CHINA-PAKISTAN ECONOMIC RELATIONS By:
INTRODUCTION In February 2006, while addressing the Pak-China Business Forum, President Pervez Musharraf of Pakistan poetically described China-Pakistan relationship as “deeper than the ocean and higher than the mountain." Hopes of progress in bilateral relationship were further consolidated by the launch of a bus service between Gilgit, in Northern Areas of Pakistan, and Kashgar, in Xinjiang province of People’s Republic of China, on 15 June 2006. However, in reality, though the military- strategic relationship between the countries is in good shape, the economic dimension is not as promising. The present report endeavors to examine the economic aspect of China-Pakistan relationship, both in the historical and the present context.
LITERATURE REVIEW MILITARY-STRATEGIC RELATIONSHIP Pakistan’s “all weather relationship” with China has endured a number of hiccups in the last six decades inspite of the completely different type of changes in their political system. While Pakistan has experienced a number of military regimes with democratic intervals; China has passed through a number of domestic revolutions.Pakistan was the third country to recognize the People’s Republic of China. It was also among the countries opposing the United Nations resolution recognizing China as an aggressor in the Korean War. By the end of the1950s, both the countries expressed intentions to condone each other on minor issues. While Pakistan did not overtly react to Tibet’s occupation by China, the latter did not criticize Pakistan’s joining of the Southeast Asia Treaty Organisation (SEATO), which was meant to contain China. After the 1962 war, their relations went through an irreversible transformation. Pakistan solved the border dispute with China in 1963 and subsequently, both countries concluded the Civil Airlines Agreement. Chinese ultimatum to India during the Indo-Pakistan War of 1965, which was meant to ease the pressure on western front, further solidified this relationship. Pakistani press coverage of this event compared it with the United States’ embargo on arms
trade with both belligerent states, despite Pakistan being a member of SEATO. These were the formative years when common perception in Pakistan began assuming China as its national saviour. In the 1970s, the international situation took a definite turn. East Pakistan underwent a violent uprising and China while keeping an eye over events shaping up in South Asia, was also in a dilemma over how to sustain its relationship with Pakistan. Chinese helplessness in supporting Pakistan during the Indo-Pakistan War of 1971, because of cold weather and the Russian buildup on its frontiers, however, did not affect the bilateral relationship. China made up for its earlier helplessness by vetoing Bangladesh’s entry into the UN, an event that could take place only after Pakistan itself had recognized Bangladesh. As a result, the popular perception of China as a trusted ally of Pakistan was solidified. By 1979, the
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