Jan 17 - 23, 20

There is almost nothing common in the economic configuration of China and Pakistan. China, by GDP measure, happens to be the second largest world economy after the US. A giant economy of the size of US$5745 billion carries in its friendship baggage an economy with a minuscule size of $170 billion. An economy flush with forex reserves of $2850 billion extends its helping hand to a struggling economy that has somehow managed to accumulate reserves worth $17 billion to keep it afloat for a few months. A nation with a population of 1341 million people looks adorably at a nation one-eighth of its size. What are the common bonds of this unique and amazing relationship? Religion? Certainly not. Cultural affinity? Extremely doubtful. Co-operation? Only in diplomatic parlance. Fear of a common enemy [India]? May be, but to a certain extent only. It is really worth trying to figure out the nature and composition of fiber of which this intriguing yet fascinating construct of bilateral relationship is made.


INDICATORS 2006 2007 2008 2009 2010 2011 IMF
Population . . . . 1341 million .
Forex Reserves . . . . US$2.85 trillion .
Exchange rate . . . . US$=6.11Yuan .
GDP at current prices (US$ bn)) 2713 3494 4520 4985 5745 6422
GDP per capita (US$) 2064 2645 3404 3735 4283 4764
Real GDP growth (y-o-y % change) 12.7 14.2 9.6 9.1 10.5 9.6
Current account balance (US$ bn) 253 372 436 297 270 325
Current account balance (%GDP) 9.3 10.6 9.6 6.0 4.7 5.1
Exports (%GDP) 39.1 38.4 35.0 26.7 26.7 25.7
Inflation 1.5 4.8 5.9 (0.7) 3.5 2.7

Pakistan, due to the lack of political vision and economic planning, ever remains entangled in persistently emerging crises both on political and economic fronts. The reason is that we have failed to decide, even after the passage of 63 years, on a form of governance that suits our temperament on the one hand and promises to deliver on the other. We are still obsessed with the western form of democracy giving little weight to the reality that most of the Asian economies have bloomed under autocratic rules. China, bogged down by its centuries-old ideological systems, came out of economic deprivation by reaching a compromise between its ideologies and new economic realities. It did not give up its core values, rather it embarked on a course that allowed for a safe passage into the market-based economic management.

As a result, it outperformed all major economies that remained stuck to the Friedman-type market capitalism. The West and the US cannot boast that China has excelled by opting for western democracy and market capitalism. Rather, they feel unsecured by the mountains of dollars China is now sitting on. Do we really hold China as dear as we show to the world through our off and on rhetoric? Have we learned any lessons from China to justify our claims to its friendship?


INDICATORS 2006 2007 2008 2009 2010
Population . . . . 167 million
Forex Reserves . . . . US$ 17 billion
Exchange rate . . . . US$=Rs.85.7
GDP at current prices (US$ bn)) 127.489 143.203 164.551 166.515 173.340
GDP per capita (US$) 836 921 1038 1018 1095
Real GDP growth (y-o-y % change) 5.8 6.8 3.7 1.21 4.1
Current account balance (US$ bn) (5.649) (7.361) (14.302) (-9.395) (3.507)
Current account balance (%GDP) (4.4) (5.1) (8.5) (5.7) (2.0)
Exports (%GDP) 13.0 11.9 12.5 11.8 9.2
Inflation (CPI) 7.92 7.77 12.00 20.77 15.68

Pakistan's relationship with China dates back to 1951. Pakistan happened to be the first Islamic country to recognize China in 1950. The relationship has almost remained immune to the winds of changes that keep blowing across the planet, given the fickle and treacherous nature of global politics that recognizes no two nations as permanent friends or permanent foes. If US can be marked as the most unreliable player in the game of world politics, China can be trusted as an all-weather friend by those who have developed with it relationship based on principles and mutual respect. Zulfiqar Ali Bhutto added special significance to this relationship by introducing the elements of forthrightness and mutual trust.

The cooperation since then has known no bounds. We have been the recipient of Chinese support in every conceivable sphere of activities, economic, social, military etc. On economic side, transport, communication, energy, and infrastructure have been the major areas of cooperation. The development of Gwadar port - the sore point to a number of regional and global powers but the potent source of a huge economic turnaround for Pakistan - can be taken as an example of Chinese commitment to making Pakistan a strong and self-reliant nation. Now it is up to us, how we stand up to the highhandedness of our adversaries to benefit from this economic boon by making the port operational. On energy side, the invaluable assistance - both financial and technical - for developing Chashma power plants is yet another example of 'support with no strings attached'.

The recent visit of Chinese premier Wen Jiabao has been a big boost to Pakistanís ailing economy. The agreements and MoUs worth $38 billion signed by the two countries will give us another opportunity to break ourselves away from the economic inertia and usher in a new era of recovery and prosperity. How we draw a line between the Chinese friendship and the market-based US relationship remains to be seen.