Daily Times

Pakistan’s inability to maintain a sound relationship with its neighbours is a real cause for concern. Our leadership has always prided themselves in being one of the closest allies of China. However, amidst the current wave of terror attacks and continuous IMF interference, Pakistan is falling from China’s grace. One major indication of it was when the Chinese Ambassador, Jiang Zaidong, showed his displeasure with Ishaq Dar’s statement snubbing him rightly for his senseless remarks. This must be taken as a turning point in Pak-China relations.

The recent deteriorating relationship between the two countries has led to a situation where India is inching closer to China. Prime Minister Modi confirmed that “stable” bilateral relations “contribute” to a multi-polar world and will have a “positive impact on regional and global peace and prosperity.”

Amidst its many problems is Pakistan’s failure to meet its debt obligations to China. The total debt to China is estimated to be around $ 26.6 billion, making China the largest bilateral creditor to Pakistan. The cherry on top of these failed payments is a move that stemmed from desperation to mend broken Pak-China relations.

According to the officials, Pakistan will clear 100 percent of the invoices generated by the seventeen power plants. While the “how” remains unanswered, officials claim that they have significantly reduced its payables to Chinese energy projects under the China-Pakistan Economic Corridor (CPEC) to Rs 391 billion ($1.4 billion). This move, aimed at managing its financial constraints, could potentially delay payments to other power plants or necessitate additional budgetary allocations.

Pakistan’s foreign policy missteps, particularly regarding its stance on the Russia-Ukraine conflict, have further strained its relationship with China.

Despite claims by the central bank that all outstanding dividend payments to Chinese investors, amounting to $16.3 billion, were cleared by the end of June 2024, Chinese companies have disputed this assertion.

Currently, fourteen power projects with a combined capacity of 8,020 MW, backed by Chinese investment, are operational under CPEC. However, Pakistan still owes substantial amounts to these projects, including Rs 80.2 billion to the Sahiwal power plant, Rs 66.3 billion to the Hub power project, Rs 82 billion to the Port Qasim power plant, and Rs62.5 billion to the Thar coal project.

The CPEC project, touted as a game-changer, has yet to deliver on its promises, with Gwadar Port remaining largely underutilized. Pakistan’s foreign policy missteps, particularly regarding its stance on the Russia-Ukraine conflict, have further strained its relationship with China.

As India continues to strengthen its economic ties with both China and Pakistan, the strategic landscape in South Asia is undergoing a significant shift. The recent meeting between Indian External Affairs Minister S Jaishankar and Chinese Foreign Minister Wang Yi is a testament to this changing dynamic.

China’s concerns regarding the security of its citizens in Pakistan are genuine, given the increasing incidents of violence and instability in the region. Also valid are its concerns over the non-payment and the very threat these challenges carry for its BRI project. However, to think that China will take a backseat and forgo its investment in Pakistan would be sheer stupidity. In all of my years of interaction with the Chinese, I firmly believe in the resilience of the nation and the ability of its leadership to turn the tables.

Beijing has more than once shown its ability and willingness to take security matters into their own hands. Multiple sources reveal that a potential agreement would allow Chinese security personnel to operate within Pakistan. This proposal, though previously resisted by Islamabad, has gained traction due to increasing pressure from Beijing. The agreement could further entail the use of armoured vehicles for transporting Chinese nationals.

China’s increasing security involvement in Pakistan, particularly in the strategic Gwadar Port, has significant geopolitical implications. Direct Chinese security operations could further solidify Beijing’s influence over Islamabad, potentially impacting Pakistan’s foreign policy and strategic autonomy. This heightened Chinese presence in the region could exacerbate tensions with other regional powers, notably India, which views Gwadar with suspicion.

The deployment of Chinese security personnel could introduce complex security dynamics, potentially leading to coordination challenges with Pakistani security forces. While necessary, enhanced security measures could also impede the smooth functioning of trade and economic activities in the region. The delicate balance between China’s security concerns and regional sensitivities will be a key determinant of the future trajectory of Sino-Pakistani relations and their broader impact on regional stability.

The other side of the picture would be the US’s perspective on the matter. Since Chinese boots on Pakistan’s soil undermine traditional US influence in the region and could potentially shift the geopolitical balance of power in South Asia. The US response to China’s growing security presence in Pakistan will most likely involve a combination of diplomatic engagement, strategic partnerships, and counterbalancing measures. It would be further interesting to see how India aligns itself economically with China and the US amidst this complex nexus.

What stands true, however, is that in the absence of any Foreign Policy direction, Gwadar will prove to be a zero-sum game for China and Pakistan. A deciding factor for the fate and friendship of these two countries.

The writer is Foreign Research Associate, Centre of Excellence, China Pakistan Economic Corridor, Islamabad.