on Chinese nationals, including a 2004 bombing that killed three engineers working at the Gwadar port and a 2006 attack on a bus near Hub.
But it is investment risks, not geopolitical or political ones, that are more likely to alter China's long-standing calculus in Pakistan. There are, for example, intriguing parallels between China's conundrum in Pakistan and the problem it faces in Europe. In both cases, debt-laden economies have aggressively sought to attract a portion of Beijing's considerable stock of investment capital -- its $3 trillion pool of foreign exchange reserves. And when China does invest abroad, it is under enormous pressure to ensure a positive return.
So it matters more than ever that Pakistan faces an array of economic constraints, including a debt-to-GDP ratio that crossed 60 percent in 2010; painful debt service obligations to its creditors; a large fiscal deficit; double-digit inflation; a depreciating rupee; a trade deficit worsened by high global commodity prices; and above all, the lack of a credible growth strategy. Chinese financiers will be increasingly skeptical of the returns on investment into such an economy.
Road and infrastructure construction in Pakistan, as well as a bilateral free trade agreement, are tied to Beijing's effort to develop these regions. But these projects will increasingly need to meet higher expectations for returns than did China's traditional low-strings approach to aid.
Chinese economic activity will not, in itself, produce rapid, sustained, and balanced Pakistani growth. In the long term, economic interaction with India -- the restoration of traditional regional ties and natural economic affinities in the subcontinent -- will almost certainly be more decisive.
The bottom line is that China will not simply "bail out" Pakistan with loans, investment, and new untied aid. Rather, China's involvement in the country will closely reflect Beijing's own priorities and evolving risk assessments.
Link: China's Pakistan Conundrum | Foreign Affairs
Now its on Pakistan's authorities and people to decide whether they want regional peace and bail out Pakistan out of difficult times, or bank on neighbors who have little willingness to help them in time of real adversaries, recent wars with India have been example.
"Its always wise to make yourself capable than to bank on a strong friend"
World knows Chinese are smart and totally business minded, their successful business ventures in almost all parts of world tells the story, had they been so short sighted about relations being put first before investments, difference between Chinese investment in India and Pakistan would not have been that big.
Also they would never risk their big investment hub, India for sake of having some territorial disturbance issues with its old ally, Pakistan, Just think What would China gain if Pakistan wins on Kashmir issue, whereas they had much to loose if Pakistan wins, especially those four strategic reasons quoted in third para of the post!!!
But do things look so straightforward when viewed from Beijing? To be sure, Chinese money pours into places Western cash fears to tread. But Beijing is not oblivious to risk. In fact, Chinese money flows to investments that carry little to no risk and deliver returns that, however modest, are predictable. Moreover, at least some Chinese companies have proved willing to abandon investments as their perception of risk has risen. In September, for example, Kingho, a large private Chinese miner, is reported to have abandoned a proposed $19 billion investment to build a coal mine and power and chemical plants in Pakistan's Sindh province after reassessing investment and security risks.
Geopolitical risk (not least China's rivalry with India) has long led Beijing to support Islamabad. Friendly ties between the two help satisfy four Chinese strategic objectives: They ensure security and stability in China's western provinces and along its continental Asian border; anchor China's poorer western provinces in a web of cross-border economic activity; bottle up India in the subcontinent, forestalling the emergence of a continental-sized rival and precluding more extensive Indian security activities in East Asia; and assure that no other major power, particularly the United States, advances its interests in continental Asia, for instance, military deployments or permanent access arrangements.
In recent years, these four objectives have become ever more pressing, reinforcing Beijing's inclination to support Pakistan.
Beijing also aims to use Islamabad to box out New Delhi in Afghanistan and the broader region. Thus, India's expanding reach into East Asia is no doubt reinforcing China's tilt toward Pakistan. India's rapid economic growth has given it a growing strategic profile beyond South Asia. India is becoming an Asian power and a global player. It is deepening defense ties with Australia, Japan, Singapore, and Vietnam, four countries that are wary of China's rise and also are increasingly close to the United States.
Chinese nationals in Pakistan have come under unprecedented attack in recent years. And Beijing is ever more sensitive to protecting those citizens -- mostly engineers and other skilled workers -- abroad.
This means that Islamabad cannot forever presume that Chinese workers and money will stay in Pakistan if those assets come under attack on a larger scale. Beijing has shown little stomach for telling Islamabad to rein in anti-India insurgent groups that operate from Pakistan, such as Lashkar-e-Taiba. But those groups that have killed or kidnapped Chinese nationals are another matter. And China appears to have begun sorting and distinguishing these anti-India proxies from domestically focused groups, such as the Baloch separatists or pro-Taliban elements that could pose a more existential threat to Chinese interests. Balochistan has seen repeated attacks on Chinese nationals, including a 2004 bombing that killed three engineers working at the Gwadar port and a 2006 attack on a bus near Hub.
But it is investment risks, not geopolitical or political ones, that are more likely to alter China's long-standing calculus in Pakistan. There are, for example, intriguing parallels between China's conundrum in Pakistan and the problem it faces in Europe. In both cases, debt-laden economies have aggressively sought to attract a portion of Beijing's considerable stock of investment capital -- its $3 trillion pool of foreign exchange reserves. And when China does invest abroad, it is under enormous pressure to ensure a positive return.
So it matters more than ever that Pakistan faces an array of economic constraints, including a debt-to-GDP ratio that crossed 60 percent in 2010; painful debt service obligations to its creditors; a large fiscal deficit; double-digit inflation; a depreciating rupee; a trade deficit worsened by high global commodity prices; and above all, the lack of a credible growth strategy. Chinese financiers will be increasingly skeptical of the returns on investment into such an economy.
Road and infrastructure construction in Pakistan, as well as a bilateral free trade agreement, are tied to Beijing's effort to develop these regions. But these projects will increasingly need to meet higher expectations for returns than did China's traditional low-strings approach to aid.
Chinese economic activity will not, in itself, produce rapid, sustained, and balanced Pakistani growth. In the long term, economic interaction with India -- the restoration of traditional regional ties and natural economic affinities in the subcontinent -- will almost certainly be more decisive.
The bottom line is that China will not simply "bail out" Pakistan with loans, investment, and new untied aid. Rather, China's involvement in the country will closely reflect Beijing's own priorities and evolving risk assessments.
Link: China's Pakistan Conundrum | Foreign Affairs
Now its on Pakistan's authorities and people to decide whether they want regional peace and bail out Pakistan out of difficult times, or bank on neighbors who have little willingness to help them in time of real adversaries, recent wars with India have been example.
"Its always wise to make yourself capable than to bank on a strong friend"
World knows Chinese are smart and totally business minded, their successful business ventures in almost all parts of world tells the story, had they been so short sighted about relations being put first before investments, difference between Chinese investment in India and Pakistan would not have been that big.
Also they would never risk their big investment hub, India for sake of having some territorial disturbance issues with its old ally, Pakistan, Just think What would China gain if Pakistan wins on Kashmir issue, whereas they had much to loose if Pakistan wins, especially those four strategic reasons quoted in third para of the post!!!
