CORDIALITY OF THE SINO-PAKISTANI ECONOMIC TIES.
We are jubilant to mark year 2011 as the 60th anniversary of the establishment of diplomatic relations between Pakistan and China. History is magic that bounds the relationship between the two countries over centuries. The people from both sides enjoy a common ancient bond. The ancient people of today's Pakistan had a respect for the Chinese wisdom and knowledge. More than commercial, the Pakistan-China relationship is unique as it has its roots through ancient civilizations of Gandhara and Islamic period without a conflict and war but provide an unconscious civilizational dialogue in terms of modern need. The saying of the Holy Prophet (PBUH): 'learn if even you need to go up to China' validates this claim.
Enjoying a solid, firm, and fast growing cordial friendship of six decades, full-fledged formal diplomatic ties were set up between the two countries on May 21, 1951. Since then, supplemented by ancient bonds, the smooth growth of economic relationship between the two countries was also facilitated.
Pakistan paid a heavy price in terms of strained relations with the United States, Japan, and European nations for forging friendly ties with Red China in the 1950s and 1960s. Pakistan, however, did not move back a single inch in its policy in consolidating ties with China. Being a new and developing country that came into being only two years ahead of China's independence, at no point in time, Pakistan was worried about its China policy. Rather Pakistan, forcefully pursued its China policy during all odds in the Cold War era. It was a firm and a consistent policy throughout, where as, United States, Japan, European nations, India, and even Soviet Union drastically altered their policies, regarding China after 1970s.
It is not widely acknowledged in the world that Pakistan was behind opening up Red China to the outside world for commercial and trade purposes. However, Chinese leadership greatly values the role being played by Pakistan in this respect. Pakistan's diplomacy in the Sino-American normalcy is well known in the 1970s.
Therefore, let's focus how Pakistan's help facilitated the commercial opening of Red China to the far Eastern countries, Japan and invited Western criticism against it in the 1960s. Let's also discuss Pakistan's civil aviation agreements and their implications for country's foreign policy.
Pakistan's civil aviation agreements were of high international stature in the 1960s. Pakistan International Airlines (PIA) was first airline in the world that served and linked both Red China and the Soviet Union as well as major western cities in Europe and America at the peak of cold war. PIA started its Karachi-Kabul-Moscow service in May 1964 to fly on Frankfurt-London route and thus became the first airline in the world to fly over Moscow and beyond. Later, it wanted to extend its service to Tokyo via Canton and Shanghai in China to open up another country, closed by the West, lying across the ancient Silk Route and in return to link up China with Central Asia, Middle East and Europe.
The Sino-Pakistani civil aviation agreement was of considerable international importance, since it was the first of its kind, China signed with a non-Communist country (Pakistan). Earlier, in 1962, PIA desired to extend its services to Hong Kong but the British authorities refused to grant full landing rights, so PIA moved to China to negotiate a deal. In May 1963, a preliminary agreement was reached, routing PIA services via Canton and Shanghai and extending its European services to the Far East and providing faster services to Tokyo. The final agreement was signed on August 29, 1963.
PIA desired to link up Tokyo via its Karachi-Dhaka-Canton-Shanghai flight. China and Hong Kong welcomed PIA to operate such flights. It must be remembered that travelling between Shanghai and Canton took 48 hours by train and the link was irregular. Chinese Premier Zhou En Lai also expressed the hope that Japan would agree to let PIA fly its planes through Shanghai onto Tokyo.
The new route greatly facilitated diplomatic, political, and commercial intercourse between China and Pakistan. It opened new channels of opportunities between several nations. The growing number of trading activities in the Far East and Europeans visiting China made this route commercially viable. Japanese authorities, however, refused to grant landing rights to PIA flights from Shanghai. The route could not operate until April 1974 when PIA was allowed to enter Tokyo via Peking.
History reverses. Today, the United States and Japan are China's largest trading partners. However, 50 years ago, they wished to penalize Red China over Taiwan for commercial and political reasons. Japan and the United States fully opposed the opening of Red China via air commercial routes as proposed and backed by Pakistan. However, Pakistan fully respected and advanced China's case to world fora.
Frustrating over the Sino-Pakistani air agreement, United States postponed U.S. $ 4.3 aid programme to Pakistan destined for improvement to be made at the Dhaka Airport in the former East Pakistan (now Bangladesh). This was the first U.S. aid cut off to Pakistan. The United States believed that Pakistan's efforts would 'breach the efforts of the free world, which the Chinese communists wished to prevent'. Officials in Washington told that 'Pakistan is playing with fire in inviting a militant Communist nation to the doorstep in this part of Asia'.
India also strongly opposed the Sino-Pakistan air agreement. Indian Prime Minister Pundit Jawaharlal Nehru said that 'India would not allow Chinese planes to fly over Indian territory in operating the Sino-Pakistani air agreement'. Nevertheless, Pakistan remained adamant on her air agreement in spite of American, Japanese, and Indian objections. This gave a new dimension to the Sino-Pakistan relationship.
In this perspective, the Sino-Pakistan friendship is an asset for both countries. To the experts, this relationship is 'model of bilateral friendship'. It was because of this close fraternal understanding that bilateral relations were promoted between the two countries irrespective of domestic political regime changes and emerging issues after Pakistan recognized the People's Republic of China on January 4, 1950. Moreover, Pakistan's One-China policy was based on 'unforeseeable wisdom'. Since then, both countries' economic relations have been developing with fervent speed and good neighbourly spirits irrespective of ideological incongruity.
Today, the Sino-Pakistani trade has crossed the barrier of nearly U.S. $ 9 billion. Following year, this trade is expected to touch down the level of around U.S. $ 15 billion, which is the result of the Early Harvest Programme (EHP), Preferential Trade Agreement (PTA), Free Trade Agreement (FTA) and various other favourable policy frameworks that have been adopted since 2005 when trade hovered around U.S. $ 3 billion. This commercial relationship, which was fully backed by national leadership at both sides, gradually developed from less than a million dollar of trade in the 1950s to over U.S. $ 15 billion in year 2012.
Both countries were fortunate to have a firm leadership in all situations that was committed to their common resolve and aspiration of promoting bilateralism at multi-dimensional level in defence, economy, agriculture, space technology, culture, sports infrastructure, investment, energy, science and technology, industry, and education. By the end of year 2010, Chinese enterprises had signed contracts with Pakistan worth a total of U.S. $ 20 billion. China's Foreign Direct Investment (FDI) in Pakistan is hitting around U.S. $ 1.3 billion, while Pakistan's FDI in China has been recorded around U.S. $ 60 million in recent times.
In a much larger horizon of Sino-Pakistan economic relations, we need to shun an end to the myopic view of Eurasian trade relations. The Shanghai Cooperation Organization (SCO) could have the potential to open up Eurasian trade corridor by bringing together China, Russia, Central Asia, South and West Asia. Being an active observer and potential member, Pakistan possesses best opportunities to play the role of a true Transit State in this whole scenario by providing warm water port facility to over 20 landlocked states in the region. The significance of this route lies in history from Alexander the Great to the Mughals who used Eurasian route for trade in those centuries.
Modern infrastructure, just mentioned above, could bring enormous benefits to all stakeholders. This would help revive the historic Silk Route through Chinese province of Xingjiang. The TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project could easily become TAPIC (Turkmenistan-Afghanistan-Pakistan-India-China) by converting it economically more feasible and strategically more viable. It is expected that stakeholders would pay much attention to this option as it would inject a new boost to regional economies. In short, Sino-Pakistani relations have been expanding in multiple directions and going to prove further beneficial, not only for both countries mutual needs, but for the region as a whole in the future.
In short, the future of Sino-Pakistani commercial and economic relationship appears somewhat brighter than the existing relationship. Mega infra-structural projects such as the Gwadar Port, Karakoram railway link, extension of the Karakoram Highway (KKH) up to Tajikistan, and the gas pipeline from Iran and Turkmenistan through Pakistan, could divert the existing bilateral economic ties between the two countries to new but unprecedented heights by multiplying Pakistan's GDP. Therefore, there is an unexpected potential of economic growth between the two countries that must be explored in the coming days on speedy lines by tacking regional and global strategic environment.
The writer is an Islamabad-based expert on Japan & international political economy and author of a major volume on Pakistan-Japan economic relations.