Pakistan eyes $10 billion Chinese investment

Pakistan is expecting $10 billion Chinese investment to ease its ongoing energy crunch. According to plans unveiled by a dozen Chinese power-related companies, the proposed investment in energy generation, ranging from hydro to nuclear and wind power, can surpass this amount. In addition, other Chinese companies have indicated investing in projects varying from highways to housing.

Boosting Pakistan-China trade is yet another area, agreed between the Chinese leadership and President Asif Ali Zardari during his just-ended visit to China.

Two highways are to be built in Pakistan’s Gilgit-Baltistan area, including 165 kilometre long Skardu-Jaglot, and 135-kilometre long Thakot-Sazin. Out of the total cost of Rs45 billion, or $530 million of two highways, China will provide 85 and Pakistan 15 per cent.

The Presidents and CEOs of a dozen leading corporations specialising in defence production, petroleum, banking, industrial units, construction, civilian nuclear cooperation, agriculture, health, energy, mining, petroleum, and telecommunications discussed their investment plans with Mr Zardari.

The business leaders showed interest in investing in these other sectors. Pakistan plans to launch a mega housing project to build high-rise apartments in all cities for government employees. These will be joint project between consortia of Chinese and Pakistani private companies. The government will provide land and some essential inputs.

The Corporations which participated in the discussions included: EXIM Bank of China, The Three Gorges Dam Project Corporation, China Northern Railways Corporation, China Northern Industries Corporation, China Petrochemical Corporation, Sinotruk, Tebian Electric & Apparatus Stock Co., Sinohydro Corporation, and Industrial & Commercial Bank of China.

A Chinese company plans to generate 500 megawatts of wind power. It will set wind turbines along the coastal areas of the southern Sindh province, alongside the Arabian Sea. It will cost $1 billion.

Chinese Prime Minister Wen Jiabao said China attaches a great importance to its trade with Pakistan which not only benefits the people of the two countries but also had a strategic significance.

The Chinese Minister for Trade estimates, the present two-way volume of trade with Pakistan can be doubled to $15 billion by 2015, under FTA and other plans.

President Hu Jintao said China has become Pakistan’s second largest trading partner. We pledge to make steady progress in cooperation with Pakistan in energy, and telecom sectors and construction of Neelum-Jhelum hydropower electric project, and Pakistan Tlecommunications Satellite project.

Since assuming office, President Asif Ali Zardari has declared relations with China as the cornerstone of Pakistan’s foreign policy. To enhance and cement the bilateral relations, Zardari decided to visit China quarterly. The recent visit of President Asif Ali Zardari to China is the 5th in a series of visits that started since assuming the office in 2008. Zardari’s visit came at a time when Pakistan faces a difficult economic situation because of war against terrorism and when China has embarked on a policy to redefine its economic objectives with Pakistan in particular and the world in general.

It is important to mention here that since President Zardari assumed office, Pakistan and China have concluded 60 agreements. The main focus of the recent visit was on the new economic initiatives that have been launched recently. It includes building hydro dams, expanding banking operations, transfer of hybrid seed technology, roads and communication networks, cooperation in the agriculture sector by focusing on optimal utilisation of water and development of new high yielding varieties of wheat and cotton, Thar Coal Project and dredging of Tarbela reservoir.

President Zardari has continued his policy initiatives that were taken with his first state visit of China in October 2009. During his first state visit Pakistan and China signed 11 agreements on trade and economic cooperation, infrastructure projects, agriculture, mining and communication. In order to realize his objectives and to give practical shape to his ideals president Zardari visited China again in 2009. Several MoUs were signed between China and Pakistan to promote political understanding and cooperation between the two ruling parties. Zardari’s efforts were hailed by Chinese media.

President Zardari highlighted the need to cooperate in economic and energy sectors. It is worth mentioning here that during his first state visit President Zardari was greeted with 21-gun salute presented to any Pakistani head of state after over a decade.

By focusing on China on a priority basis President Zardari has continued the policy initiated by Shaheed Zulfiqar Ali Bhutto, the founder of the PPP and the prime minister of Pakistan in the 1970’s. Bhutto as foreign minister during the Ayub regime convinced the latter to open up with China. Bhutto visited Beijing and signed trade and military agreements with the Chinese government. As a result of these agreements China offered help to Pakistan in a number of military and industrial projects. Sino-Pakistan boundary agreement was signed in 1963. In the 1970’s the PPP government under Zulfiqar Ali Bhutto kept close relations with China.

Shaheed Benazir Bhutto followed in the footsteps of her father and cemented close ties with China. Recognising the efforts of Zulfiqar Ali Bhutto and Benazir Bhutto in cementing closer ties between Pakistan and China, President Hu Jintao on October 26, 2008 said, “Ali Bhutto and Benazir Bhutto made prominent contributions to the initiation and development of the China-Pakistan relationship, which the Chinese people will never forget.”

President Zardari has continued the Bhutto legacy of maintaining close relations with China. He has reiterated time and again that Zulfiqar Ali Bhutto was the person who founded Pakistan’s relationship with China at a time when China was ostracised from the international community. Zardari has given a fresh impetus to those relations by announcing to visit China every three months.

President Zardari wants to build a robust relationship with China. During his first visit, Asif Ali Zardari visited different regions of China to get an eye witness account of Chinese economic development. He hailed China as “the future of the world.” During his recent visit Zardari met business and energy leaders of China. The main focus of these meetings was joint economic projects, promoting regional connectivity, counter militancy and terrorism, harnessing new sources of energy and enhancing people to people contacts between the two countries. The president addressed a forum in Beijing whose main focus was energy security for Pakistan.

Since Pakistan is a neighbour of the resource rich countries in the Middle East, Central Asia and West Asia, the president emphasized the need to establish energy trade corridors among these countries. China has also announced 50 million Yuan grant to Pakistan to undertake new projects. The two countries also signed an agreement on economic and technical cooperation. In this regard four MoUs were signed by the two presidents. They include health, agriculture, and geological survey.

The two sides agreed to hold meeting of the Pak-China Joint Economic Forum in Islamabad to decide on a host of issues ranging from currency swap to opening of branches of Chinese banks in Pakistan and relocating industries in the industrial zones. The Chinese commerce minister will visit Pakistan in this regard.

In order to fulfil Pakistan’s energy needs the China National Energy Administration will work out with Pakistani authorities modalities of tackling Pakistan’s energy needs. In order to celebrate the 60th anniversary of Pak-China diplomatic ties both countries decided to set up a special committee for the purpose.

In order to enhance regional connectivity both sides discussed the 500 million dollars Karakorum Highway up gradation and the National Trade Corridor. Both countries agreed to modernise transportation and trade. In a meeting with the Chinese ministers for Water Resources and Agriculture, President Zardari reviewed progress on the hybrid seed and irrigation projects. China also decided to increase scholarships for Pakistani students.

China has responded to Pakistan’s one China policy with an assurance to support Pakistan at UNO and at other multilateral forums. China has also assured Pakistan of full support in war against terrorism. While describing Pak-China relations President Hu Jintao said, “China is a friend and a strategic partner committed to the promotion of stability and economic progress of Pakistan. The two countries will continue to work together to further deepen people to people contacts.” To this president Zardari said, “It is our belief that Pakistan can act as force multiplier for China and we will continue to work towards this end.”

In order to fulfil Pakistan’s energy needs China has announced to install two nuclear reactors in Pakistan. On this president Zardari said that both the countries will honour their non-proliferation obligations while installing the reactors.

While commenting on President Zardari’s visit to China, a Chinese foreign ministry spokesman Qin Gang said, “We believe that this visit of President Zardari has consolidated and deepened the traditional friendship of the two countries as well as boosted friendly exchanges and practical cooperation between the two parties which made it very successful visit.”

Viewing by these developments which took place during Zardari’s visit to China it can be concluded that the visit was a great success. Pakistan can draw benefits from Chinese experience and development in the technological field. Pakistan needs China and China needs Pakistan as both are confronted by a hostile neighbour. The writer is a Provincial Minister Sindh & Secretary Information PPP Women Wing Sindh.



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