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70 Years of Pak-China Friendship

Pakistan-China relationship cannot be understood by applying conventional theories or conceptual frameworks of diplomacy and international relation. The relationship is unique, wide-ranging and encompasses all fields of life. It is based on two inimitable ingredients, love and care, which are scarce commodities in international relation. It is not mere statement, history is full of events and incidents, where both countries exhibited the strength of their relationship and uniqueness. They stood by each other no matter what the situation was.

The journey of relationship started right after the establishment of China. Howbeit, the strong footing was provided by the first interaction between Pakistani Prime Minister Muhammad Ali Bogra and Chinese Prime Minister Zhou Enlai in 1955 at the Non-alignment conference. The meeting paved the way for future interaction and relationship. Again, being foreign minister of Pakistan Muhammad Ali Bogra led the efforts to conclude the boundary agreement between China and Pakistan. Thus, Muhammad Ali Bogra is considered the mastermind from Pakistani side to steer the relationship. Since then, Pakistan and China are together in multiple fields but well-being of people through economic cooperation is prime area of relationship.

The economic cooperation started way back in 1952 through a trade transaction of US$ 86 million (Pakistani export US$84 million). The trade agreement in 1963 was second major event. It was also important because it was signed right after the boundary agreement. Along the course of time, Pakistan and China kept on signing agreements on cooperation in different sectors like agreement on cultural cooperation 1965, science and cultural cooperation 1976 and education exchanges 1983 etc. China also provided Pakistan different types of grants and loans. First loan of US$ 60 million was provided in 1965. Pakistan was also offered loans of US$ 217 million during the period of 1970-75. China also provided the textile machinery to promote textile industry.

The major milestone on economic front was achieved in 1989. Pakistan-China signed an agreement of “promotion and protection of investments” to enhance the investment and economic cooperation. It led to first major investment in Pakistan from China. Huawei in 1998 opened its operations in Pakistan. Since then it is leading player in the field of technology. It is also one of the major taxpayers, as it paid US$ 43 million in 2018. It is also contributing in job creation and employed 16000+ Pakistanis. The indirect contribution in jobmarket is also substantial and it contributed 25000 indirect jobs. Haier Pakistan was next company to invest in Pakistan. It started its operations in 2001. It gave a new dimension to home appliances industry in Pakistan. It has created thousands of the job and opportunities for Pakistanis.

Zong Pakistan, which is part of China mobile is a big name in telecommunication market of Pakistan. It has revolutionized the mobile communication in Pakistan. It is biggest provider of data services and PTA highlighted that the Zong hold 55 percent share. It is also leading player of 4-G services. The investment of Zong has reached the level of US$ 2.2 billion in 2018, which is on increasing mode.

It is also believed among wider community that the investment agreement of 1989, also paved the way for the China-Pakistan Economic Corridor (CPEC). As, right after the signing the agreement both countries started to enhance cooperation in multiple economic fields. Government and non-government entities started to investment in Pakistan. Both governments also started to finalize trade agreements, energy cooperation, agriculture collaboration and science and technology cooperation. High level exchanges between the countries started to put more efforts to finalize different economic agreements.

Howbeit, the real impetus was provided by the Beijing Declaration, which was signed by President Musharraf and President Hu Jintao in 2003 in Beijing. In 2004 Pakistan and China signed preferential trade agreement to foster the trade. Simultaneously Pakistan and China started to negotiate the free trade agreement which concluded with signing the first FTA. President Musharraf again visited China in 2006 and signed multiple MoUs. President Hu Jintao visited Pakistan in 2006 and both countries agreed to enhance cooperation in diverse fields. The visit ended with signing two landmark agreements 1) Free Trade Agreement and 2) Framework Agreement on Energy Cooperation. In 2009, both countries also signed the FTA on services.

Pakistan and China kept on working closely to enhance the cooperation. In 2013, Prime Minister Li Keqiang of China, visited Pakistan. Prime Minister Nawaz Sharif and Prime Minister Li Keqiang finalized the comprehensive framework of economic cooperation. In 2015, President Xi Jinping came on state visit to Pakistan. He started his visit by declaring Pakistan and China iron brother. China-Pakistan Economic Corridor was launched during his visit. It is a multidimensional initiative, which has been designed by keeping in mind the needs of Pakistan. Pakistan and China jointly developed the long-term plan of CPEC. The long-term plan includes 1) Connectivity, 2) Energy, 3) Trade and industrial parks, 4) Agriculture development and poverty alleviation, 5) Tourism, 6) Cooperation in connecting people’s livelihoods and non-government exchanges and 7) Financial cooperation. The second free trade agreement was also signed in 2019. The focus of agreement is to create special opportunities to enhance trade.

Pakistan and China even continued to enhance cooperation during the COVID-19, when whole world was on hold. In March 2020, during the visit of President Arif Alvi, both countries signed two MoUs; 1) Agriculture Cooperation and 2) Science and Technology Cooperation. Agriculture MoU includes in 1) technology transfer, 2) capacity building for R&D 3) trade development, 4) agro-industry, 5) business development and 6) livestock and dairy industry development. Science and Technology MoU has been signed by keeping in sight the fourth industrial revolution and needs of Pakistan. Both countries are still working to enhance the cooperation.

The analysis of cooperation highlights few important things. First, economic cooperation always remained the prime area of focus between two countries. It is pertinent to mention here this because the opponents always tried to ignore the economic dimension and try to only focus on security cooperation. Second, Pakistan and China always keep on looking for avenue to enhance cooperation. Third, the cooperation was always followed the principle of win-win cooperation. Fourth, diversification is important element.

However, the most important aspect of cooperation is that it keeps growing with growing of countries. For example, after the 1978 reforms China started to emerge as major country at global level. As China continue to grow, China continued to enhance investment in Pakistan, to help Pakistan to grow. First glimpse came in 1989, which culminated with signing of CPEC in 2015. Now, Pakistan is one major investment hub for China. The investment is being designed to help Pakistan to come out of economic crises and emerge as a stable and economically sound country.