Nov 24 - 30, 2008

Pakistan China relations have evolved stronger. Bilateral trade is surging, investment is increasing, and the number of development projects and joint ventures is also increasing. Over the years China has made valuable contribution to Pakistan's economic development, particularly, in the development of infrastructure and setting up of basic industries.

Presently, Pakistan and China are cooperating closely in the development of Gwadar Port, which would help economic activity in Pakistan and provide important access route to the sea for China's Western regions, Afghanistan and Central Asian states. A large number of important projects such as the up gradation of Karakoram Highway, Thar Coal Mining, up-gradation of Pakistan Railways and Power Generation Projects - both nuclear and non-nuclear - are some of the examples of this expanding economic cooperation.

During the recent visit of President Asif Ali Zardari to China the two countries signed eleven agreements, MOUs and protocols to enhance bilateral cooperation on sound footing in diverse sectors including infrastructure, energy, telecommunication, agriculture, industry, minerals, trade, disaster relief and space technology.

Earlier both sides agreed to strengthen strategic partnership in all dimensions, reinvigorate the multi-faceted bilateral relations, intensify economic cooperation and foster people to people contacts in the coming years. The talks emphasized upon retrieving the economic cooperation on strong footing in multi dimensions in line with the mutuality of interests and convergence of views in this regard.

The importance of President's engagements in China also marked by his close interactions with the heads and chief executives of major Chinese companies operating in different sectors including banking, steel, mineral, cement, trade and other important segments of the economy.

The President' visit to China has a special significance as the first interaction between Pakistan's newly elected government and China's fourth Generation leadership that has overseen China's dramatic economic development and progress.

During the talks, Chinese President Hu Jintao expressed confidence that the traditional relations between the two countries would be further strengthened. The two leaders expressed satisfaction over the growth of Pakistan-China relations, since the diplomatic ties were first established between the two countries. They agreed that Pakistan China friendship has truly stood the test of time and history and has emerged stronger with every important change in the international, regional and domestic environment.

President Zardari and President Hu appreciated the need for strengthening relations and expanding mutually beneficial cooperation. It was agreed that increased trade and economic cooperation should be centerpiece of the bilateral relationship. It was accordingly decided to accelerate the implementation of the Five Year Development Programme on Economic Cooperation.

However, to strengthen the relationship between China and Pakistan it is necessary to examine Chinese relationship with Pakistan as well other countries in the region. The two countries have maintained friendly cooperation since establishing diplomatic relationship. Pakistan has provided China with precious help and support in times of difficulty. Chinese people have the tradition of remembering old friends. China-Pakistan cooperation contributes to development of the two countries as well as regional peace and stability. This cooperation is not directed against any third party.

Over the years China-US relationships have improved from traditional opponents to strategic partners in business. High level bilateral exchanges are frequent, strategic dialogue is progressing steadily, bilateral trade is growing rapidly, and personnel exchanges become increasingly closer. The two sides conducted effective consultation and coordination on counter-terrorism, the nuclear issue on Korean Peninsula, Iraqi reconstruction, UN reform and other important issues.

Being two super powers, China and the US also have some differences, but also share more broad and important interests. China believes that a normal development of China-US relationship serves the interests of the two countries and contributes as well to peace, stability and development of the Asian-Pacific region and the world at large. China believes that both sides should make efforts to address each other's concern, properly settle disputes, develop a constructive cooperative partnership and ensure a sound and steady development of China-US relationship.

China attaches great importance to the bilateral relationship with Japan. In the spirit of "taking history as a mirror and looking into the future" and in accordance with the three political documents between the two countries, China and Japan are following rule of peaceful co-existence for maintaining friendly relationship and following mutually beneficial cooperation for achieving common development goals. Despite some differences and difficulties, China has remained committed to developing China-Japan friendly cooperative relations.

ASEAN countries are friendly neighbors of China and over years, following the foreign policy of "developing good-neighborly relationships and partnerships in the surrounding areas in the efforts to build an amicable, tranquil and prosperous neighborhood" have forged a stronger China-ASEAN friendly cooperation and have made steady progress. The two sides have established a strategic partnership for peace and prosperity and are solidifying and deepening the relationship by formulating and implementing relevant action plans. Bilateral trade and economic cooperation has grown increasingly close. Solid progress has been made in the building of China-ASEAN Free Trade Area. China-ASEAN relationship is not exclusive but progressing well in the light of seeking mutual benefits and common development with the world at large.

The 13th summit of SAARC in principle admitted China as observer and since then China has made significant contribution. China and SAARC face similar problems, shoulder common development task and are rather complementary to each other. China has expressed its willingness to cooperate with SAARC, learn from each other and make up for each other's own deficiencies in various fields.

The G-8 has emerged as a strong forum for coordination among major developed countries and played an important role in international affairs, particularly in international political and economic affairs. Believing that G-8 can keep pace with the time, strengthen cooperation with all parties, and take more concrete measures to help developing countries overcome real difficulties on the basis of equality and mutual benefit, China is actively taking part in endeavors which are in the interests of both sides and conducive to world stability and common development.

China, Russia and India are influencing geopolitical scenario of the region in particular and the world at large. The dialogue and cooperation among the three countries catch world-wide attention. The tripartite cooperation of China, India and Russia is not directed against any third party. It is mutually beneficial and win-win cooperation. It is believed that further strengthening of the tripartite mutual understanding and communication and promoting trilateral as well as international cooperation conform to the common aspirations of the three countries, serve the interests of the three countries in politics, economy, security and other fields and contribute to safeguarding peace and stability in the region and the world.

The Sino-Pakistan relationship presents a model for friendly relations between two opposing ideological settings and markedly different economic systems during and after the Cold War at bipolar, multipolar, and unipolar world. It was because of the close understanding that bilateral relations have strengthened between the two countries irrespective of domestic political regime changes and issues even since Pakistan recognized the Peoples Republic of China on January 4, 1950.

Pakistan was the first country to recognize the PRC as the sole legitimate 'government' of the people of China. As diplomatic relations were established between the two countries on May 12, 1951, high level lateral exchanges became a regular feature of mutual contact between the two countries. In recent times, especially by the 1990s, there has occurred a much stronger momentum for high level exchanges.

Besides bilateral level, both countries have been enhancing cooperation through multilateral forms; namely the Shanghai Cooperation Organization (SCO) and the ASEAN-Regional Forum (ARF) from East Asia to Eurasia. The two rounds of talks that were held at southernmost city of Sanya, in the Hainan province, covered a wide range of issues including cooperation against extremism and terrorism which is also a matter of concern between the two countries at the SCO and ARF level. The Boao Forum for Asia has also emerged as another vital platform to discuss economic issues facing Asia from a wider perspective.

The Sino-Pakistan bilateral economic relationship has got an immense strategic importance in the region. Trade between the two countries has been going on under the Free Trade Agreement (FTA), commenced in 2006. To attract investment from the private sector, the Pakistan-China Joint Investment Company has been set-up in 2007, understanding that the Chinese private investment does not commensurate with the close status of bilateral ties between the two countries. Chinese government continues to encourage Chinese companies to enhance cooperation with Pakistani companies in areas including finance, telecom, energy and transportation.

Moreover, both countries are planning to enhance mutual economic ties under the Joint Five Year Economic Plan. Realising the vitality of the emerging Sino-Pakistan economic ties, President Hu Jintao descried ties with Pakistan as 'high priority relationship' and noted that over the years substantial improvement has been made in Sino-Pak ties. Bilateral trade figure has been improving and it is expected that it would touch upon the target of US$15 billion in the foreseeable future.

Under the Joint Five Year Economic Plan, it is expected that exports from Pakistan into China would also increase at a big level. Trade would further flourish and would be in Pakistan's favour, when transit trade and route facilities through the Gwadar Deep Sea Port would be built. Both sides have been negotiating and making progress on the transit trade agreement that loomed large during the present visit. The transit trade agreement would broaden the scope of the PTA.

The Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project that may include China, improved connectivity through the realignment of Karakoram Highway by including Tajikistan, adding a fibre-optic line, oil and pipeline projects, and a rail track linking China with the Gwadar Port would boost trade between the two countries.

The China Development Banks considering providing support for the Bhasha-Diamer Dam. The development of the Thar coal reserves to generate electricity is another vital sector of mutual cooperation and there is an urgent need to kick-start this project to meet the energy crisis. This project has a great potential to export electricity to neighbouring countries. Therefore tremendous boost in economic relationship is in the offing to inject a radical shift in the existing economic relations between the two countries.

The Pak-China joint infrastructure development ventures would not only strengthen ties between the two countries, but also help bring stability and prosperity in the region by enhancing transit trade and greater interaction among the regional countries.

China is also playing a key role in overcoming electricity shortage in Pakistan, touching a shortfall fall of 5000MW. China has assured Pakistan of setting up four new nuclear power plants each worth 1,300 MW. Two plants would be set up at Chashma and two at Karachi. Pakistan already has a 300 MW Chashma Power Plant, built with Chinese assistance, while work is underway on Chashma-II. Chinese Dong Fong Corp has signed a contract to build a 525 megawatt power plant at Chicho-ki-malian.

The overall geo-strategic environment for regional cooperation is gradually becoming more favourable. Pakistan's entry into Shanghai Cooperation Organisation as an Observer and China's entry into SAARC as an Observer would allow Pakistan-China bilateral economic relations to grow with a regional perspective. Also, there is a convergence of economic interests at the strategic level, especially in area of energy security and communication networks.

China has opened up its Western region adjacent to Pakistan for trade and investment in order to reduce the economic disparity between its developed coastal regions and other underdeveloped areas. Once developed, this region would be a hub for economic activity between China, Central Asia and South Asia. Pakistan's desire to become a "corridor of trade and energy" for China and Central Asia by linking Gwadar through upgraded-KKH entails promising prospects.