Pakistan:China’s $46 billion gamble

Published: May 8, 2015 - 13:42 Updated: June 16, 2015 - 14:11

How will India react? If it’s not part of this project, that could hurt its ambition to build trade links with Central Asia through Afghanistan 

Sanjay Kapoor Delhi 

Chinese President Xi Jinping's announcement of a massive $46 billion investment in Pakistan during his recent visit to Islamabad left observers in Washington, Riyadh and New Delhi in serious shell shock. 

In these days of austerity and economic slowdown, nobody goes around buying up countries. But, by all appearances, that’s exactly what China has done. 

The mammoth scheme to develop a 3,200-km industrial corridor linking the Pakistani port of Gwadar and the western Chinese city of Kashgar, in Xinjiang province, dwarfs the handouts Pakistan has received from the US or from benevolent Saudi Arabia. 

From those allies, Islamabad has got driblets – always in the form of some kind of performance-linked funds. For the Saudis, that meant: Open so many madrassas and make people wear short pyjamas and long beards. I am not sure whether chasing out the Shia Muslims, too, figured on the Saudi wish list. The US demands were a bit more complicated, ranging from pampering the Mujahideen when the Soviets were occupying Afghanistan to smoking the same militants out when they were declared the enemy after 9/11. The US government also expects no more than a token protest when it violates Pakistan’s sovereignty when sending out its murderous drones to kill Taliban militants. And it expects Islamabad to turn a blind eye to the killing of innocents – called “collateral damage” – in these same attacks. As of November 2014, supposedly “clinical and precise” attacks by US drones had killed 1,147 people, though they were targetting only 41, according to human rights group Reprieve. One can only wonder what the total might have been if they hadn't been so careful.  

Along with a lot more money on the table, Beijing promises to make no such confusing and unreasonable demands – which could well spell trouble for Washington. 

Until now, the Pakistani military, which is plugged in with the US defence forces, has ignored the harm this collaboration has caused the country. The primacy that the army has occupied in Pakistan’s scheme of things has constrained media freedom and liberal spaces. Democratically-elected governments have been few, but they are largely controlled by the army and its powerful Inter-Services Intelligence (ISI). 

But if Beijing emerges as Islamabad’s biggest backer, as well as its most constant and least demanding, that could change. 

For many years, China has professed a friendship with Pakistan “that is higher than the mountains and deeper than the sea”. This bond has grown since Pakistani Prime Minister Muhammad Ali Bogra actively wooed Chinese Prime Minister Zhou-en-Lai during the Bandung Conference in 1955 – much to the chagrin of Indian Prime Minister Jawaharlal Nehru. 

Thus, when President Xi landed in Islamabad recently, he said that it seemed like he “had come to his brother’s home”. Confirming newspaper reports before his arrival about the massive Chinese investments in Pakistan, he presented details of the project. 

Coming just a fortnight before Xi would welcome Indian Prime Minister Narendra Modi in Beijing, the announcement must have been intended to serve notice to New Delhi as much as Washington. Xi could not help but know how Modi would view a Chinese-funded project winding its way through the disputed territory of Pakistan-occupied Kashmir. So announcing it when he did was likely intended to communicate to the Indian PM that any discussions to take place in Beijing would be on China’s terms, and nothing would come in the way of maritime silk route that he had unveiled in 2013. 

Until now, China had been dilly-dallying on developing Gwadar port. Why did it suddenly rush to invest? The answer lies in the manner in which it lost control of the Colombo Port Trust after Sri Lankan President Mahinda Rajapakse lost the elections. Rajapakse blamed India and its Research & Analysis Wing intelligence agency for his defeat. But it was a serious setback for the Chinese and their maritime silk route. Did they also believe that India was behind their discomfiture? It seems like it! That’s why they decided to invest in a country that could be trusted – even if it meant changing its economic geography and fighting its many wars. 

How will India react? If it’s not part of this project, that could hurt its ambition to build trade links with Central Asia through Afghanistan. But if Pakistan leverages the Chinese investment and manages a spike in its economic growth rate, it might suddenly look less like a failed State and more like a rising power. 

India must either get on board or threaten the project, and either decision could have serious repercussions. This will be Modi’s big test when he goes to Beijing.