Since 1950, when Pakistan recognised China, ties between Islamabad and Beijing have steadily grown and now involve multiple strategic objectives. The economic ties between the two have continued to expand, and China has been one of most reliable and consistent exporters of military hardware to Pakistan. The two have cooperated in the nuclear field as well as in missilery. In fact, one of the reasons cited by India to justify its May 1998 nuclear tests at Pokhran was to offset the Sino-Pakistani strategic combination.
In the shifting landscape of global strategic alliances, the Pakistan-China relationship has become even more pivotal as a counter to opposing hubs of power, the most important being the emerging Indo-US strategic partnership. Both Islamabad and Beijing have a stake in curtailing the outreach of this combination of power, and China is today actively engaged in using its relationship with Pakistan to enhance its influence in the Persian Gulf as well as Central Asia.
Inland, the two countries have agreed to extend the Karakoram Highway (KKH), to connect it with the Central Asian republics. On the Balochistan coast, China is engaged in building up the Gwadar port, the overbearing strategic importance of which has been ignored even as analysts focus on the project’s economic importance – the revenue as well as income from maintaining the port and supporting infrastructure. China has financed a significant portion of Phase I of the Gwadar construction and related road connections within Pakistan. In return, Islamabad has allowed sovereign guarantees to China regarding dispute resolution as part of the Bilateral Investment Treaty and the acceptance of Chinese naval presence.
The arrangement on Gwadar allows China to sit atop one of the world’s most important SLOCs, the acronym used by strategic analysts for ‘sea-lanes of communication’. Since the beginning of the war in Iraq, the Indian Navy has had an arrangement with its US counterpart to escort shipping through this SLOC from the Gulf of Aden to the Strait of Malacca, just east of the South China Sea. Being at Gwadar means China will only be 250 miles from the Strait of Hormuz, a key channel for the flow of world oil supplies and other commercial merchandise. Moreover, Beijing will gain direct access to the Persian Gulf. In the final outcome, the KKH extension and Gwadar port construction allow China to diversify its oil-import routes, as well as make its presence felt in both the Persian Gulf and Central Asia.
For Pakistan, this arrangement works towards buffering the Indo-US influence in the Persian Gulf and Arabian Sea waters. With India aspiring for a blue-water navy, it is to Pakistan’s advantage to pull China into its territory to forestall any possible Indian misadventure, including a possible blockade. Indeed, Pakistan plans to treat Gwadar as a ‘sensitive defence area’, and has made clear its intention of using the Chinese navy as a ‘forward defence’ against any maritime hostility.
The most direct impact of the Gwadar port will be on the United States. With its existing and projected interests in the Persian Gulf region, the US was looking to establish outright supremacy through its naval presence and the presence of amenable governments. Moreover, its maritime cooperation with India in the Arabian Sea was developed to achieve exactly what Pakistan and China are attempting through Gwadar – ie, to enhance their sphere of influence to oversee the shipping activity and the ‘great game’ of oil flows from the Gulf.
It is clear that Washington DC is not happy with the Gwadar arrangement, and internal Pentagon memos point to the Chinese presence as a worrisome factor. Some reports even indicate a US hand in the troubles in Balochistan, linked to Washington DC’s opposition to both the port project and proposed oil and gas pipelines from Iran. Pakistan has indicated that it is prepared to be at the centre of an energy grid that extends to China. There are already significant moves by India and the US acting in concert to help develop alternate port facilities in the Gulf in order to divert traffic from Gwadar.
An analysis of the complex structure of the alliances between the various countries opens up a number of possibilities for the future. While it is clear that Pakistan and China intend to challenge the Indo-US partnership in the region, economic and other forms of cooperation between China and India are also steadily growing. Trade ties between the two are reaching record highs. Moreover, the two economies are becoming increasingly complementary, and prospects for a lasting economic relationship are very bright. New Delhi and Beijing have also made moves to promote military cooperation in the form of joint exercises, some involving Russia as well. India is also a full member of the Shanghai Cooperation Organisation, under which it is working with China on counter-terrorism exercises.
To add to the cross-connections, Pakistan is arguably the most active US ally in the ‘war on terror’, and has received enormous military and economic support from Washington DC since 9/11. Islamabad enjoys the status of a major non-NATO ally, and the Pakistani political enclave remains highly susceptible to US pressure. There being little prospect of the ‘war on terror’ coming to an end, the US-Pakistan relationship is likely to remain intact for the near term. At the same time, however, anti-US sentiment among the Pakistani masses has grown, as have suspicions in the US with regard to Pakistan’s behaviour as a dependable ally.
To add to this ‘alliance maze’ is the possibility that the counter to Gwadar may come from port facilities in Iran. The US, given its overt opposition to current Iranian policies and its attempt to generate a global sanctions regime against Teheran, is likely to be caught between a rock and a hard place. On the one hand, it is adamant on increasing Iran’s international isolation; on the other, it is desperate to undermine Gwadar and all that this port project represents. There is a suggestion that the US might use India to lead the initiative to revitalise the Iranian facilities while turning a blind eye to the development.
There are also issues to be confronted within the Pakistan-China relationship. On a government-to-government level, Sino-Pakistan interests are likely to remain aligned for the foreseeable future. However, there is escalating bottom-up pressure being generated against Chinese trade interests within Pakistan. Bilateral trade is on the rise, amounting to USD 1 billion in the first quarter of 2006 alone, which is a manifold increase over the same period in 2005. Unlike the Sino-Indian relationship, however, the trade balance here remains heavily in favour of China. The two countries have also agreed on a free trade agreement (FTA), for which negotiations and implementation are proceeding concurrently. While the FTA is likely to further increase the overall trade volume, the balance will continue to benefit China, a matter causing consternation in Pakistani business circles.
There was already much resentment against the influx of Chinese goods in the Pakistani market, made possible through smuggling through the Karakoram Highway. Recent surveys have established that Chinese products worth between USD 1-3 billion are pouring into the country informally, and have replaced much of the informal trade in Indian goods. Interviews with small businesses suggest that the availability of smuggled Chinese goods has led to the closure of a number of cottage industries. The FTA, businessmen fear, will cause further devastation of small and medium enterprises in Pakistan. Thus, an increasing contradiction is becoming evident between the overall official vision of the Sino-Pakistani relationship and the commercial interests within Pakistan. Thus far, Islamabad had tried to maintain some balance by protecting key industries, but the FTA has removed that option. It is likely that the bottom-up pressure from Pakistani business could impact state-level ties with China.
Prioritising Pakistani stability
So what does the ‘alliance maze’ mean for the future? The most likely scenario is as follows: on a bilateral level, the Sino-Indian relationship will remain cordial in the short- to medium-term. However, China will continue to build stronger ties with Pakistan, and from time to time it will signal to New Delhi and Washington DC the importance it places on its relationship with Islamabad. In all likelihood, Pakistan and the US will continue to collaborate, albeit within an increasingly disparate framework. Islamabad would do well to draw its lines clearly, ensuring that US pressure does not undermine the Sino-Pakistani relationship. Meanwhile, India will enhance its influence in West Asia, even though it is unlikely that Iran would play on India’s turf unless the US-Iran tensions subside. The overarching alliance structure will not conform to the bilateral arrangements. Amidst these crosscutting relationships, it is safe to say that over the next decade the strategic balance of power in Southasia is likely to be defined by an Indo-US versus Sino-Pakistani alliance.
Given this, Islamabad should expect significant moves from the opposing camp to undermine its arrangement with Beijing. Targeting Pakistan’s internal fault-lines would be one way of doing that. Involvement in the Balochistan crisis could serve this interest, and the lingering Waziristan conflict could also be used to keep Pakistan unstable. Direct harm to Chinese interests in Pakistan could also affect the arrangement, for while Beijing let pass the February killing of Chinese engineers in Hub, near Karachi, frequent recurrence of such events could jeopardise any lasting collaboration on strategic mega-projects.
For Pakistan, internal stability comes above all else. For one, peace in Balochistan is essential for the progress on the Gwadar front. At the same time, Islamabad will have to ensure that indigenous anti-state elements do not stall strategic collaboration with China, nor allow the West to point fingers at Pakistan for harbouring extremists. Finally, while the pro-China developments are beneficial, a diversified foreign policy still remains essential. Pakistan’s role in the Muslim world and efforts to present Islamabad as a responsible nuclear power to allay Western fears must be invigorated concurrently.