Daily Times

Pakistan’s relationship with China has been heralded as a pillar of its foreign policy for decades. Referred to as an “all-weather friendship,” the two countries share a deep and strategic partnership that dates back to the 1950s.

Over time, these ties have been strengthened through diplomatic support, military cooperation, and most significantly, economic collaboration. The recent manifestation of this relationship is the China-Pakistan Economic Corridor (CPEC), an ambitious multi-billion-dollar infrastructure project that aims to connect China’s Xinjiang region to Pakistan’s Gwadar Port on the Arabian Sea. While this alliance has brought many tangible benefits to Pakistan, it also poses several challenges that raise concerns about Pakistan’s economic autonomy, global standing, and regional stability.

China’s commitment to Pakistan, particularly under CPEC, is vast. The project, valued at around $62 billion, is part of China’s Belt and Road Initiative (BRI) and is viewed as a game changer for Pakistan’s economy. CPEC has spurred infrastructure development, including roads, railways, and energy projects, alleviating the energy shortages that plagued Pakistan for years. The construction of Gwadar Port has also put Pakistan on the global map as a strategic transit hub, potentially connecting China to the Middle East, Africa, and Europe.

Pakistan must ensure that the benefits of CPEC and other Chinese investments are equitably distributed.

Economically, CPEC has provided Pakistan with much-needed investments in its infrastructure. Pakistan, long struggling with chronic power shortages, has seen new coal, hydropower, and solar power plants spring up across the country. These projects have helped boost Pakistan’s power generation capacity, which in turn has driven industrial growth and created jobs. The influx of Chinese capital into sectors like energy, transportation, and technology has provided a much-needed stimulus to the economy, particularly during times of economic distress when Pakistan was grappling with balance of payments issues.

Furthermore, China has been a key financial lifeline for Pakistan. During periods of economic turmoil, Beijing has provided Pakistan with loans, investments, and bailout packages. This financial support has enabled Pakistan to shore up its foreign reserves, reduce fiscal deficits, and avoid economic collapse. In a region marked by geopolitical instability, China has also served as a reliable military partner for Pakistan, providing military equipment and technology that strengthens Pakistan’s defense capabilities.

However, Pakistan’s growing economic dependence on China has raised significant concerns, both domestically and internationally. By 2024, Pakistan’s debt to China exceeded $30 billion, a figure that has raised alarms about the country’s economic autonomy. Pakistan’s debt levels, coupled with the long-term repayment obligations of these Chinese loans, have led to fears of a “debt trap” where Pakistan is unable to service its debt, giving China leverage over key national assets and decisions. This concern is not without precedent. Countries like Sri Lanka and Djibouti have faced similar challenges with Chinese loans, with Sri Lanka ultimately leasing its Hambantota Port to China for 99 years after defaulting on its debt.

While CPEC is intended to promote economic growth and job creation, many of the jobs generated by Chinese investments have been filled by Chinese nationals rather than Pakistanis. Local businesses and labor markets have also voiced concerns about unfair competition from Chinese companies, which often have the advantage of superior resources and technology. As a result, the anticipated widespread economic benefits of CPEC have been unevenly distributed, with significant portions of the population, particularly in underdeveloped regions like Balochistan, feeling left out of the progress.

In addition to economic concerns, CPEC has become a focal point of regional tensions, particularly with India. The corridor passes through the disputed region of Gilgit-Baltistan, which is part of the larger Kashmir conflict between India and Pakistan. India views the development of infrastructure in this contested area as a violation of its territorial claims, exacerbating tensions between the two nuclear-armed neighbors. Furthermore, CPEC’s heavy involvement in Balochistan has fueled insurgencies in the region, where local populations feel disenfranchised and fear that they will not benefit from the economic development happening on their land. These tensions have occasionally resulted in attacks on Chinese workers and infrastructure, further destabilizing the region.

Internationally, Pakistan’s close alignment with China has strained its relationships with other global powers, particularly the United States. As US-China tensions have risen in recent years, Pakistan’s heavy reliance on China has complicated its foreign policy and limited its ability to maintain balanced relationships with competing global powers. The US, once a significant economic and military partner of Pakistan, has scaled back its aid and support in recent years, a shift that is partially attributed to Pakistan’s growing proximity to China.

The US-China rivalry is becoming more pronounced as global trade and security issues evolve, placing Pakistan in an increasingly precarious position. While Pakistan has traditionally maintained a delicate balancing act between competing global powers, it faces the risk of becoming overly reliant on China at the expense of its relationships with the West. The potential economic and geopolitical costs of this alignment with China are significant and may leave Pakistan isolated in an increasingly polarized world.

Despite these concerns, it is important to recognize the benefits that the Pakistan-China relationship has brought. CPEC has undoubtedly played a role in modernizing Pakistan’s infrastructure, addressing chronic energy shortages, and boosting industrial productivity. The economic benefits of this relationship are not to be dismissed. However, it is equally crucial for Pakistan to recognize the challenges posed by this partnership and to pursue a strategy that ensures the country’s economic sovereignty, political stability, and long-term sustainability. Moving forward, Pakistan must find ways to diversify its economic partnerships. While China will remain an essential partner, it is crucial for Pakistan to strengthen its relationships with other regional and global powers, such as the United States, the European Union, and the Gulf States. Building stronger ties with these nations can provide Pakistan with a broader array of economic opportunities and reduce its dependence on any single country. For instance, increased trade and investment with the European Union could help Pakistan develop new markets for its goods and services, while closer ties with Gulf States could bring in new investments in energy and infrastructure.

Furthermore, Pakistan must ensure that the benefits of CPEC and other Chinese investments are equitably distributed across the country. This requires greater attention to regional disparities, particularly in Balochistan, where resentment towards Chinese projects is growing. Ensuring that local populations benefit from infrastructure development, job creation, and economic growth is essential to maintaining social cohesion and preventing unrest. Equally important is the need to promote transparency and accountability in Chinese investment projects. Ensuring that these investments adhere to international standards of labor rights, environmental sustainability, and governance will help to safeguard Pakistan’s long-term interests.

On the global stage, Pakistan must carefully manage its relationships with competing powers, maintaining its sovereignty while leveraging its strategic position to its advantage. Navigating the US-China rivalry will require diplomatic agility and foresight, but it is a challenge that Pakistan must embrace if it hopes to remain relevant in an increasingly multipolar world. By pursuing a balanced foreign policy and adopting a more diversified economic strategy, Pakistan can position itself as a key player in regional diplomacy and global trade, while mitigating the risks associated with its deepening ties with China.

The writer is a journalist, TV presenter & column writer. She can be reached via her insta account @farihaspeaks