Pak & China Agreements 2014

(Umar Ajmal & Zaman Ashraf, Gujranwala)

China–Pakistan relations began in 1950 when Pakistan was the first country to made official diplomatic relations with the Republic of China . China and Pakistan have developed an all-season friendship that is based on equality, brotherhood and overall cooperation.

Diplomatic relations were established in 1950, military assistance began in 1966, a strategic alliance was formed in 1972 and economic co-operation began in 1979. China has become Pakistan’s largest supplier of arms and its third-largest trading partner. Recently, both nations have specially decided to cooperate in improving Pakistan's civil nuclear power sectors and energy and infrastructure sectors.

The recent visit of Prime Minister (PM) Nawaz Sharif to China was successful as both countries signed almost 19 agreements on mega projects relating to electricity generation and infrastructures. Pakistan and China inked 19 agreements and memorandums of understanding (MoUs) mainly on projects relating to China-Pakistan Economic Corridor and electricity generation to further boost bilateral ties.

The signing ceremony was witnessed by Prime Minister Nawaz Sharif and his Chinese counterpart Li Keqiang. On November 2014, Chinese government announced that it will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan as part of CPEC. Documents quoted by Reuters show that China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects which will be completed by 2017 at most. The deal includes $622 million for Gwadar port, According to Reuters, under the CPEC agreement; $15.5 billion worth of coal, wind, solar and hydro energy projects will add 10,400 megawatts of energy to the national grid of Pakistan.

The whole investment is being made by China,” said Amir Zamir, the spokesman for Pakistan’s ministry of planning and development. “There is no loan or aid for the energy projects, but pure investment by the Chinese,” he told AFP. The two sides also signed a MoU on the outline of the Long-Term Plan of CPEC, Capacity Building for Development of CPEC between NDRC of China and Ministry of Planning, Development and Reform of Pakistan.

The decision by Prime Minister Nawaz Sharif to choose China as the destination for his first foreign visit after coming to power was indeed a prudent step that has successfully expanded the scope of Pakistan’s strategic partnership with one of its most trusted allies. It is often said that Pakistan’s relationship with China is “higher than the Himalayas” and this visit has in many ways manifested these words into a tangible form in the shape of several bilateral agreements that both countries have signed. It is though such agreements and MOUs that we can clearly lay down a comprehensive framework that outlines a roadmap to upgrade and expand the economic, trade, cultural and strategic ties between Pakistan and China and quite literally take it even “higher than the Himalayas”. Some of the projects that would start as a result of these agreements most certainly have the potential to positively revolutionize the bilateral trade activity and also transform the entire economic landscape of this region. Or as the prime minister put it quite aptly, be a “game-changer.”

Geo-strategic experts will tell you that Pakistan’s strategic location is one of its many strength. A Glance at the world map is enough to give you an indication of the Pakistan’s crucial geographic proximity. South and Central South Asian States, the Oil rich Gulf Economies and an Economic giant like China are all in its immediate vicinity making Pakistan the gateway that connects this emerging region. While Karachi already provides access to Arabian Sea, but all eyes are fixed on the port of Gwadar.

The state of art Port of Gwadar, being developed by the Chinese experts, has the potential to emerge as the major trade gateway that connects this region to the world. This will make Pakistan a hub of trade, commerce and economic activity. It is therefore important that a road link be established linking China to Gwadar and both premiers have agreed to start work on this project. This project is indeed long term, but in the interim a further motorway project has been agreed to link Pakistan’s federal capital Islamabad to its trade capital Karachi through a new motorway that connects Lahore to Karachi. Motorways that link Lahore to Islamabad and Peshawar are already in place, and were built during PM Nawaz Sharif’s previous tenures. Similarly bullet trains connecting various cities in Pakistan are also being started which would not only provide quality transport links but also strengthen Pakistan’s economy.

The outcomes of these agreements bring prosperity, remove the factor of unemployment, remove poverty, per unit electricity cost reduce and proper use of natural resources.

Suggestion: Pakistan should make the friendly relationship with china. The big beneficiary is Pakistan because “These projects will be a source of employment for over a million youth of Pakistan. Pak-China cooperation will also create business opportunities for local and international investors,” The China-Pakistan Economic Corridor will be of important economic, diplomatic, security and strategic significance. It will open new areas for mutually beneficial cooperation between the two countries and offer a new force for their economic integration. It will also further expand the depth and breadth of bilateral strategic cooperation and push their strategic cooperative partnership to a new level.

Umar Ajmal & Zaman Ashraf
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