Implication of Sino-Pak Trade Relations During 1958-2008

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IMPLICATION OF SINO-PAK TRADE RELATIONS DURING 1958-2008

Dissertation Submitted to the

BOARD OF ADVANCED STUDY AND RESEARCH

University of Karachi, Karachi, Pakistan

In fulfillment of the Requirements For the Degree of

DOCTOR OF PHILOSPHY In Political science

By Research Scholar MUHAMMDAD HABIB

Research Supervisor PROFESSOR DR. MUHAMMAD ABDULLAH QADRI

Department of Political Science University of Karachi, Karachi, Pakistan 2018

BOARD OF ADVANCED STUDIES & RESEARCH University of Karachi Certificate I have gone through the thesis titled “Implication of Sino-Pak trade relations During 1958-2008” submitted by Mr.Muhammad Habib for the award of Ph.D degree and certify that to the best of my knowledge it contains no plagiarized material.

Date: March 2018 Professor Dr Muhammad Abdullah Qadri Supervisor Department of Political Science

ACKNOWLEDGEMENTS

Praise to the Almighty to whom, I owe my attempt at completing this work. The struggle and effort to initiate and fulfill this task has been the blessing and mercy of Allah. I do not consider myself worthy of it without the constant strength and direction that he bestowed upon me at every stage of research and writing.

I am extremely thankful to my research supervisor Prof Dr Muhammad Abdullah Qadri. He became a source of intense support and inspiration at a time when I had relapsed into a state of confusion and uncertainty. He has definitely in my case, played the role of the legendary mentor. His encouragement infused a new spirit in me and enabled me to pick up the threads from a near to lost endeavor. I will never be able to thank him enough.

I strongly acknowledge and pay my thanks to Prof Dr Muhammad Ahmed Qadri for his advice and scholarly guidance throughout my research work. He was a source of encouragement and inspiration for me always.

I would also like to acknowledge with a great sense of gratitude to Dr Suwaibah Ahmed Qadri who gave the support to organize the research work for successful completion.

Special thanks go to Mr Atif Latif and Mr Akash Haider Shah for assisting me to interpret the data gave me support and interest to achieve this goal.

I would like to acknowledge and appreciate my Parents, and whole family for their support, encouragement and deep interest in my studies.

I would also like to acknowledge and say thanks to office superintendant and Liaison officers at the Embassy of China at Karachi and Islamabad who helped me in collecting the Data in my thesis.

My friends have always been there for me. To name and thank them would require volumes. Here I must acknowledge the support and encouragement I received from Mr Adnan Khattak, Chaudary M Ilyas, Mr Rahies Khan, Mr Ilyas khan, Mr Zabit Nazim, Mr Atif Iqbal Najmi, Mr M Ashraf they restored in me a lost confidence and their youthful energy led me to wind up my work in the best possible way. May Allah bless them, always.

I would like to pay a special gratitude to my colleague Mr Muhammad Iqbal not only supporting and encouraging me but giving me the joy.

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Lastly, I must acknowledge the cooperation of the institutes where I worked and from where I was able to collect my research material I am deeply indebted to the State Bank library, Muhammad Hussain library University of Karachi Library at Department of Political Science University of Karachi, Islamabad National Library, National Institute of Historical and cultural Research, Indus University library Karachi, DHA Central library Karachi. I am especially thankful to all those who helped me out in those institutions and made my work considerably.

Finally, I must express my deepest gratitude to the respondents of this study, who extended their best cooperation in this endeavor.

Muhammad Habib Ph.D Scholar Department of Political Sciences University of Karachi

ABSTRACT

The aim of this research is to emphasize on the Sino-Pak trade relationships as these two states are not friends only but as well as a good neighbor and true believer of each one, their relationships are based on trust, mutual co-operation and respect. Previously Pakistan is among those countries which took step towards recognition of China as an independent state since then their relationships are strong, smooth and are known as “all weather friends”. The Sino-Pak political relationships were started in the year 1951. The relationships have a foundation on joint compact which is in the benefit of both states; one of the essential objectives of foreign policy of Pakistan is to strengthen its forthcoming relationships with all countries particularly with its neighbors. It is too reality that China has also supported Pakistan in each and every field particularly in trade and industry and military phase.

Although Pakistan apprehends the Peoples Republic of China in January, 1950.Cotillion expedient relations were established in May, 1951. However, revelatory and beneficial co-operation started in the early mid-60s e.g. trade (January 1963), air services (August 1963) border demarcation (March 1963), and cultural agreements (March 1965) were signed between the two countries. This period has been fruitful cooperation in political economic commercial technological, military and cultural fields. Over the years, Sino-Pak friendship has become a shining example of “time tested” and “all-weather friendship”. Since 1965 nearly all Pakistani heads of government and state had visited China. Besides, there have been multifold exchanges of different delegations to maintain this “historic friendship” in place. Both countries agreed on most of the world issues and their friendship remains unaffected by change of government and caprice of international politics.

China’s generosity has been considerable and constant in serving Pakistan in defence manufacture. Subsequent to the United States weapons prevention after the 1965 combat, it had been unlimited armed provisions, equipment and technology. Altogether both countries have been build tanks, aircrafts, and formed gun bullets. A number of the well-known cases of Chin’s collaboration are the beginning of the HIT, Heavy Industries Taxila, improvement and extension of the facilities at the Pakistan Ordinance Factories (POF) Wah, Aeronautical Complex at Kamra, cooperation in ship building energy production plants at Jamshoro, Guddu and Ghazi Barotha agreement in 1965 with the NHA to construct two segments of the Indus main road at an expenditure of 91 million dollar; construct a railway-line between Lodhran and Peshawar, hold up in water and mineral searching in NWF and Balochistan, in Balochistan the Saindak project for the extraction of copper and gold, recognized Pakistani space plan in 1990; beginning of a test satellite with a

missile completed in China and particularly then 790kilometers KKH the “8th wonder of the world obviously”.

There is a requirement to inject greater economic contented in Sino-Pak relations, mollifying Chinese anxiety of Pakistani support to Taliban in Afghanistan and its uncertainties about Islamic extremism spilling into its border province of Xinjiang. Presently it has also felt need that China Pakistan relations should be stronger more at the societal level as well the state to state ties. The president of China Jiang Zemin confidently held responsible India intended for the present anxiety in South- Asia. In his initial enduring response to the atomic experiments by Pakistan and India on 3rd June 1998, he as well accuse India of creation of objective both Pakistan and China and decorated out that the atomic cooperation between Pakistan and China was ascetically nonviolent in the region of technology of atomic reactors and tinted out that eleven system agitated were under the supervision of the IAEA. The mutual communiqués destined the nuclear tests by India and Pakistan, call on them to sign the CTBT and NPT and urged a peaceful agreement of political problems together with that over Kashmir through dialogue. China and the US decided to work jointly to hold the dangers likely to come up from the proliferation of the South Asia.

China had signed FTAs with eight states and areas as well as ASEAN, which had turn out to be functional from 1st January, 2010. Countries comprises of ASEAN currently are benefit from a trade excess with Chinese. In this FTA Chinese had agreed gigantic dispensation to ASEAN and tariff abolition covers 90 percent of goods traded amongst ASEAN countries and China. Underneath this FTA the typical tax rate of Chinese cargo from the ASEAN will be 0.1percent in its place of 9.5 percent.

If it would be compared Chinese FTA with Pakistan and other ASEAN countries one will conclude that the goods enclosed under the Sino-ASEAN FTA at 0 %t tax set ASEAN on an improvement as on the same bits and pieces. There are duties on exports from Pakistan depiction Pakistan’s goods less gorgeous for Chinese buyers. The economic enlarge of China in our neighborhood is a historic chance for Pakistan to achieve enlargement at a fast speed by creating substantive and workable means for economic collaboration.

خالصہ

اس تحقیق کا بنیادی مقصد دونوں ریاستوں کے مابین نہ صرف دوستی بلکہ پاک چین تجارتی تعلقات پر زور دینا ہے۔ اس کے ساتھ ساتھ ایک اچھے پڑوسی، اعتماد پر مبنی رشتے، باہمی تعاون اور احترام کے رشتوں کو استوار کرنا ہے۔ ماضی میں پاکستان کا شمار ان ممالک کی فہرست میں ہوتا ہے جنہوں نے ایک آزاد ریاست کے طور پر چین کی حیثیت کو تسلیم کرنے کی طرف پیش قدمی کی جس کے نتیجے میں ان کے تعلقات میں وقت گزرنے کے ساتھ نہ صرف پائیداری اور مضبوطی آئی بلکہ ان دونوں کو ایک دوسرے کے دکھ سکھ کا ساتھی سمجھا جانے لگا۔تاریخی اعتبار سے ان کی سیاسی پہچان میں تعلقات کی ابتداء 1951ء سے ہوئی جس کی وجہ سے دونوں ریاستوں کا فائدہ ہوا اور یہ اس لئے ہوا کہ پاکستان کی خارجہ پالیسی کے اہم ترین مقاصد میں سے ایک مقصد اپنے ہمسایہ ممالک کے ساتھ اچھے اور مضبوط تعلقات استوار کرنا ہے۔ یہ بھی ایک ناقابل فراموش حقیقت ہے کہ چین نے پاکستان کی ہر طرح مدد کی خواہ وہ عسکری اعتبار سے ہو یا صنعتی اعتبار سے۔ اگرچہ 1950ء سے پاکستان نے چین کی ہر میدان میں حمایت کی ہے مگر ان تعلقات کے ثمرات 1960ء کے وسط میں ظاہر ہونا شروع ہوئے۔ مثالً صنعت )جنوری 1960( ، ہوائی خدمات )اگست 1963(، سرحدی حدبندی )مارچ 1963( اور ثقافتی )مارچ 1965( معاہدات پر دونوں ممالک کے درمیان دستخط ہوئے۔ اس پعرصہ میں سیاسی، اقتصادی، تجارتی ، تکنیکی اور ثقافتی شعبوں میں نتیجہ خیز تعاون حاصل ہوا۔ ایک ہی سال کے دوران پاک چین دوستی "آزمائش وقت" اور "ہر موسم کی دوستی " کی ایک روشن مثال بن گئے۔ 1965ء کے بعد سے ہر حکومت اور ریاست کے سربراہوں نے چین کا دورہ کیا۔ اس ّ ّّتاریخی دوست ٗی ّٗ کو برقرار رکھنے کےلئے دونوں ممالک کے درمیان "تاریخی دوستی" کو برقرار رکھنے کےلئے دونوں ممالک کے درمیان مختلف وفود کے دورے ہوئے۔ دونوں ممالک کی حکومت اور بین االقوامی سیاست کے اثر انداز ہوئے بغیر دونوں ممالک کی دوستی ہمیشہ قائم رہی۔ پاکستان کی دفاعی تیاری کے عمل میں چین کی خدمات کافی پر سخاوت اور مسلسل رہی ہیں۔ 1965ء کی جنگ کے بعد امریکی ہتھیاروں کی روک تھام کے بعد سے چین نے پاکستان کو المحدود مسلح دفعات، سازو و سامان اور ٹیکنالوجی مہیا کی۔ مجموعی طور پر دونوں ممالک نے ٹینک، ہوائی جہاز اور بندوقت کی گولیوں کے کارخانے تعمیر کئے۔ چین کے تعاون کی بہت ساری مثالوں میں سے ہوئی انڈسٹری ٹیکسال، پاکستان آرڈیننس فیکٹریز )پی او ایف( واہ کا قیام،

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کامرہ میں ایروناٹیکل کمپلیکس، بحری جہازوں کی تعمیر میں تعاون اور توانائی کی پیداوار کے پالنٹ کا قیام 1965ء میں 91 الکھ ڈالر کی الگت سے جامشورو، گڈو اور غازی بروتھا کے معاہدے، لودھراں اور پشاور کے درمیان ریلوے الئن کی تعمیر، بلوچستان میں سونے اور تانبے کے نکالنے کا سینڈک منصوبہ، 1990 ء میں پاکستان کے خالئی منصوبہ کو تسلیم کرنا اور اسکا آغاز میزائل سے کیا جو کہ چین میں مکمل ہوا اور اس کے بعد 790 کلومیٹر شاہراہ قراقرم کی تعمیر آٹھواں عجوبے کی طرح ہے۔ پاک چین تعلقات میں بہتری النے کےلئے یہ ضروری ہے معاشی میدان میں اس بات کی ضمانت دی جائے کہ اس کی سرمایہ کاری یہاں محفوظ ہے اور یہ بھی ضروری ہے کہ چین کے صوبے سنکیانگ میں افغانستان کی وجہ سے اسالمی انتہاپسندی کے بڑھتے ہوئے اثرات کو روکنے میں چین کی مدد کی جائے۔ یہ وقت کی اشد ضرورت ہے کہ پاک چین تعلقات سیاسی اور معاشرتی سطح پر مضبوط سے مضبوط تر ہوں۔چین کے صدر جپمن جیانگ نے جنوبی مشرقی ایشیائ میں موجودہ صورتحال کا ذمہ دار بھارت کو ٹھہرایا۔ 3 جون 1998ء میں پاکستان اور بھارت کی طرف سے کئے گئے جوہری تجربات کے نتیجے میں بھارت پر الزام عائد کرتے ہوئے انہوں نے کہا کہ پاکستان اور چین کے درمیان جوہری تعلقات عالقے میں غیر تشدد رویے پر مبنی ہیں اور ایٹمی ری ایکٹروں کے اندر اور باہر رنگ کے گیارہ نظام آئی اے ای اے کے زی ِر نگرانی ہیں۔ سیاسی حل مزاکرات کے ذریعے نکالنے کی غرض سے سی ٹی بی ٹی اور این پی ٹی کے معاہدات پر دستخط کرنے پر آمادہ کیا گیا اور اس بات پر زور دیا گیا کہ سیاسی مسائل کا پر امن حل نکاال جائے۔چین اور امریکہ نے جنوبی ایشیاء میں جوہری پھیالئو کے خطراات کو ختم کرنے کے لئے مشترکہ طور پر کام کرنے کا فیصلہ کیا۔ چین نے عالقائی آٹھ ریاستوں اور آسیان ممالک کے ساتھ ایف ٹی اے کے معاہدہ پر دستخط کئے جو 1 جنوری 2010ء سے فعال ثابت ہوا۔ آسیان ممالک فی الحال چین سے تجارتی اعتبار سے نفع حاصل کررہے ہیں۔ اس معاہدے میں چین نے آسیان کے ساتھ درمیان تجارت پر 90 فیصد ٹیکس کا خاتمہ کیا۔ اس معاہدے کے تحت آسیان ممالک سے چین کی طرف تجارت پر 9.5 فیصد ٹیکس کی جگہ صرف 0.1 فیصد ہو گیا ہے۔ اگر چینی ایف ٹی اے کا موازنہ پاکستان اور دیگر آسیان ممالک کے ساتھ کیا جائے تو بندہ اس نتیجے پر پہنچتا ہے کہ جن اشیائ کی تجارت چین اور آسیان معاہدہ کے تحت ہوگی ان پر شرح ٹیکس تقریباً صفر ہوگی۔ پاکستان سے برآمدات پر ٹیکس ہے کیونکہ پاکستانی اشیاء چینی

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خریداروں کےلئے جاذب نظر نہیں ہیں۔ چین کے پڑوسی ہونے کی وجہ سے اس کی معاشی وسعت پاکستانی معیشت کو ٖفروغ اور توسیع کی غرض سے ایک بہترین موقع ہے۔

ABBREVIATIONS

MFN: Most Favored Nation KKH: Karakoram Highway HIT: Heavy Industries Taxila POF: Pakistan Ordnance Factory NWFP: North West Frontier Province IAEA: International Atomic Energy Agency CTBT: Comprehensive Test Ban Treaty NPT: Nuclear Non-Proliferation Treaty FTA: Free Track Agreement ASEAN: Association of South East Asian Nation FWO: Frontier Works Organization GT Road: Grand Trunk Road MCC: Metallurgical Construction Corporation SML: Saindak Metals Limited GOP: Government of Pakistan CDB: China Development Bank US: United States CNNC: China National Nuclear Corporation PAEC: Pakistan Atomic Energy Commission PWR: Pressurized Water Reactor PNPFC: Pakistan Nuclear Power Fuel Complex NPP: Nuclear Power Plants NFEP: Nuclear Fuel Enrichment Plant PAC: Pakistan Aeronautical Complex KARF: Kamra Avionics Rebuild Factory CDB: China Development Bank PCICL: Pakistan China Investment Company Limited DFI: Developmental Financial Institution EDI: Electronic Data Interchange NDRC: National Development and Reform Commission of China CNSA: Suparco and National Space Administration MRDL: CPEC: China Pakistan Economic Corridor SCGP: Saindak copper-Gold China Limited Project ADB: Asian Development Bank CENTO: Central Treaty Organization CHASNUPP: Chashma Nuclear Power Plant DPRC: Democratic People’s Republic of China FATA: Federally Administered Tribal Areas FDP: Friends of Democratic Pakistan

FDI: Foreign Development Investment GATT: General Agreement on Tariff GDP: Gross Domestic Product IBRD: International Bank for Reconstruction and Development IMF: International Monetary Fund KANUPP: Karachi Nuclear Power Plant MOFA: Ministry of Foreign Affairs SAARC: South Asian Association for Regional Cooperation PML (N): Pakistan Muslim League (Nawaz) PPP: Pakistan People’s Party PIMS: Pakistan Institute of Medical Sciences PIA: Pakistan International Airlines PCISR: Pakistan Council for Scientific and Industrial Research NGO: Non Government Organization NEWT: Nuclear Weapon Elimination NATO: North Atlantic Treaty Organization MoU: Memorandum of Understanding SEATO: South East Asia Treaty organization UN: United Nations URENCO: Uranium Enrichment Centrifuge Consortium WTO: World Trade Organization GDP: Gross Domestic Product CTGC: China Three Gorges Cooperation TEC: Trade and Energy Crises CCP: China’s communist party PCNA: Post Crises Needed Assessment SEZ: Special Economic Zone MTOE: Million Tons of Oil Equivalent WAPDA: Water and Power Development Authority PSDP: Public sector Development programme EAD: Economic Affair division NJHP: Neelum Jhelum Hydro-power Project PPIB: Private & infrastructure board CWE: China international water & Electric Corporation SLOC: Sea lines of communication JEWA: Joint energy working group POWs: Prisoners of War PLA: People’s Liberation Army PTA: Preferential Trade Agreement AWACS: Airborne early warning system SARS: Severe acute respiratory syndrome ETIM: East Turkistan Islamic movement BLA: Baloch liberation Army

TCUG: Thar coal underground Gasification SCO: Shanghai co-operation organization LEA: Law Enforcement Agencies ETLO: Eastern Turkistan Liberation organization MTCR: Missile Technology Control Regime TAPI: Turkmenistan-Afghanistan-Pakistan-India LEA: Law Enforcement Agencies MTOE Million Tons of Oil Equivalents NJHP Neelum Jhelum Hydel Power Project PSDP Public Sector Development Programme

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List of Tables

S.N Topic Page No o 1 Sino-Pakistan Trade 2001-2010 (100mm USD) 13 2 The Metalled Trans-Mountainous Road System in the 26 Hindukash, Himalaya and Karakoram 3 China’s external Investment, 2005-2011 153 4 List of Early Harvest CPEC Projects 184

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CONTENTS

Certificate II Acknowledgements III Abstracts V Abbreviations VII List of Tables X Contents XI

TABLE OF CONTENTS

Chapter- 1

Introduction S.No Topic Page No 1.1 Introduction to Sino-Pak trade relations 1 1.2 Research questions 6 1.3 Justifications 6 1.4 Methodology 7 1.4.1 Theoretical framework 7 1.4.2 Aims and objectives 9 1.4.3 Hypothesis 10 1.5 Organization of the thesis 10

Chapter-2

Past Pak –China economic relations

2.1 History of Pak-China Trade Relations 12 2.2 Air Transportation Agreement Between China And 13 Pakistan 2.3 Boundary Agreement between Pakistan and China, 2 18 March 1963

2.4 Border trade Agreement (1963) 22 2.5 Construction of Karakoram Highway (August 1970) 26 2.5.1 Socio-Ecological Change in Hunza 29 2.5.2 Extraction of Natural Resources 30 2.6 Construction of Saindak (Balochistan) an Integrated 30 Mineral Project

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2.6.1 Extraction of Zinc and Lead 31 2.6.2 Exploration of Gas and Oil 32 2.7 Building Chashma Nuclear Plant With Chinese 33 Collaboration 2.8 Setting Up Heavy Mechanical Heavy Electrical And 35 Aeronautical Complex In Pakistan With Chinese Assistance And Collaboration 2.9 What are the main Characteristics of China-Pakistan 37 relations? 2.9.1 There Is Great Promise For China-Pakistan Relations In 39 The 21st Century 2.10 Can Pakistan eventually become a trade and energy 40 corridor for China 2.10.1 The declaration Teshkent 10 January 1966. 43 2.10.2 China-Pakistan joint Communiqué’s 31st March 1966 45 2.10.3 Speech By Chief Of The General staff Haung Yaung 47 Sheng 2.10.4 Zhou En Lai’s Speech extract on 13 July 1969 48 2.10.5 Zhou En Lai’s Speech at the Benquet given by Nur Khan 48 in Peking 16 July 1969 2.10.6 Sino-Pak Joint Communiqué’s Extract On 14 November 49 1970 By The President Yahya Khan to China 2.10.7 Sino-Pak Joint Communiqué’s On 2nd February 1972 Z A 50 Bhutto’s State Visit To China 2.10.8 Statement By General Muhammad Zia Ul Haq Chief of 52 Army staff and Marshal Law administrator 27 September 1977 2.10.9 Premier Keng Peo’s speech at the completion of the 52 Karakoram Highway 18 January 1978 2.10.10 Speech by President Zia ul Haq at the inauguration 53 ceremony of 28th October 1979 (Extracts) 2.11 Beginning of a meaningful economic cooperation 59 2.11.1 Chinese Premier Zhu Rounji’s visit May 2001 60 2.11.2 Pervez Musharraf president of Pakistan visit to China 62 December 2001. 2.11.3 President Pervez Musharraf’s visit November 2003 64 2.11.4 Shaukat Aziz, the Pakistani Prime Minister visit to China 64 December 2004 2.11.5 Wen Jiabao’s Chinese Premier visit on April 2005 65 2.11.6 Pervez Musharaf President of Pakistan visit to China 66 February 2006 2.11.7 China’s President Hu Jintao’s visit to Pakistan November 67

2006 2.11.8 Shaukat Aziz the Pakistani Prime Minister visit to China 67 2007

Chapter-3

Current Areas of Co-operations

3.1 China- Pakistan Investment Company Limited(CPILC) 69 3.1.1 Company Structure 69 3.1.2 Finance Ministry of Pakistan 69 3.1.3 China Development Bank-China 69 3.1.4 Mission of company 70 3.1.5 Vision of company 70 3.1.6 culture and values of company 70 3.1.7 Core Values of Pak-China Investment Company 71 Limited 3.2 New Proposals And Projects With Sizeable Chinese 71 Investment 3.2.1 Wen. Jiabao Chinese Prime Minister Visit To Pakistan 75 3.2.2 Supplementary Investment By China In Saindak Gold 77 Mines and Copper 3.2.3 Metallurgical Corporation Of China Limited (MCC) 78 3.2.3.1 Saindak Copper-Gold Project 79 3.2.3.2 Extraction of Copper In Afghanistan 79 3.2.3.3 Extraction of Nickel in Papua New Guinea 79 3.2.3.4 Saindak Project: Workers and Local community is 80 suffering 3.3 Trade and Transit 81 3.3.1 The Free Trade Agreement(FTA) Between China and 81 Pakistan 3.3.2 Implication of Four Nation Transit 87 3.3.3 Communications 93 3.3.3.1 Construction of Gwadar Port 93 3.3.3.2 Up Gradation of The Karakoram Highway 96 3.3.4 Defence 97 3.3.4.1 Frigates For Pakistan Navy 98 3.3.4.2 The Aircraft Karakoram -8 (K-8) 100

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Chapter-4

Emerging National & Global Scenario

4.1 Background 103 4.2 The Beginning 104 4.3 Towards A New Relationship 105 4.4 Major phases of The Relationship 111 4.5 First Phase: 1962-1971 111 4.6 Second Phase: 1972-1979 113 4.7 Third Phase: 1980-1989 115 4.8 Fourth Phase: 1990-2001 116 4.9 Fifth Phase: 2001-2011 (Post 9/11 Period) 117

4.10 Sixth Phase: 2011-2012 118 4.11 Economic Development, Industrialization and Trade 119 4.12 Defence and Security Cooperation 125 4.13 The Kashmir Problem 129 4.14 Terrorism 132 4.15 Humanitarian Assistance and Diplomatic Strides 136

Chapter-5

Prospects for New Phase Collaboration

5.1 Iran-Pakistan Gas Pipeline 138 5.2 Coal Reserves of Pakistan 140 5.3 Up-Grading The Karakoram Highway 142 5.4 Kashgar: A Special Economic Zone 143 5.5 Sino-Pak Mutual Interests 143 5.6 Terrorism and Sino Pak Co-operation 144 5.7 China-Pak Anti Terrorism cooperation & Local 153 Constancy 5.7.1 Views on Sino-Pak strategic relationship 153 5.7.2 China’s external investment, 2005-2011 154 5.7.3 World view of China 154 5.7.4 Terrorism and Dynamics of China-Pakistan-US 155

5.7.5 China’s Primary Security Concern Terrorism 155 5.7.6 China’s Approach Towards Extremism 156 5.7.7 ETIM Proliferation 157

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5.7.8 Development of Underdeveloped Chinese Western 157 Regions 5.7.9 Global and Regional Insight On Sino-Pak Counter 158 Terrorism Collaboration 5.7.10 Balancing Sino-Pak Anti-terrorism Perception 158 5.7.11 Conclusion and Suggestions 159

Chapter 6

Future Aspects of Sino-Pak Trade Relations

6.1 China As The Emerging Market 161 6.2 Yuan Going From Strength to Strength 163 6.3 Lack of Trade Ties With China 164 6.4 Pak-China Expanding Energy Co-operation 168 6.4.1 Diamir-Bhasha Dam 169 6.4.2 Neelum-Jehlum Hydro Project (NJHP) 171 6.4.3 Kohala Hydro Power Project 171 6.5 Strategic conventional Militiary co-operation 174 6.6 Nuclear co-operation 176 6.7 Other areas of strategic co-operation 177 6.8 Present situation & future course 178 6.9 China-Pakistan Economic Corridor (CPEC) 181 6.9.1 History of CPEC 181 6.9.2 Agreement of CPEC 184 6.9.3 Early Harvest Programmes of CPEC Project 184 6.9.4 Alternate Route to Central Asia 185

Chapter- 7

Conclusion

7.1 Financial Development a Primary Focus 189 7.2 Experimentation as a Tool for Policy and Institutional 192 Innovation 7.3 Cross Pollination Through Transfers and Inter-System 193 Aid and Support 7.4 Performance measurements as a Management Tool 193 7.5 Decentralization as a Tool for Fast Growth 194 7.6 Efficient (De-Facto) Financial Federalism 195 7.7 Comparison of China’s FTA with Pakistan & ASEAN 195

xviii

7.8 China Discover Pakistan an Open for Trade at Primary 198 Industrialized Fair 7.9 Trade Balance Tilts Further In Beijing’s Favour 199 7.10 Exports to Beijing are heavily concentrated in cotton and 200 rice 7.11 The new Silk Road and the Sea 201

7.12 Factors inhibiting Development in Trade and investment 203 co-operation

7.13 Suggestions to Improve Bilateral Trade Relations 204

Bibliography 209

xix

CHAPTER-1

Introduction

1.1 Introduction to Sino-Pak trade relations

The Sino-Pak trade relation is a distinctive affiliation. The two states have diverse community systems, dissimilar cultural background and ahurdle of language. Yet they have been able to prevail over all these troubles. We have surmounted the obstacle of Himalayas by construction the Karakorum Highway. At a standstill to build up actually people-to-people relations, the hurdle of language must also be wrecked. It is good to note that Pakistan has established affairs including the Urdu language. Where the Chinese are learning and studying Urdu for an extensive time, to learn Chinese in Pakistan, the Confuscious Institute was recognized here at the National University of Modern Languages (NUML) at Islamabad several years ago which is ongoing teaching Chinese to college level students? In current era the study of the China’s languages were moreover launched in the Roots School System and several other schools are following the model. Contravention the language obstacle will build this connection proliferate in the upcoming. (1.a)

Pakistan was a part of former British Colony. It emerged as an independent state of South Asian Muslims on August 14, 1947. China never became a formal colony of any foreign power. However, its territory was encroached upon by several Western Colonial Powers as well as by Japan and Russia after a hard struggle against foreign occupation and a bitter civil war, China regained control of the mainland and recognized as the People’s Republic of China on 1st October, 1949 under the control of Chairman Mao Ze Dong. Pakistan has renowned the ground- breaking People’s Republic on 4th January, 1950 and both states recognized authorized diplomatic relationships on 21st May, 1951.(1.b)

Previously in the period of sixty seven years China and Pakistan are being proficient to build a multi dimensional and wide-ranging strategic joint venture based on complete reciprocal interest. At the present question is about what the prospect holds. I will not make whichever predictions but as all of us bestow with intellect to make projection for the prospect on the basis of earlier period experience, current trends and the reality we face ahead of talking of where we can go mutually in future. It would be helpful to briefly summarize what the bothstates have achieved in the previous six and half decades and where do they set today.

1(a). Education and language: Common denominator for the youth of both contries, Chaudhary Faisal Mushtaq, 2005. 1(b). Sino-Pak bilateral trade statics 2010, Economic and commercial councelor’s office of Chinese Embassy to Pakistan, Mar 18th 2011.

In the foremost decade of 1950s, Pakistan strong-willed to fit into place in western military coalition because of Indian history and danger to its safety measures. China and India had built-up close relationships as “Bhai Bhai” (brothers). Sino-Pak relationships remained recognized and without much substance. Relationships can develop among nations only when there is joint convergence of advantage which these two countries experienced for the first time in 1960. By that occasion Pakistan is converted into disenchanted western alliance. In addition, India and China had drifted separately over the question Tibet and occurrence of the Dalai Lama in India. China had alsohurdles with her earlier collaborator, the then Soviet Union, and was already in conflict and experiencing anxiety with the U.S and her western partners. China needed an opportunity to the world and a new companion and so did Pakistan.So there was a junction of interests among the two neighbors and only one of its kind relationships among the two countries started.

In the 1960s, both the countries developed a closer relations.Both the countries signed numerous agreements such as an Air Service Agreement, a trade agreement, a Border Trade Agreement. Airline services were in progress in 1964 furthermore PIA developed into the initial foreign airline to fly to China in April, 1964 during the Indo-Pak war of 1965, China hadprovided Pakistan the entire probable assist and triumph the hearts of the Pakistani people and Sino-Pak relationships had developed into a heart to heart relationships between China and Pakistan.(1,c)

In the 1970 a number of significant improvements take rest;first, solemn problem was brew in Eastern Pakistan;second, Pakistan facilitates a connection between U.S and China. China and afterward Soviet Union had a boundary divergence in1969 and Nixon sought to finish the Vietnam War. Mao, the Chairman required a new opportunity moreover so did Kissinger’s top secret trip to China in July, 1971. As a consequence in 1971 China was capable to safe its rightfull position, with the assistance of Pakistan in the United Nations Security Council by liability this service to USA and China, Pakistan exasperated to soviet union and suffer a grim hinder as a result the Soviet Union sign a defence pack with India on august 9, 1971 and entirely support India to consign hostility in East Pakistan. Bangladesh turns into a truth parlty because of our own unsound policies and as well as of Indian’s hostility sponsored by the Soviet Union.

Ever since the middle of 1970 and beyond, China and Pakistan established severe defence collaboration which is in progress during 1966 after the Indo-Pakistan war of 1965. Since China considered in self dependence, it as well influenced Pakistan to construct the communications.

1(c) A Unique Partnership, China and Pakistan, Handbook of Pakistan-China Relationships, M Akram Zaki,2005.

So that Pakistan can make development towards self dependence. Numerous major projects have been started throughout the delayed 1970s as well as 80s which remains constant till the 1980s. These comprise the Karakoram highway which connected the two states, the Islamabad sports complex, the Guddu and Jamshoro thermal power projects, the cement factory at Daud Khail, the Heavy Forge and Foundry,the Heavy Mechanical Complex, the Aircraft Rebuild at Kamra, the Heavy Electrical Complex, the Oil Tanker for Pakistan Navy, the Rocket Propellant Plant, the Tank Rebuild Factory at Taxila, the Saindak Gold Copper Project in Balochistan, the Pakistan China Cement plant at Sikandarabad, and the Chashma nuclear power plant I, afterward suplemented by Chashma II,III AND IV. These are existing monuments of Pakistan-China relationships.(1.d)

As Pakistan facilitates China and United States rappprochement U.S- Pakistan relationship also got a momentum raising into broader political relationship.With the invasion ofSoviet Union in Afghanistan, both China and USA collaborate with Pakistan to keep away the Soviet Union hostility. In the meantime, the most significant change that takes place in China is that at the ending of 1978 and in the opening of 1979, China introduces a new-fangled guidelines of four modernization, transformation and opening outside the globe.

These Modernizations were constituted by Agriculture, Defence, Science, Technology and Industry. China doubles it’s GDP in the decade of the 1980s and redoubles it in the decade of 1990s, flattering a main financial influence.

By the fall down of the Soviet Union in 1991 one more essential growth take place. Besides of the reality that the U.S required the relationship of China in opposition to the Soviet Union previous, there was a swing in our strategy following the fall down of the Soviet Union. The USA claim that as a local domination, she had the highest power to modify the fortune of the world, China from end to end military far behind, took an ethical status of opposite Uni-Polar notion and a policy of domination and power policy. Chinesehad also iniatedstruggles for appraisal of a Multi-Polar global organization.

Later than resolve all boundary clashes with neighbors in Central-Asia, Chinese started collaboration in opposition to terror campaign, radicalism and division with all these states. Wherever it can not resolve the boundary conflict it still condensed anxiety as in the case of India and paying attention on financial negotiation. Economic relationships with India were extended by raising its control in India; China had played a very positive function to maintain harmony and solidity in the regions of South-Asia, as China required tranquility in the region of its neighborhood for its own development and economic development policy.

1(d) Talat Masood,China Pakistan co-operation in defence protection “Handbook of Pakistan-China relation” 2015:P94

In 1999 during the Kargil catastrophe and latter in 2001 and2002 when India’s military were rigorous on Pakistan’s boundary, China had played a very affirmative function in defusion of the circumstances. These two crises did not carry out of fraction, still to pay to China’s optimistic role.

With the ending of 21st century,Pakistan and China hadbeen developed what is called systematically convinced and reliable relationships, which in spite of all the transform in world politics and changes of govt in states, constant growth and adult. It is known as “all weather” and “time tested”, friendship, my sentiment is that it would prolong to develop in the future and will transmit from one age group to to the other age group.

During the 21st Century Sino-Pak relationships go through an important up- swing development, growth and extension. In 2001, main revels were structured on the 50th Anniversary of mutual relationships between the both states. Premiere Zhu Rongji came to Pakistan in May, 2001 and had started the progression of construction the Gwadar port, the Coastal Highway as well as development of Pakistan railway lines. Previously in 1998, when India had experienced its nuclear arms moreover Pakistan had also countered, the west-World had put numerous sanction/limitations on Pakistan however China’s collaboration with Pakistan remains constant. In reality this collaboration amplified owed to the Indian Defence Minister’s poorly considered comments that their chief opponent was China. Thus there was a new junction of attention connecting China and Pakistan.(1.e)

By Western non–participation, China becomes a chief actor in Pakistani financial growth. Pervaiz Musharraf the former President too made a visit to China instantly subsequent to Pakistan connected with the West, after 9/11. The leadership of China also affirmed Pakistan that they were fascinated in tranquility and solidity in the state and was dedicated to defense of Pakistani autonomy and regional dignity. Pakistan conventional attitude about one China, i.e. Taiwan and each other self-sufficient region being a central fraction of China was reiterate. Both the states decided to collaborate against terror, radicalism and autonomy.

The 55th anniversaryin 2006, of mutual relationships was pragmatic. There were two trips by the President of Pakistani and one trip by the Chinese President. A number of agreements were signed during the visit of President of Pakistan to China. Three of which agreements were extremely prominent:

1. Framework Agreement on Defence Cooperation. 2. Framework Agreement on Energy Sector Cooperation. 3. Framework Agreement on financial, economic and commercial cooperation’s.

1(e) Andrew small the China-pakistan axis,Asia’s new geo politics,2015.P-147.

One more incredibly important document, which was also signed during this visit of President of China to Pakistan in December 2016, is a five year widespread agenda of collaboration in all sectors. This the major document, concerning over collaboration in all significant areas, as well as communication, energy, agriculture, banking,defence, economy, trade, culture and youth relationships etc.

The Free Trade agreement was also sign and implement in two stages, initial with a privileged treatment and after that an early yield project. The Sino-Pak mutual investment corporation was formed with an early principal of $ 200 million. Chinese Government granted to construct Sino-Pak relationship center to encourage cultural activities and youth dealings which was afterward started during the trip of China’s Prime Minister Wen Jiabao in 2010. The China’s Prime Minister as well announcedas the year 2011 will be experiential same as the year of comradeship to smudge the 60th Anniversary of the completion of mutual relations between Pakistan and China.

Asif Ali Zardari the President of Pakistan, also made visits to China six times and signed numerous agreements. He and the Prime Minister of China granted during his first visit that they would make two committees, one headed by the Pakistani President and the other by the Chinese premiere, which will guarantee the execution of the agreement. These committees were established and had been operational for the previous three years. Compare to the Kirry Logar Bill which was extremely revealed in the media for its yearly one and half billion dollar to Pakistan, of which partially is for managerial fixed cost, Chinese Investment in Pakistan cultivate at this time is value of $ 22 billion; Chinese 13000 engineers and employees are working in Pakistan on 120 different projects; these projects have been valued at $ 18 billion; projects which have completed for upcoming growth are equivalent in cost of $ 25 billion.(1.f)

During the 21st century, China and Pakistan apprehended unique celebrations on the 50th, 55th, 60th, 65th and 70th Anniversaries of the accomplishment of bilateral trade relations to the appraisal and enlarge joint collaboration. This experience is liable to be continuous in the upcoming.

China has been emerging as the 2nd principal economist in the globe by overtaking each country without the USA. China is the state with biggest overseas exchange reserves, which meant that resources are obtainable for investment. It can be predictable that earlier than the ending of the decade (2020), China is expected to be emerged as the super power of economy Worldwide. China is too making openhanded donations for growth of Third-World states including Pakistan.

1(f). Fazal ur Rehman, ‘prospects of Pakistan becoming a Trade and Energy corridor for china’, Strategic studies,vol.xxvii,No.2, summer 2007. 5

The hallucination for the prospect is that Karakorum Highway and Gawadar Port ought to be connected and Pakistan should be the trade and energy corridor to the Middle-Eastern and gone from, pro China. The ocean path through which Middle-Eastern energy reach China is to become susceptible, for the reason that of the rising power of the Indian Navy and the American Navay being there in the area. Pakistan offers the secure and small land course for the energy flow from Gwadar to China and further trade between China and the Middle-East. This would also be useful in the economic incorporation of the two states.

Existing projects including the up-gradation of Karakorum Highway (phase 2) Raikot to Islamabad (487KMs) with price tag of Rs 379 billion will be finished by end of 2017. The China Three Gorges Cooperation (CTGC) have been in Pakistan, apprehended meticulous debate and propose to empower up to 10 billion in Pakistan water reserve expansion. If this matures timely, there will be marvelous collaboration consequential prosperous Pakistan.

1.2 RESEARCH QUESTIONS

Following are the questions which are examined in my research: a). Are the new projects with considerable Chinese investment practicable? b). Are free trade areas for the abolition of import tariff on vast no of things of export benefit to each other will be advantageous for both countries? c). Should both countries develop some new quality standards in trades? d). Does Pakistan need more investment in telecommunication sectors from China? e). What type of Chinese automobiles will be accepted in Pakistani markets? f). Should China invests in energy sector of Pakistan? g). Could Pakistan China economic relations expand defence relations? h). Should both countries find some other areas to improve the economic relations?

1.3 JUSTIFICATIONS

Pakistan is amongst forefront to establish close relationships with China. Constantly gratefulness of the recently established People’s Republic of China by Pakistan in 1950, trade relationships between the both states cultivate untiringly. The collaboration has centered a novel phase in recent years with strengthening and widening cooperation in multiple guidelines for illustration, Infrastructure enlargement, Defence, Telecommunication, Construction and Energy sectors. The cooperation between the both states could be enhanced by assuming wide-ranging integrated preparation, improving connotation, machinery, using market based approach etc. 6

Through responsibility so it is projected that the current level of common trade of US $ 8 billion between the states will reach upto the position of US $ 15 billion by 2010.

The manifestation of China as a global economic supremacy must be viewed the similar as a resource of power of Sino-Pak trade relations. Sino-Pak trade collaboration appears to have entered a novel phase wherever project of neighboring import are also being urbanized (e.g. oil-gas pipe line, fore nation transit and trade agreements, railway link). The territoral magnitude must also be agreed unpaid deliberation to formulate program.

In adding togetherabove, collaboration in above areas for instance Computers, Electronics and Telecommunications, collaboration in human resource development, out sourcing and subcontract by Chin’s to Pakistani firms, looking for mutual edifice contracts in third states etc may as well be explored. We have to come across the opportunity of them.

1.4 Methodology

The data have been composed from primary as well as the secondary sources. Main data have been composed through the questionair. The respondents may be consumer of the product, exporters, indenter, custom official, custom clearance and forwarding agents etc.While the secondary data was collect from economic survey of Pakistan, State Bank of Pakistan, Federal Bureau of Statistics

Pakistan, Stock Exchange of Karachi, Ministry of Foreign Affairs, China export data, National Bureau of statistics China, Ministry of Commerce Peoples Republic of China, different trade unions,Customs, different trade journals etc.

1.4.1 Theoretical Framework

The study has applied traditional and systematic theory for examing the progressional nature, capacity and prospect relations between China andPakistan. The traditional theory or customary theory makes eloquent analysis of global relations. According to Hedley Ball the customary approach be “The approach to theorize that had been derived from the history, philosophy and law that is characterize over by unambiguous dependence upon the work out of the decision and by the assumption that if we incarcerate ourselves to stringent principles by confirmation and evidence there is extremely modest of worth that can be alleged about global relationships universal proposition cannot be accorded something more than the faltering and comprehensive position suitable to their uncertain foundation”.

Systematic approach laid extra importance on the method of study relatively than the subject material.The history had been surveyed and deliberated by giving 7

report essentials and making assumption base on the determinants of relationship of China and Pakistan.

The study intended at inquiring two dissimilar aspects of nature of global relationships after Cold War.It debate the amendment occur in the GlobalPolitical circumstances and response of China and Pakistan to such amendment.In addition it survives the chronological development of the relationships by unfolding facts and figures on the special challenge. Further more, the study has also evaluated at span the mode which comprise subsequent to cold war and how it exaggerated Sino- Pak relationships.

It have been concluded that Pakistan gained extra concentration in Chinese South-Asian Policy is the consequences of 9/11 events than any other south Asian country. Andrew Small in his book entitled “the China–Pakistan axis” Asia’s new geopolitics had confirmed that China and U.S have general interests in the area is one that China had been glad adequate to recite with no actually believe to be true.

Both surfaces agreed that “stability” be good quality and “terrorism” was terrible.(1) With the exception of ETIM and its supporters, Beijing’s interest was not to embroil itself in a war with extremist in the region. “Stability” in Afghanistan was not especially appealing to Chinese either, if just meent a stable environment for the United States to entrench the military presence.(2)

The investigator partially accepted the above concept that 9/11 happening brought Pakistan as a major performer of Chinese foreign policy in South-Asia.In December, 1979 while the ex- communist super power has landed its military in Afghanistan, Pakistan was emerging as a front line country and main performer of defending curiosity of western states as well as China in the constituency close tothe Persian-Gulf which is critical to ensure.

Constant oil supply to them the nuclear blast by India and Pakistan in 1998 accomplished Chinese policy makes to contemplate their labors on probable infringement of nuclear conflict.

Though Chinese anxiety subsequent to May 1998 atomic explosion in South- Asia and its vehelment support to resolve troubles of Kashmir quietly will keep it vigorously betrothed in the political circumstances of the Pakistan.

China and Pakistanhas been entered into trade relationshipsin the early hours of 1950’s, although an official trade Agreement had been signed in January, 1963 afterward in October 1982, both the countries identify the China- Pakistan common board on Trade, Technology and Economy. Trade between Pakistan and

1. Andrew small the China-Pakistan axis, Asia’s new geo politics, 2015. P-147. 2. Bass, The Blood telegram, P-308. 8

China has been carried out through the Trade Agreement (1963), by which both countries had been approved Most Favored Nation (MFN) status to each other.

During the early stage of trade relationships, Pakistan had used manyfold trade with China e.g. Cash trade and barter trade. Sini-pak trade volume till 2000 remained below US$ 1 billion and the trade balance persistently in the favor of China.

The Sino-Pak economic bond has been substantially enhanced exemplified by the record of US $ 8.667 billion bilateral trade in 2010, which is an impressive 27.7% year on year growth.

China exports US $ 6.938 billion to Pakistan and imports US $ 1.729 billion Chinese enterprises signed constructing contracts value of all years reaching US $ 19.87 billion till 2010 China had invested US $ 1.367 billion in Pakistan and has received US $ 57.38 million FDI from Pakistan.(3)

Director of centre for South AsianWest China cooperation and development, Chengdu professor Xie Daigang, while analyzing the state of Pakistan-China investment relations writes “the scale of investment is too small China has invested US $ 59 billion abroad in 2010, but only US $ 26.09 million in Pakistan, accounting for 0.04 percent Pakistan’s investment in China is US $ 5.70 million, accounting for 0.0045 percent of total FDI inChina, which is almost negligible.(4)By the end of 2010, China’s total overseas investment has accumulated to US $ 258.8 billion and total investment in Pakistan has been US $ 1.367 billion, accounting for early 0.53 percent.(5)

The research elaborates that Pakistan is preparing to provide as a Trade and Energy Corridor (TEC) for China.There are several components of this concept in terms of creating infrastructural connectivity:

Gwadar deep sea port has become operational work on up gradation of KKH is progressing and the feasibilities for establishing railway link, gas pipe line, oil refining and storage facilities are under preparation. China and Pakistan want to augment harmonization in the sketch of Shanghai Cooperation Organization (SCO) and South Asian Association for Regional Cooperation (SAARC).

The evaluation of 70 years of Trade and bilateral relations between China and Pakistan reveal that the challenge to Pakistan-China trade relationships could be efficiently meet with fortitude and mutual efforts.China and Pakistan have

3. Sino-Pak bilateral trade statistics 2010, Economic and commercial counselor’s office of Chinese Embassy to Pakistan, Mar 18th 2011. 4. Board of investment, Government of Pakistan, http//www.pakboi.gov.pk 5. Xie Daigang, OPcit. 9

approved to carry out a joint reading to eradicate hurdles in bilateral trade development. This learning will workout an inclusive projectin favor of consequently five years to expand the degree of trade. In November 2011, both the countries decided to give a five-year-extension to the expansion Program on Trade and Economic collaboration from 2012 to 2016, thus drawing up the blue print for the future.

The economic rise of China in our neighborhood is historic opportunity for Pakistan to achieve development of a fast pace by creating substances and workable mechanism for economic cooperation.(6)

1.4.2 Aims & Objectives

The objective of the study is to cover the various aspects of trade relations between Pakistan and China. It will create platform for further researches to conduct more research on the subject.

Further aims and objectives of the study are enlisted as under:

1. Find the investments opportunities on electronics, computers and telecommunication sectors. 2. Find the falliabilities on outsourcing and associate astringent by Chinese to Pakistan firms. 3. Looking for joint construction contract among third world countries. 4. Enhancing joint research programsand technology cooperation. 5. Cooperation in human resource development. 6. Raise efficiency, competitivenessand and quality of their products and services to enter in worldwide markets. 7. The prospeets of new phase collaboration. 8. Adopting long term integrated planning. 9. Developing implementation mechanism. 10. Enhancing regional context of collaboration.

1.4.3 Hypothesis

Following are the hypothesis will be examined in my research:

1. Chinese political support for Pakistani initiativesdirected against India including those regarding Kashmir. 2. Frequent high level exchanges of civil leaders. 3. Chinese support for expansion of Pakistan’s regional skills.

6. Pakistan-China friendship Embracing the future, BY Chinese Ambassasdor to Pakistan, Liu Jian, DailyTIMES, January 10, 2012. 10

1.5 Organization of the Thesis

The thesis comprises of 7 Chapters.The first Chapter “Introduction” discusses research questions, provides justification, explores theoretical framework, outlines methodology and describes plan of thesis.Chapter II entitled past Pakistan- China trade and economic relationships explores the history of Pak-China economic relations such as, Air Transport Agreement (1959) follow the inagural flight of PIA to Shanghai in April 1964,Border Trade Agreement (1963) facilitating trade across border of Northern areas of Pakistan and Xingjian of China, Bilateral Trade Agreement (1963) giving MFN position to Mutual Trade, setting up of Pak China commission on economic, Karakorum Highwayconstruction,trade and technology (1982), building of Saindak (Balochistan) incorporated mineral project, construction Chashma nuclear power plant with Chinese collaboration.Chapter III “Current Areas of Cooperation” aims to understand the investments of China at present which includes Investment, Trade and Transit, Communications, Telecommunication sectors, Automobiles, Energy Construction and Defence production i.e. JF 17 Thunder,Super 7 fighter as known as CF-I for Pakistan air force, Frigates for Pakistan navy,. Chapter IVnamed as “Emerging Global and National scenario” comprises on bilateral relations, in this chapter it has been explored that the past cooperationhad developed in a different environment then existing now. Pakistan has also invigorated an elevated development path (6-7% GDP growth) in current years with liberalization of trade and attracting foreign direct investment.The worldwide economy subjugated by developed North, is once again facing increasing challenges after a decade of persistent expansion following the Asian financial disaster of 1979.

Chapter Vnamely “Prospects for New Phase Collaboration”engage in exploring the prospective collaboration in the areas such as Computers, electronics,Enhancing technology cooperation and mutual research programs, Telecommunications, Seeking joint third contracts in third world countries, cooperation in human resource development, raise efficiency, quality and competitiveness of their goods and services to pierce in worldwide markets.

Chapter VI“Future of Sino Pak economic relations” strategic partnership, ellaborates the significance of Gwadar Iran-Pakistan gas pipeline, up gradation of Karakorum highway, renewable energy projects, khunjarab railway line construction China-Pakistan joint cotton Bio-Tech laboratory construction project financing, Geopolitical impact, security, China-Pakistan Economic Corridor elaborates the route and significance of the different projects included in CPEC. Chapter VII, details the conclusion of the thesis.

Chapter-2

Past Pak–China Economic Relations

2.1 History of Pak-China Trade Relations

Pakistan and Chinahave started the Trade relation in the early 1950’s but anofficial trade concordwas signed in January, 1963.Later in October 1982,both thestatesestablished the Sino-Pak combinedcommittees onTechnology,Economy and Trade.Trade between Pakistan and China has usually been carried from beginning to end via the trade agreement which was signed in 1963,through which both states had beengranted Most Favored Nation (MFN) status to each other, all the early stage of trade relationshipPakistan used Manyfold trade with China such asbarter trade and cash trade. Sino-Pak entire trade volume upto 2000, remainlower US$1 billion and the trade balance steadily in support of China.

Usually the trade equilibrium has all the time been in favor of Chinaexcepting in 1952,due to China’s participation in theKorea’sconflict, Pakistan not merelyrefrainfrom poll vote on the United Nationsaffirmationproposed at inspiring aconstraint on the export of certain provisions to North Korea and China, but as wellcontinued its trade relations with the preceding. At that time Pakistan was looking for consumer of its unprocessedsubstance,yarn and dealers of petroleum.Pakistanisell to other countrieslikeChina in 1952 arrive upto US $ 83.8 millions and trade in from Chinabeonly US $ 2.2 millions.At thetruce in Korea’sWar, reciprocal trade indexrapidtwistdownward for decade’sChinesesturdylift up in exports to Pakistan outcome in aninvariable and uncontrollably trade discrepancy.The chiefsubstances of Pakistaniimport from Chinaincluded Sugar, machinery and Parts, Chemical Elements, Iron and Steel Products, Mechanical, Chemical Materials, and Pharmaceutical products.The mainitems of Pakistaniexport to Chinaincludedyarn, cotton wool,petroleum and its products,leather, fish and its preparations, vegetables and fruits.Unfortunately the diversity of Pakistanisupplies exported to China is extremelysmall.About 80% of its sell overseas consists of yarn,cloth and it is fear that such exports willdecreaseconsiderably in future for the reason that of the initiative undertaken by China to reorganize its textile manufacturing the table below shows that while there is constant increase in the whole volume of trade and Chinese exports to China are not rising in a noteworthyway which could assist in plummeting the trade in balance between the two states.

Table-1 Sino-Pakistan Trade2001-2010 (100mm USD)

Year Total Increase % Import from Increase % Export Increase Value China % 2001 14.00 20.0 8.20 22.0 5.80 18.0 2002 18.00 29.0 12.40 52.0 5.60 -4.0 2003 24.30 35.0 18.50 49.0 5.80 4.0 2004 30.60 26.0 24.60 33.0 6.00 4.0 2005 42.60 39.0 34.30 39.0 8.30 40.0 2006 52.50 23.0 42.40 24.0 10.10 21.0 2007 65.40 25.0 54.30 28.0 11.10 9.7 2008 69.80 7.0 59.80 10.0 10.10 -9.0 2009 67.80 -3.0% 55.20 -8.0 12.60 25.0 2010 86.67 27.7% 69.385 25.5 17.29 37.0

Xie daiging ‘prospects of Sino-Pakistan economic cooperation data from ministry of economic China proceeding of the conference 60 years of PakChina relations: landmarks trends and approaches held on April 10 -11-2011, published by institute of policy studies, Islamabad,2012.

2.2 Air Transportation Agreement between China & Pakistan (29th August, 1963, Source: CAAC)

Air transportation agreement between the government of the People’s Republic of China and the Government of Pakistan,has been documentedfor the aim of Air services amid and away fromboth countries, the articles of the agreement are given below:

Article-1 (A) (i) The specified route of the air services and schedule between both the contracting parties and the right to operate on the scheduled air services in the agreement referred to as “the specified route”.

(ii) The course and schedule specified above mean air services on the specifiedroute, to carry on the courseglobal passengers, cargo, baggage, and mail traffic between the territorial dominions ofboth Contracting Parties and that of third country.

(B) In regard of the dignity and territorial integrity of both the contracting parties the points for entry and exit across the boundary of the contracting parties and the safe air space within the terrain of both the Contracting Partiesshall be prescribed.

(C) For the safe operation of air services designated airports to be used by both the contracting parties and appropriate alternate airports shall also be designated for the specified routes. 13

(D) For the safe operation of the specified route each contracting party will be responsible for the provision of communications, navigational and other supplementary services in its territorial dominions.

(E) The plane of the nominated airline of one contracting party is the function of the particular route may decide to overfly and eradicate any point or points in the mentioncourse.

Article-2

(A) The Government of Pakistan designated “Pakistan International Airlines (PIA) as its airline andthe “General Administration of Civil Aviation of China” for the Government of the People’s Republic of Chinaas its airline for the operation of each others specified routes.

(B) The Government or the citizens of the both contracting parties will have been vested the owenership and executive control of the airline nominated by both the contracting parties.

Article-3

(A) AeronauticalAuthorities will approve the schedule, frequency and type of aircraft for the operationof nominated routes by the consultation of the nominated airlines of both the contracting parties.

(B) The schedule and the inauguration of air servies shall be notified from eavch contracting party to other contracting party well in time sixty days advance.

Article-4

(A) The air lines will enjoy fair and equal opportunities and treatment of both the contracting in the operation of designated routes for the use of airports and route services. The services like communications, navigational, meteriological and other airport land services will uniformlyprovidesimilar as provide by both contracting parties to its own airline service.

(B) The designated airline of every contracting party will use civil aviation and radio services equally for transmission and communication regarding safe flight operation. English language will be agreed for the aeronautical Q code for oint to point telegraph and air-ground radio telegraph by both the contracting parties.

Article-5

(A) Both contracting parties agreed to change the tarif for cargo, baggage and passengers at a reasonable level on the specified designated routes including all factors of profit and tariffs of the other airlines. It will have the same low level tariffs on the common and equivalent route for the nominated airlines by each contracting party.

(B) The civil aviation Authorities will grant the minimum level of tariff on the particularroutebetween the nominated airlines to the other Contracting Party. If the minimum tariff level will not be agreed by thye Civil AviationAuthorities of both the contracting parties then they should endeavour the agreement between themselves.

Article-6

(A) (i) Both Contracting Parties will bound the designated airlines air craft to bear Nationality and registration marks as are specified in the international navigational system, radio station license, journey log book, airworthiness certificates, crewmembers list, passengers list, cargo manifest and mail. Crew members of both the contracting parties shall have a valid competency certificates and license issued by the contracting party to which they are belonging.

Article-7

The charges for the engage of the airports and navigational facilities for one contracting in the region of the second contracting party will not be barred the charges which are paid by its national airplane which is occupied in the similar service. These charges will communicate and obtainable to the other contracting party.

Article-8

The laws of the contracting party regionshould be implemented in which the aircraft of the designated airline of the the other contracting party exists, such as orders and regulations of entry and exit, operational and navigational rules of the territorial dominion of such the contracting party.

Article-9

(A) For the safe operation of the particular routes each contracting party will will cooperate with the nominated airline for the provision of of aviation fuel, 15

lubricants, oils and will made the surplus arrangements for the each supply. If this isunfeasible for one contracting party to make all these preparations thus the other contracting party to make all these arrangements thus the other contracting party will make arrangements to ship fuel, oils and lubricants which are compulsory.

(B) Security measures will be made by each Contracting Party for safe guarding of aviation fuel, the aircraft, lubricants, oils and other valuable properties as are extended by own airline. Article-10

During the flight of the aiorcraft of the nominated airlines of the one contracting party will be exempted from inspection fees, custom duties or similar duty charges in the terrain of the second contracting party equipments, aviation fuel, oils, lubricants, spare parts and airplane stores which are onboard and used during the maneuver flight. The exempted supplies can only be unloaded after the approval of the custom authorities of the other contracting party and will be under the control of such custom authorities till the time of reloaded to the aircraft of the designated airline.

Article-11

The nominated airline of the contracting party will be approved the right to stay its staff and representations on the particular routes in the territorial dominion of the other contracting party and staff will be citizans of the first contracting party apart from which are locally working.

Article-12

The designated airlines of both the contracting parties shall be permited in the territory of each contracting party for exchange of Pound, Sterling and transfer of excess revenue at the official rates which are inforce within the terrain of both the contracting parties.

Article-13

The Civil Aeronautical Authorities and the designated airlines of the contracting party have to maintain the close co-action for the ensurance of the principles and execution of the agreement.

Article-14

For the fulfillment and promptly provision of supply of the designated airline of each contracting party will be the entirely responsibility of both the contracting parties and is the requirement of the agreement.

Article-15

If one contracting party or the nominated airline fails to complaince for the stipulation of the agreement, the other contracting party will have the right to grasp the exercise as mention in the agreement. This act would be implementing only after the discussion between both the contracting parties.

Article-16

Each contracting party shall be a separate agreement regarding the matters of tariffs, frequency, schedule, rendering services and carriage sales representation condition.

Article-17

Each Contracting Party will provide all the facilities regarding technical, search and rescue in the territorial dominion its control and provision of assistance which is required by the designated airline in the air service route.

Article-18

If one contracting party desires to amend the agreement then it will request to the other contracting party for the consultations. These consultations will be made effective within the sixty days of the request date. New provision will be implemented after the mutually agreement between both the countries.

Full Power of the agreement:

The Air Transportation Agreement betweenthe People’s Republic of China and the Pakistan anddesignateda Fit person who invests the full power and ability to sign on behalf of the above mention countries.

Therefore it was certified by thepresident of Pakistan, Field Marshal Mohammad Ayub Khan that Hammeedudin Ahmed is hereby appointed as the representative forn this agreement having all the powers and Authorities to sign on the behalf of Pakistan.

While on the other hand Mr Shen Tu was given the full powers to sign the agreementon the behalf of People’s Republic of China.

This agreement was signed at Karachi on 29th August, 1963 in Duplicate in English and Chinese language which isuniformlyvalid.

Shen Tu: For and on the behalf of the Government of thePeople’s Republic ofChina. And Mr Huameeduddin Ahmed:For and on the behalf of the Government of thePakistan

Schedule:

(A) The nominated airline routes of the Government of People’s Republic of China will be as starting a point at China via or not via third countries to Karachi, Daccaor Lahore in Pakistan and away from to third countries.

(B) The route of Pakistannominated airline should be from Pakistan via or not via third countries to Shanghai at China and Canton and away from to the third countries.

2.3 Boundary Agreement between Pakistan and China, 2 March 1963

The Government of the People’s Republic of China and The Government of Pakistan hadgranted, with a hallucination to pledge the availableharmony and synchronization on the border to formallydraft the borders and differentiate the borders between Chinese Sinkiang and the neighboringregion, the safety of which is under the actualcontrol of Pakistan, incourage of equality, mutualsympathetic, judiciousness, and commonalteration, and on the basis of the Ten values as eloquent in the Bandung meeting;

Being convinced that this could not only give full emergence to the wish of the People’s Republic of China and Pakistan for the development of excellenthospitable and friendly relations, but also look after Asian as well as world’sharmony;

Have resolute for this cause to stop the present Agreement and have approved as their respective plenipotentiaries the following;

Minister of Foreign Affairs for the Government of the People’s Republic of China: Chen Yi;

Minister of External Affairs: Zulfiqar Ali Bhutto, for the Government of Pakistan, Who, havecommonlyexamine their complete powers and create them to be in superior and outstanding form, have beenapprovedas under:

Article-I In view of the detail that the borderamid China’s Sinkiang and the neighboringarea the defence of which is under the realcontrol of Pakistan has not been formallysurrounded, both the parties agreed to separate it on the foundation of the conformistnormalborderrowjointly withnormalpeculiarity and in a strength of equal opportunity, combinedadvantage and welcomingpartnership.

Article-II

Solitary In accord with the codeexpound in Article I of the Agreement, both parties have locate, as follow, the organization of the entireboundarystripe between Chinese Sinkiang and the neighboringarea the defence of which is under the real control of Pakistan:

(1) Commencement from its North-Westborder at elevation 5630 meters (a climax, the orientationadminister of which are almost longitude 74 degree 34 minutes £ and latitude of 37 degree 03 minutes N), the boundaryline uplopegenerally eastward and then southward brutallyall along the key water-shed amid the tributary of the Hunza River of the Indus River system and the tributary of the Tashkurgan River of the Tarim River System on the other hand, momentaryfrom side to side the Kilik Daban (Dawan), the Kharchanai Daban (named on the Chinese map only), the Parpik Pass (named on the Pakistan map only), the Mintaka Daban (Pass), and reaches the Khunjerab (Yutr) Daban (Pass).

(2) Subsequent to the Khunjerab (Yutr) Daban (pass) the boundaryline uplopeusuallySouth-ward all along the above mentioncenterpartitionequal to a mountainto daban (pass) in the South, wherever it foliage the centreseparation to track the climax of a promptdishonestusually in a South- Easternapproach, which is the separationamid the Akiliga River (a unknownanalogous river on the Pakistan map) on this side, and the Keliman Su (oprang Jilga) and the Taghumbash (oprang) River on the second side. According to the diagram of the China’s side, the boundaryline up after separation the south-eastboundary of this spurrunningall along a minutepart of the centercolumn of the divan of the Kelechin Su to achieve its convergence with the Kelechin River. The boundaryline up after parting the south-eastern border of this spur, according to the drawing of the Pakistani side map,, arrived at the pointedcurvature of the Muztagh River or Shaksgam.

Minutes E and leeway 36 degree 26 minutes N) with the shorbulak Daria (Braldu River or Shimshal River).

(4) From the junction of the aforementionedboth rivers, the boundaryrow, according to the amp of the China’s side, ascend the pinnacle of a spur and scuttlethe length of it to link the Karakoram Range majorseparation at a mountain (orientationcoordinatea propos latitude 36 degrees 15 minutes N and longitude 75 degree 54 minutes E), which on this diagram is exposed as belong to the Shorbulak Mount. According to the map of the Pakistani side,the boundaryline up from the junction of the overmention two rivers ascends the pinnacle of a analogous spur and lopeall along it, momentarythroughout Height 6520 meter (21,390 feet) till it links the Karakoram Range majorseparation at a climax (positioncoordinatesabout longitude 75 degree 57 minutes E and leeway 36 degree 03 minutes N).

(5) Therefore, the boundaryline up, consecutivelyusuallySouth-ward and after thatEast-ward, resolutelyfollow Karakoram Range majorseparation which divides the Tarim River drain method from the Indus River drainscheme, transitorynonetheless the East Mustagh (K2) the peak of the broadclimax, the pinnacle of the Gasher-brum mount (8068), the top of the Teram Kangri climax, the Indirakoli pass (named on the China’sdrawing only) and arrived at its South-Easteboundary at the Karakoram Range.

The organization of the entireboundaryline up, as explained in partone of the Article, have been haggard on the 1/1 million scale chart of the China’spart in China and the 1/1 million scale chart of the Pakistaniregion in English, which wassigned and emotionally involved to the presentconcord.

Within the reality that the map of the bothregions are not fullky matching in their revelation of topographical characteristics, both parties haddetermined that the actual characteristics on the ground shall triumph, consequentlydistant so the location and organization of the boundaryexplained in segment one is apprehensive; and that they resolvedstrong-minded as far as probable by combinedreview on the position

Article-III

Both the parties have beenapproved that; 1-Where on earth the border follows a river, the middleline upof the divan shall be the boundaryrow; that 2. Where on earth the boundaryexceeds through a daban (pass), the water separationcolumn thereof shall be the boundaryline up.

Article-IV Both the parties have beenapproved to set up, as soon as probable, a jointborderseparation commission. Every part will allocate a chairman, one or more members and anexplicitfigure of advisers and scientificemployees. The jointboundaryseparation commission is stimulating with the liability, in agreement with the necessities of the current Agreement, to graspharddiscussions on and take out subsequenterrandsjointly:

(1) To take outessentialsurvey of the boundaryregion on the land, as affirmed in Article-II of the current agreement, consequently as to put up boundarymarker at spacesmeasured to be appropriated by both the parties and to outline the boundaryline up on the mutuallyorganizedaccuratemap.

(2) To sketch a code of behaviorsituationonward in detail the organization of the wholeboundaryrow and the location of the entire the bordermarker and put up and findon paperwide-rangingmap, to be attached to the code of behavior, with the boundaryrow and the position of the bordermarkerrevealed on them.

Consequently the above talk aboutset of rules, the errands of the combinedboundaryseparation commission shall be ended.

Article-V

Both the parties have been determined that any conflictlinking to the border which may happen after the delimitation of the boundaryrowreallyobtainable between both the states shall be establishedserenely by the two countries through welcomingdiscussions.

Article-VI

Both the parties have beendetermined that after the end of the Kashmir conflict between India and Pakistan, the autonomouspowerapprehensive will restorenegotiations with the Govt of the People’s Republic of China on the border, consequently as to sign a officialborderagreement to substitute the currentcontract, providedso as to, in the occurrence of that autonomouspower being Pakistan, the requirements of the currentcontract and of the aforesaidcode of behavior shall be uphold in the authorizedborderagreement to be signed amid the Pakistan and People’s Republic of China.

Article-VII

The presentcontract shall come up toinforce on the date of its signature. It was prepared inreplicaat Peking on 2nd March, 1963, in the English and Chinese language, which are to beuniformlyvalid.

2.4 Border Trade Agreement (1963)

(Smooth the development ofdeal across Xingjian province of China and edge of Northern Pakistani Areas)

The Government of People’s Republic of China and of Pakistanapproved, with vision by guarantee to triumphharmony on the boundary, to officially democrate the borderamidChineseSinkiang and regionswhich were under the power of Pakistan.In a strength ofreasonableness, fairness, mutual accommodation and mutual understandingon the base of the ten ethicsitemized in the Bandung meeting, being persuaded would not merelyprovided the full appearance to the desire of Pakistan and the People’s of China for the organization of excellenthospitable and welcomingrelationships,but as wellassisted to defendWorld and Asiantranquility. For the aim of currentcontract tofinish the representators were assigned as under:

Chen Yi: Minister of Foreign Affairs for the Govt.of the People’s Republic of China. Mr Zulfikar Ali Bhutto: Ministerof External Affairs for the Govt. of Pakistan.

They had noted and examinedthat the entireis in constructivesuitablegood manners, and grantedgiven as under:

Article-1 Onanalysis of the reality that the boundaryamidChineseSinkiang and Contigious regions the safety of which is under the realpower of Pakistan has never been formely surrounded, both parties agreed to set the limits of the foundation of the customarynormalborderline uptogether with natural feature and in a strength of parity, mutual benefits and welcomingcollaboration.

Article-II Solitary In accord with the code expound in Article I of the Agreement, both parties have locate, as follow, the organization of the entire boundary stripe between Chinese Sinkiang and the neighboring area the defence of which is under the real control of Pakistan:

(1) Commencement from its North-West border at elevation 5630 meters (a climax, the orientation administer of which are almost longitude 74 degree 34 minutes £ and latitude of 37 degree 03 minutes N), the boundary line up lope generally eastward and then southward brutally all along the key water-shed amid the tributary of the Hunza River of the Indus River system and the tributary of the Tashkurgan River of the Tarim River System on the other hand, momentary from side to side the Kilik Daban (Dawan), the Kharchanai Daban (named on the Chinese map only), the Parpik Pass (named on the Pakistan map only), the Mintaka Daban (Pass), and reaches the Khunjerab (Yutr) Daban (Pass).

(2) Subsequent to the Khunjerab (Yutr) Daban (pass) the boundary line up lope usually South-ward all along the above mention center partition equal to a mountain to daban (pass) in the South, wherever it foliage the centre separation to track the climax of a prompt dishonest usually in a South- Eastern approach, which is the separation amid the Akiliga River (a unknown analogous river on the Pakistan map) on this side, and the Keliman Su (oprang Jilga) and the Taghumbash (oprang) River on the second side. According to the diagram of the China’s side, the boundary line up after separation the south-east boundary of this spur running all along a minute part of the center column of the divan of the Kelechin Su to achieve its convergence with the Kelechin River. The boundary line up after parting the south-eastern border of this spur, according to the drawing of the Pakistani side map,, arrived at the pointed curvature of the Muztagh River or Shaksgam .

(3) From the aforesaid point of view, the boundary line up lope up the Kelechin River (Muztagh River or Shaksgam) all along the middle row of its divan to its convergence (orientation coordinate regarding longitude 76 degree 02 Minutes E and leeway 36 degree 26 minutes N) with the shorbulak Daria (Braldu River or Shimshal River).

(4) From the junction of the aforementioned both rivers, the boundary row, according to the amp of the China’s side, ascend the pinnacle of a spur and scuttle the length of it to link the Karakoram Range major separation at a mountain (orientation coordinate a propos latitude 36 degrees 15 minutes N and longitude 75 degree 54 minutes E), which on this diagram is exposed as belong to the Shorbulak Mount. According to the map of the Pakistani side,the boundary line up from the junction of the over mention two rivers ascends the pinnacle of a analogous spur and lope all along it, momentary throughout Height 6520 meter (21,390 feet) till it links the Karakoram Range major separation at a climax (position coordinates about longitude 75 degree 57 minutes E and leeway 36 degree 03 minutes N).

(5) Therefore, the boundary line up, consecutively usually South-ward and after that East-ward, resolutely follow Karakoram Range major separation which divides the Tarim River drain method from the Indus River drain scheme, transitory nonetheless the East Mustagh (K2) the peak of the broad climax, the pinnacle of the Gasher-brum mount (8068), the top of the Teram Kangri climax, the Indirakoli pass (named on the China’s drawing only) and arrived at its South-Easte boundary at the Karakoram Range.

The organization of the entire boundary line up, as explained in part one of the Article, have been haggard on the 1/1 million scale chart of the China’s part in China and the 1/1 million scale chart of the Pakistani region in English, which was signed and emotionally involved to the present concord.

Within the reality that the map of the both regions are not fullky matching in their revelation of topographical characteristics, both parties had determined that the actual characteristics on the ground shall triumph, consequently distant so the location and organization of the boundary explained in segment one is apprehensive; and that they resolved strong-minded as far as probable by combined review on the position

Article-III

Both the parties have been approved that; 1- Where on earth the border follows a river, the middle line up of the divan shall be the boundary row; that 2. Where on earth the boundary exceeds through a daban (pass), the water separation column thereof shall be the boundary line up.

Article-IV

Both the parties have been approved to set up, as soon as probable, a joint border separation commission. Every part will allocate a chairman, one or more members and an explicit figure of advisers and scientific employees. The joint boundary separation commission is stimulating with the liability, in agreement with the necessities of the current Agreement, to grasp hard discussions on and take out subsequent errands jointly:

(1) To take out essential survey of the boundary region on the land, as affirmed in Article-II of the current agreement, consequently as to put up boundary marker at spaces measured to be appropriated by both the parties and to outline the boundary line up on the mutually organized accurate map.

(2) To sketch a code of behavior situation onward in detail the organization of the whole boundary row and the location of the entire the border marker and

put up and find on paper wide-ranging map, to be attached to the code of behavior, with the boundary row and the position of the border marker revealed on them.

The aforesaid set of regulations, upon being signed by the delegates of the Governments of both the countries, shall turn out to be an annex to the current agreement, and the complete map shall substitute the map attached to the current contract. Consequently the above talk about set of rules, the errands of the combined boundary separation commission shall be ended.

Article-V

Both the parties have been determined that any conflict linking to the border which may happen after the delimitation of the boundary row really obtainable between both the states shall be established serenely by the two countries through welcoming discussions.

Article-VI

Both the parties have been determined that after the end of the Kashmir conflict between India and Pakistan, the autonomous power apprehensive will restore negotiations with the Govt of the People’s Republic of China on the border, consequently as to sign a official border agreement to substitute the current contract, provided so as to, in the occurrence of that autonomous power being Pakistan, the requirements of the current contract and of the aforesaid code of behavior shall be uphold in the authorized border agreement to be signed amid the Pakistan and People’s Republic of China.

Article-VII

The present contract shall come up to inforce on the date of its signature. It was prepared in replica at Peking on 2nd March, 1963, in the English and Chinese language, which are to be uniformly valid.

2.5 Construction of Korakoram Highway (August 1970)

Therewas an immense gratification for opening up of Elevated Mountain for traffic leadglobal worldto cost which break throughthe formely far-flungregions.Not only have running-times and possessions of transporthad been strongduring the modernroad, but as welldeep-rootedgrowth in the mount hadbeen persuaded.Within this contex Sociopoliticaland Physiographical bordercircumstances are of leading importance for the setting up of purposefulmessagesystem.Particularly in the elevated mountaineousregion of Asia break, snow-covers in passes freezing activities, earthquake,and waterintensityvariations of riversat ford and limitedbuddingof fuel,foodstuff and provisionssubstancesprovide all limit the possibility for the expansion of major trade road.

Nevertheless furthersignificantbe the defense of the directions and the great effort for control in the mountainon top of slave trade and substitutepotential for positivepossessions which manipulate the budding and obstacle of the famousSilk Road.(1)

The entire factor which were dangerous in the arrangement of a trade multifacetedcovering the Pamir, Hindukush Karakorum,and Himalayan mountains in a wideextendcome within reach of;can only partiallyelucidate the hotextension of metalled infrastructure (table). Subsequent the decolonizing Indian Subcontinent there were preponderantly strategicreason in the wide Kashmir deviationregions for the enlargement of the communication arrangement: The point was to strengthendefensive claims duringarmedexistence and to pledge the supply of the garrisons. Repeatedly the difficultyof strengthening androute of the financialrelianceinside the regional circumstances, the Karakorum Highway (KKH) which is to be attached with the Hunza Valley in the Pakistani side, served as a (2) case study to imaginea digit of these features.

1. Herman 1910, 1915; Richtofen 1877. 2. This study was made possible through funds of the German research foundation (deuttssche forshungsgeminschaft). From Sep-Dec 1984 and from Mar-Nov 1985.

Table-2: The Metalled Trans-Mountaineous Road SystemintheHindukash,Himalaya andKarakoram.

S Name of Mountaineous Pass Altitude Lengt Period of NO Road s Ranges (in m) of pass h of construction/ (in m) road opening of (in roads (year) km) 1. Abbottabad- Karakoram/ Babusar 4173 420 1948-49 ( Gilgit ‘Kagan Himalaya route 2. Gilgit- Karakoram - - 210 1950-68 Skardu 3. Birjung- Himalaya Daman 221 1953-56 Kathmandu

‘Tribhuwan

Rajpath’

4. Yarkand- Himalaya Khitai 5341 1200 1956-57

Gartok 5. Kabul-Qizil Hindukush Salang 3600 406 1965 Qala ‘Salang Road’ 6. Karora- Karakoram/ Shangla 2150 248 1959-65 Chilas ‘Indus Himalaya valley Road’ 7. Thakot- Karakoram Khunjera 4600 1150 1964-78 Kashgar b ‘Karakoram Highway’ 8. Jammu- Himalaya Banihal 2196 330 1955-60 Srinagar

9. Srinagar-leh Himalaya Fatu La 5636 80 1980

10. Leh-Thoise Himalaya Khardun 5636 80 1980

g La 11. Khatmandu- Himalaya Zanglu 5481 500 1963-67 Xigaze ‘Arniko Highway’ 12. Kalimpong- Himalaya Natu La 4310 370 Xigaze

(Source: kreuezmamm 1978:38)

Trade in the newarea was entirelyillegitimate by merchants from “Down country”,(3)the collection of possessions consistsmainly of belongingssubstituteworthamongstSinkiang and India with smallsignificance to the populace of GilgitAgency who tradelittleamount of surplusconfinedwoolens and dried-fruits.

Nearby there was not a lonelysupermarket in Schomberg and Hunza in 1935at present are a littleamount of men in Hunza whohave enough money totake tea on meticulousproceedings.

At the end of the World War-IIpolicies for construction of a road suitable for motor vehicleconnectingIndia and SinKiang were talk about.The General Chiang Kai Shak hadstratagem by the plan of receivingsuppliesby way of the Karakorum in his exertionnext to Japanese professionservices and the Red Armies of Mao Zedong’sin the spam of one year, seventy thousand employeeand Army Staff weremade-up to build this highway by spring of, 1946. (4)This arrangement was not at allstill got happening (N.N 1951:81).

With the division of subcontinent of India the discrepancy of Kashmir between India and Pakistan happened.In these unresolvedconditions the population of the Karakorum instantaneouslyoptproPakistan.In the termination of violence line, the Kashmir wasconsequentialwhich scratch the main trade highway between Gilgitcivilization and Kashmir.Pending nowadays this line outlinedthe standing quoborderamongstPakistan’s Azad Kashmir and Indian Jammu and Kashmir. Pakistan hadrapidlydeveloped the Babusar roadconnecting the Kaghan valley and Chillas into a pathdrivable by jeep. (5)

The Kashghar to Khunjrab China’s fraction of KarakorumHighway (KKH)becauseit is recognized as at the presentaday was not endeduntil 1968.This unmetalled road, on 24 August, 1969, the main trade carvan used for two decades journey intoGilgit Municipality from Sinkiang.

Workingamid Thakot and Khunjrab bypass was irregularthroughout the secessionist conflict in Eastern Bengal in 1971 exclusive ofconsequently at once continuous.

TheKarakorumHighway during 1975 canbargain by trucks and additionalconservatory and metalling unrelenting until as the managerial opening ceremonial in 1978.

3. This term is used in colonial times to distinguish the in group of Hunzukuts and neighboring mountain people from the out group of Hindu ncivil servants and Kashmiri soldiers and traders who mostly profites from this activity. Nowadays the inhabitants of the northern Areas subsume the rest of Pakistan under the term ‘down country’. 4. IOL/P$S/12/4609:6-15

5. Completed in 1949, ef. The Times 22 June 1949.

Through the consequently five years overseasguests were prohibited in the Northern areas, to cover up the quantity of China’spaymentofprobablely 10,000 laborers and engineerssupporting the PakistaniArmy pioneerof the Frontier Works Organizations (FWO).(6)

Pakistan government abolishes the analogousbuilding of the KKH of the mirdoms of Karakorum and Hindukash.The Prime Minister Zulfiqar Ali Bhutto impoverished the local ChiefsRaja Mir, after thatof the roles of their home. The Transport conglomerateof the Northern Areas working in 1987 other than 315 personnelassistingconvey of general suppliesgoods and commonconvey into the Northern regionsas well as cater-cornered the border into Xinjiang.

2.5.1 Socio-Ecological Change in Hunza

Chinese and Pakistan Army personnel work together and completed the task of Karakoram Highway construction in enthusiastically aelf-sufficientely.

Their material was brought from the Northeren Areas and constractors from the local sources and labors were negligible. A social change occurred historically Silk Road by means of the G.T.Road (Calcutta- Delhi-Lahore-Peshawar) by means of Karakoram Highway in spite of the tacticalsurroundings of its undertaking.(7)

China and Pakistan has beenamplified the exchange of commodities in the currentdays and added up to 5% of Pakistanioverseas trade. Trade delegates had by the barter enterepreneurs and they got a lucrative business share. The goods by the private enterepreneurs and they got a lucrative business share. The goods which are offered by Pakistan includes leather goods, shoes, cotton, cloths, dried apricots, light footwear equipments and green tea from China. The exchange has been increased via Karakoram in the recent years but had not attained a high level growth rate of China-Pakistan trade.

It has been observed that the number of traffic is much less on KKH a, compared to the other roads of down country of same size. In 1981 a survey was conducted which gave the detail nof daily passengers on the different sectors.(8)

Economic distance has been shortened through btha Karakoram Highway between Northeren areas and down country dramatically and enables the administration, effective exeation and political control.Also lowered the rate of convey was decreased to current 35 Rs/maund (1 maund = 37.32 kg) intended for the space from Karimabad to Rawalpindi. By the commencing of KKH exchange relationshipsamid Gilgit and down country had been improved.

6. Chaudri 1978; Kamal 1979:19; Scholar 1980:77-8

7 The grand trunk road follows an older track of the Mughal period. Under the reign of Akbar the road system was well developed with a major truck connecting the densely populated agricultural regions of northern India. 8 Abbotabad – thakor 969; Thakot Gilgit 444, Gilgit-Hunza, 44 (Government of Pakistan 1983:17).

2.5.2 Extraction of Natural Resouces

In the earlier the mountains of mineral wealth (mainly Rubies) were belong to the individualtaking out it. While the Pakistan’sorganizationtakes over, managementassociation did the panorama and issue licences. Detection at all stage had been listed and put forward to “Gemstone Corporation of Pakistan Ltd” (which was established in 1979) by the twigheadquarters at Ruby and Aliabad excavation in Gilgit.

By the elimination of Mirdom is Hunza mobile group of maruts had been piercingadditionalNorth into the Hunza gorge.In these days they are full specialized gold-seller and prepared a littlelivelihood by pan the extremely fine gold powder out of the alluvial deposit of glacier liquefywater. The withdrawal of the other granitepossessionssimilar to marble near Khaiber and China clay in Murtazabad has been started but restrictionsowing to the decrease of electrical energy and reliance on the conservatory of connectedtransportation, as the figure of buyer of the commuditiesis being functioning the commerce at the Southendingnear Havelian of KarakorumHighway.

Though timber cutting had been limited in Nager and restricted at severalcheck-posts, the timber smuggling and firewood be flourished.The requirement have been raised to such level that timber is being brought by loading trucks in Karimabad from Chilas which is 220 km further South.(9)

Another valuable resource is the ice blocks formed through glaciers. Local people in summer scratch ice block from Minapin and Pisanglaciers and vend in the markets of Gilgit in Chitral and Swat, the similar practices are known from Bagrot.

2.6 Construction of Saindak (Balochistan) Integrated Mineral Project: In the late 1990s the Government of General Pervaiz Musharraf injected about Rs 1.3 million into the project to receive the project and later will be leased to Chinese company, Metallurgical Construction Cooperation (MCC) for the period of 10 years in 2002. A formel contract of worth $350 million was signed between

Pakistan and China for construction of Saindak copper gold project.In view of the contract Chinese company is bound to pay $500,000 per month to Pakistan for coming 10 years and 50% of mineral sale’s total revenue. A royalty of 0.7 million dollars every year will be given to the Government of Balochistan.

(9) Allan N.J.R.1984 ecological effects of land instsansification in the central and eastern hindukash; eichstattar beritrage 12, pp.193-211

Chagai district of Balochistan became famous all over the world due to vast reservoir of copper.Saindak project in Chagai contains an Ore reservoir of 412 million tons having an average 0.45%,0.50 gram gold each ton And 1.5 Gram silver each ton. According to a survey which states a report that Saindak copper bears a fine quality. It is reported that total 50,000 tons have been produced through the Saindak mine project since October 2003. Annual capacity of the project is to produce 15,800 ton blister containing copper 1.5 tons of gold and 2.8 tons silver.In 1970s, the reservoirs of district Chaghi at Saindak were discovered in collaboration with Chinese engineering company which has the aim to exploit the minerals of Balochistan.

The project of Saindak gold-copper was finalized by the Saindak Metals Ltd (SML), which was owned by the Government of Pakistan, wholly a public limited company at a cost of Rs 13.5 billion. The company was financed via Government of Pakistan guaranteed and investment borrowings in August 1995 to January 1996 the project were under trial, and have achieved the expected production level and quality.During total 1541 tons of blister copper was produced consisting of 12 kg gold and 198 kg silver and sold at a price of RS 280 million in the international market. In February 1996 the project withholds its functioning due to inadequate working capital.

Chinese are buyers and producers of the Saindak copper simultaneously.They have transferred technology mainly in copper and metal mining. They honestly trainedPakistanis and offered on job training.Abut 75% employers from Balochistan and up to 60% belonging to district Chaghi had been recruited in the Chinese companyfor resuming production in Saindak project furthermore, provision facilities such as education, health, drinking water, and other facilities to the employees is a mandatory part of project. The MCC was also responsible toexchange Chinese exports by Pakistanis, and accommodate the 700 ex employs who have lost their jobs withholding of the project.

These days Pakistani copper have a big market in China.In 2004 the export of copper started from Saindak about $ 30 million was exported to China within four months from July to October. The import of copper from Chagai is preferred by the Chinese companies, which have met their current requirements. Upto September 2004, 18,000 tons blister copper has been produced by MRDL, which is subsidiary of MCC. It has also been operated in the Saindak project, which invested initially about $ 26 million since August 2003.

2.6.1 Extraction of Zinc & Lead

In 2002 China and Pakistan have signed on understanding memorandum for exploration of Zinc and Lead,which have location at Duddhar in the Lasbella district

31 of Balochistan.This project is another historic symbol of Sino-Pak trade cooperation in the mining development at Balochistan. The production and construction of Lead-

Zinc plant will be installed via joint venture of the both friendly states. An estimated about 25,000 tons of ore will be manufactured, having chemicals Lead-Zinc basis to export and for the domestic use.(10)The Chinese companies have signed a contract few years ago to borrow $54 million as loan from the ChinaDevelopment Bank (CDB) financing the development of medium size Zinc and Lead mining at Balochistan.

According to the contract the consortium of the Chinese companies is bound for the construction, sales and operation of the project.The annual capacity of mining and concentrating of the project is about 660,000 tons. The mine will enhance its production upto 32,584 tons of concentrated lead and 100,354 tons of zinc concentrate each year.

2.6.2 Exploration of Gas & Oil

Balochistan is rich with gas and oil reservoirs and offered many opportunities to the investors from China.

In 2001 the Government of Pakistan has awarded a contract of $1 million to BGP, a Chinese Petroleum company to carry out a seismic survey of DaraBugti over an area of 178 km.The company holds the survey as the security situation was alarming. The company reported an assumed aerial and seismic survey in 2002.

Aslam Raisani the Chief Minister of Balochistan invited the national and foreign investors, and gave surety of their protection for the exploration of oil and gas in the province. Five national and international firms were issued NOCs to invest in gas and oil projects. The federal government also helped the province for exploration and development of the natural resources.

10) China Daily. “NBS: China accounts for 6% of world’s GDP in 2007.” October 27, 2008.

2.7Building Chashma Nuclear Plant with Chinese Collaboration:

In 2008 President General Pervez Musharraf visited China made wide-range talks with Hu-Jintao the President of China and WenJiabao the Premier and also made important discussions with the Chinese leaders.The leaders of both the countries agreed to develop co-operation in many areas and focus to bring Chinese investment for the improvement in the energy sector.The Chinese President and the visiting Pakistani President focused to accelerate cooperation in trade, energy and defence. China accepted to assist and cope with the evergrowing energy demand of Pakistan and both the leaders also made talks on the Nuclear energy cooperation.(11)

Now a day’s electricity generation is less expensive and reliable through Nuclear Power. SouthKorea generates electricity up to 40% through atomic power.

Nuclear Power generation is dangerous to human life and environment, from environmental protection point of view, the disposal of nuclear waste is a separate alarming problem concerned with the technology of nuclear power generation.In the third world countries the energy production is strongly opposed by the United States,the world’s top polluter.Sincerely,if the nuclear power generation is authorized for the developed countries, so it would also be accepted for the developing countries like Pakistan.

Presently in the Eastern Punjab, Chashma nuclear power plant has been established with the co-operation of China.According to the defence ministry of Pakistan,China has negotiated the establishment of Chashma-3 and 4 power plants with the completion of Chashma-2 power project;Pakistan opted for the Nuclear Power generation on a large scale to attain the energy requirements with a coordination of China, which has already been developed to generate Nuclear Power.

Recently 11 to 14% electricity requirement is increasing annually and the distance between generation and supply is expanding due to the growing economy of country.Now a day’s there is a power gap of 2,500 to 3,000 MW.(12)

11) ‘Pakistan-China energy Forum held in Islamabad’, Embassy of the People’s Republic of China in Islamabad, May 3, 2006. 12) Chashma Nuclear power plant (Chashma 1) was started in 1992 with the help of People’s Republic of China The Dawn, December 18. 2004.

In December 2008 the President PervezMusharraf performed the inaugural ceremony of Chashma-2 Power plant, which have the capacity of 325 MW power generation, Islamabad is 280 km South-East to the project. He certified that world bodies respected the Pakistan’s nuclear safety infrastructure is functional and effective. Chashma-II power project was completed at the end of 2010 and it was resulted due to co-operation between the Pakistan Atomic Energy Commission (PAEC) and the ChinaNational Energy Commission(CNEC) according to vice President of CNEC Yu Jian Feng, the Dome placement shows the transfer of the plant from civil work stage to fully swing equipmed installation. China had agreed to build second stage of Chashma nuclear Power plant in 2004, the whole contract of the project is carried to ChinaZhongyuanengineering firm.

Since 1986 the China is helping Pakistan for nuclear power production,both the countries signed nuclear cooperation agreement and uplift the research and commercial plants. In 1990 the agreement for the Chashma nuclear power plant was signed, the plant was fully operated in 1998 having the power generate capacity of 300 MW. The nuclear power plant was constructed and operated with the co-operation of China and generating power 300 MW since 2000. Its location is on the left bank of Indus River near Chashma Barrage in Punjab province. The power plant is following the safeguards under the International Atomic Energy Agency (IAEA) and has the Pressurized Water Reactor (PWR).Pakistan and China committed in an agreement in 2005 that the China will provide two nuclear power productions plants to Pakistan in up coming 10 years.

The Chinese primeir certified this during his visit at NewDelhi that the nuclear co-operation between Pakistan and China is completely anti-proliferated according to the international norms and is to be use for peaceful and constructive purposes. China raised serious concerns regarding nuclear non-proliferation in the world’s agenda as the Chinese nuclear experts are highly motivated to the commitments with Pakistan. On the opposite side the US denied to sign the nuclear co-operation part with Pakistanbut same was done with India. Eventually Pakistan came to a conclusion that it should carried out through Beijing coordination, and Pakistan accelerated the efforts to acquire 1000 MW nuclear power generating plant with the assistance of China.

Pakistan budgted US $ 1.192 billion for the construction of Pakistan Nuclear Power Fuel Complex (PNPFC) to avail the facility of manufacturing Pressurized Water Reactors (PWR) andthe country have also decided to build Nuclear Fuel Enrichment Plant (NFEP) by utilizing Rs 13.078 billion.

According to country’s energy security plan, the PAEC has given the task that upto 2030 six nuclear power plants will be operated with 8,800 MW electricitygenerations.The PAEC has nominated the six power units which are located at Qadriabad head works, Taunsa-Punjnad canal near Multan, Dera Ghazi Khan Canal near taunsa barrage,Pat feeder canal near Guddu, Nara canal near Sukkur and River Kabul near Nowshera at a cost of Rs-150 million.

2.8 Setting Up Heavy Mechanical, Heavy Electrical & Aeronautical Complex in Pakistan with Chinese Assistance & Collaboration:

After the 1971 war China and Pakistan agreed to provide a remote arrangement for extended maintenance of the crafts to Pakistan.The first factory to over haul the F-6 was constructed at Kamra in 1972 with co-operation of China and enabling Pakistan to maintain the crafts by itself.The first overhauled F-6 was locally rolled out in 1974 and since then it had been a stream of aircrafts that have been under gone such type of facilities, like maintenance, periodic minor and major complex issues and overhauls.The institute had become a research center to develop, improves and various modifications in maximum of Chinese aircrafts to compete with the western systems and weapons.With such an expert platform and studied capability to evolve, develop and research specific PAF requirements, the PAC become a symbol of technical excellence and self-reliance.

F-6 rebuild factory has received the core competence in aircraft engineering from China.In 1966 followed by the war another diversification from Francewas the overhaul requirement of its Mirage fleet to resource Military equipments.The institution of MirageRebuild Factory was constructed in 1975.The first Mirage was overhauled in 1980.It was then naturally progressed for manufacturing of aircraft. Mushaq(MFI-17) aircraft was manufactured at PAC easily, the first indigenous model in 1983.It stated manufacturing the different air crafts, such as the Jet Trainer K-8 for Karakorum, the mountainrange that joined both the countries and became an example of rock solid friendship.

The JF-17 (Thunder) has also been manufactured on the same category at PAC factory. TheKamra Avionics Rebuild Factory was constructed in 1985 to achieve overhaul and maintenance of PAF’sRadar Fleet at extended levels.Now a days KARF has become center of excellence and modernized with research facilities.

It has the capability to produce/manufacture all types of radars, ground based as well as airborne, with a host of the avionic equipment that have areal fighter potential of any modern fighter.

The PAC has earned its name as a reliable engineering facility provider in the aviation stream of Pakistan.It had produced parts of Boeing Company in a recognized manner and streamed into the further commercial products as indigenous producing tablets matching standards of the today’s market.It was constructed with the Chinese great collaboration.

Chinese sourced 750 aircrafts in the PAF inventory had been overhauled at F-6 Rebuild Factory upto date.It had proved a large amount of savings borne to the Pakistani exchanger since that seeking replacement or the replacement in place of the gone away aircraft and technologies.As discussed above the most prominent feature of the PAC is the modifications in the Chinese and other weapons to enhance competing potential and their operational efficiency.It has been calculated that every aircraft overhaul would include stripping for ferry, towards China through sea, its overhaul procedure and getting back to Pakistan may get a cost of about 3- 4 million.By the existence of PAC’s every year Pakistan is saving about US $ 700- 900 million.Presently the PAC’s factories are manufacturing aircraft spare parts,which is fully specialized and contributing to National Economy by reduction in the cost of maintaining as well as the manufacturing the different fleets of the Army and the Pakistan Air Force.(13)

All present facilities at the PAC’s factories are overhaul major repairing including engine maintenance and overhaul, manufacturing of parts and indigenous efforts which have gained 25-30% of each product.According to the prominent achievements in terms of saving resources, particularly time and financial are paying back towards government and the people of Pakistan.

At present about 11,000 men and women are working at these factories with a large part of the civilian streams of those manufacturing the JF-17 are civilians upto the 70 %.It creates jobs and balance opportunities towards the whole society.

From the decades the China sourced fleet of the Pakistan AirForce had included the F-6(MIG-19), F-7(PG), F-7(MIG 21),JF-17, the FT-5(MIG-17), the Y (called U in Pakistan)-Mig (Mig-15). The four ZDK-03 AEW and C aircraft are also added to the PAF fleet. The PAC is the marvelous monument towards the ironed relationship between Pakistan and China. The PAC’s had also been called F-6 RF in 9 well deserved recognition in the defence of Pakistan, due to its services even through the old horse is long gone.

The friendly relations jointly forged by China and Pakistan for as long as more than half a century has become a model of state-to-state relations. Relations of this kind have made a positive contribution to safeguarding peace and stability in this region and Asia, and have drawn attention from the international community. It has brought true benefit to our two countries and therefore is valued by both sides. The people of both China and Pakistan are proud of this friendship.

(13) Pakistan-China friendship embrassing the future ‘by Chinese Ambassador to Pakistan’, Liu Jian, Daily Times January 10, 2012.

2.9.WHAT ARE THE MAIN CHARACTERISTICS OF CHINA-PAKISTAN RELATIONS?

1. China and Pakistan are good neighbors that have lived in peace and harmony for over a thousand years.

China and Pakistan are well-known across the world for the civilization of the yellow River and the Indus River respectively. They have enjoyed an old history of friendly exchanges and there is profound traditional friendship between their people.

2. China and Pakistan are good friends that treat and respect each equally.

The beginning of political and traderelationships between Pakistan and China has twistedmore than a new chapter in their relationships. Our two statesstick on to the Five Principles of diplomatic co-existence, esteemall other, extravagance each other as colleagues and never force something on the other, treat each other as equals and never force anything on the other. Politically, they firmly trust each other and have always treated and handled their relations while taking into account the general strategic situation.

Frequent appointment and conferenceamong the leaders of our bothstates is an outstanding characteristic of China-Pakistan relations. These visits have greatly strengthened mutual understanding and friendship and made clear the orientation of friendly cooperation between our two countries.

3. China and Pakistan are good brothers that care for each other and support each other in their core interests.

China firmly supports Pakistan in its just struggle for maintaining national sovereignty, territorial integrity and national security. Over many years, Pakistan has rendered China valuable support on its issues of core interest such as Taiwan, Tibet and cracking on the East Turkistan Islamic Movement terrorist force.

During my ambassadorial stint in Pakistan, I would go to the country’s foreign ministry to discuss with the Pakistani side, cooperation between both sides every year when the human rights conference was held in Geneva for discussing anti- China motion sponsored by the West. The latter would always tell me, “China’s concern means Pakistan’s concern. We would render whatever cooperation our Chinese friends need from us.” In July 2009, as the special representative of Chinese Foreign Minister Yang Jiechi, I paid a visit to Pakistan to convey the Chinese government’s gratitude to the Pakistani government for its support to China over incident in Urumqi. Prime Minister Syed Yusuf Raza Gilani toldme, “The Pakistani government firmly supports the Chinese side in all the steps it has taken to maintain stability and development.” While meeting then Pakistani Foreign Minister Shah Mehmood Qureshi and then Forien Secretary Salman Bashir, I was told, “Urumqi’s incident is China’s internal affair. China’s security means Pakistan’s

37 security, and so does its development. Pakistan firmly supports China in protecting its own interest of security and development. Pakistan has told the members of the organization of Islamic countries, they should support it and must not do anything to harm the interest of their Chinese friends when the country is confronted with difficulties.”

4. China and Pakistan are good partners, and enjoy cooperation with each other

.Since the beginning of the 21st century, both sides have adopted a series of strategic steps and systematic arrangements to deepen and expand their economic and trade cooperation. By the end of 2011, contracted projects and contracts of labor cooperation signed by the Chinese enterprises in Pakistan totaled US $ 22.915 billion with their turnover amounting to US $ 17.19 billion. Many Chinese enterprises have take an active part in Pakistan’s projects in the areas of communication, traffic, power, oil and gas survey, as well as resource development, which has not only helped Pakistan’s economic development, but is also of importance for them to join the international market.

During the big earthquake in Wenchuan of Sichuan Province, China, Pakistan donated to China’s quake-hit areas all its tents in stock. When Pakistan suffered the unprecedented flood in 2010, China assisted Pakistan with the largest relief aid and participated in Pakistan’s reconstruction plan in the wake of this disaster.

5. The exchange and cooperation between the military of our two countries is an important manifestation of great mutual trust between China and Pakistan.

Over the years, close cooperation has been carried out at various levels and in many areas between the defence department and armies of our two countries. It covers exchange of visits between different groups, personnel training, consultation over defense affairs, joint military exercises, Navy’s joint search and relief exercises and cooperation in defense production. All this has reflected the depth of friendship between our two countries and the firm trust between us.

6. Our two countries have conducted friendly consultations and cooperation on regional and international affairs.

China and Pakistan have broad consensus on and common interest in, major international issues concerning world peace, security and development, and addressing traditional and non-traditional threats to security. Over regional and international affairs, they have kept intimate exchange of ideas and coordination, and carried out effective cooperation. They serve as an active power for maintaining regional and world peace.

Our two countries have carried out substantial cooperation inside the two- sided and multipartystructure and mutuallystrugglein opposition to “the three services”, namely separatism, terrorism and extremism. Pakistan has made a major contribution to combating terrorism and endured a heavy sacrifice. The international community should acknowledge its contribution, sympathize with its sacrifices and support its effort to maintain security and stability.

7. All weather friendship and all-dimensional cooperation serve as an obvious summing-up of China-Pakistan relations.

Having gone through the test of changes in both the international situation and domestic situations, China-Pakistan relations have shown strong viability. Our two countries have established dialogue mechanisms of various kinds while their cooperation has covered all the areas at different levels and borne rich fruit.

8. China-Pakistan friendship from generation to generation has widespread popular support and profound foundations. The growing exchange in the cultural and people-to-people area over the recent years is a new characteristic of China-Pakistan relations. Looking ahead, both sides attach importance to exchange between the young people of our two countries and cooperation in areas of culture, education, science and technology. Youth exchange programmes were an important element of China- Pakistan year of friendship. The positive coverage of China-Pakistan relations by the media of our countries has played an important role in enhancing understanding and friendship between our people.

2.9.1 THERE IS GREAT PROMISE FOR CHINA-PAKISTAN RELATIONS IN THE 21ST CENTURY

Since the beginning of the 21st century, great changes have taken place in the regional and international situation while international relations are in the process of great development and great readjustment. Multi-polarization and globalization are developing like never before. Peace, development and cooperation still remain significant in our mentality still exist. While bringing about rapid development, globalization has also brought forth problems and challenges of various kinds. There are more manifestations of global problems such as climate change, food security, energy security and public health security. As the world financial crises, which began in 2008, has lasted for a long time with great impact, it will take time for global economy to recover. The mass demonstration, Occupy Wall Street, breaking put in the US spread across the world, propelling the people to think about several issues. Turmoil of West Asia and North Arica has produced profound meanings. Terrorism, proliferation of weapons of mass destruction and regional conflicts still remain outstanding. World peace and development face daunting challenges.

New situation and changes in the world and our region urge China and Pakistan to join hands to work unswervingly for pragmatic cooperation in all areas. This is both the call of our times and the common aspiration of the people of our two countries. There exists a solid foundation and favorable condition to constantly take strategic and cooperative partnership between our two countries to higher level.

Tested by time, China and Pakistan are good neighbors, good friends, good partners and good brothers. The all-weather friendship between our two countries enjoys extensive popular support. China and Pakistan share rich cooperation in all areas, which is mutually beneficial. The broad consensus on international affairs, shared by our two countries, is a firm basis for cooperation between both sides. In term of our bilateral relations, friendship and cooperation between China and Pakistan are conducive to the tranquility of the border areas in West China, the stability and development of Xinjiang Autonomous Region, as well as to Pakistan’s economic development and maintenance of its independence and security. In term of international relations, they are also conducive to promoting democracy, addressing global energy and food security, climate change, fighting terrorism, developing regional cooperation and strengthening cooperation in the Indian Ocean and the issue concerning the reform of the UN Security Council.

Looking ahead, cooperation between China and Pakistan is bound to increase and their friendship will grow with each passing day.

2.10 Can Pakistan Eventually Become a Trade and Energy Corridor for China?

Since 1999 China’s western areas are undertaking a multi-billion dollarsfinancialboost programme, in the China’s Government’s tactic for the expansion of western areas. (14)

In May 2010, the Chinese government announced the establishment of the 6th Special Economic Zone (SEZ) in Kashgar, Xinjiang Autonomous Region, bordering Pakistan. President Hu Jintao has instructed the Xinjiang authorities to achieve “leapfrog development” and “lasting stability” in Xinjiang in the shortest possible time.

14) Beijing is investing 730 Billion Yuan (Roughly US $ 88 Billion) in westeren China. Tariq Niazi, “Hina’s Gwadar Naval outpost”, the gemstown Foundation, February 17, 2005.

In this regards, Director Research and Development, Pan Zhongming, Department of Xinjiang Global Expo Organization declares, “We recognize that Kashgar has been a very good trade and trade collaborationoccasions for Pakistan.”(15)Pakistan, as a neighbor, can play a very important role in West China’s development strategy by providing access to the sea. “The success of Kashgar’s Special Economic Zone will rely on Pakistan’s stability, development and assistance. China needs Pakistan to facilitate its physical connectivity with West and South Asia as well as the Indian Ocean rim. Chinese need Pakistan to furthermoreimprove the security and safety of China’s maritime borne transport of premeditatedpossessions, mainlyacontinuousprovision of oil. China and Pakistan regard each other as their strategic asset.”Pakistani entrepreneurs have been regularly participating in the Urumqi Trade Fair for almost two decades; since 2011, this has been converted to the China-Eurasia Expo.

On March 20, 2007 with the inaugural ceremony of the Gwadar Deep Sea port, the forecast of Pakistan flatteringan Energy Corridor (TEC) and Trade for China are regularlyattractive and brighter. Pakistan had been buildingconcentratedhard work to propose China Since 2006, theutilization of its important strategic location as a gateway to West Asia,Central Asia and South Asia for energyand economic connectivity via the Karakoram Highway (KKH). Net appraisal of the powersupplies of the quicklyrisingeconomy of India and China furthermoreamplification Pakistaniconception of helping as energy and trade corridor. (16)

Prounderstandingthe prospective of flattering a TEC, Pakistanimanagement has been mainly focusing on China. Pakistan has also been offered by Iran for land admittancethroughout its terrain to Russia and Central Asia for business and in return asks Pakistan for comparableadmittance to China, via the KKH. Through Pakistan India has also exposedintenseattention in contact to Afghanistan, Iran, Western China and Central Asia. Though, Pakistan hadcompletedentrance for India restricted with the generalperfection in political relationships and advancement on the exceptionaldisputedproblems between both the states. Saudi Arabia, apparently, is also appearing into the potential of by this corridor for Chinese power supplies.

Since 2006 the validation of Pakistani offer to provide as a TEC had been replicated in the numerous declarations of its guidance.The primary and the mainly sophisticated explanation of this idea can be originated in the speak of ex- President Musharraf to the Sino-Pak Business meeting and in February 2006 ,elite discussions to the China’s media, throughout his five-day state trip to China.

15) Kashgar SEZ offers veru good opportunities for Pakistan, business recorder, May 26, 2012. 16) Pakistan offers China trade and energy corridor, the Nation, February 24, 2006.

Thistrip to China was in correlation with the ceremonyprearranged by Chinese to memorialize 55 years of foundingpolitical and traderelationships between both states.(17)On March 2, 2006, he said in ameeting with the Beijing Review, in printed when inquiredconcerning the grounds for his highlighting on Pakistaniprospective to turn into a trade corridor. (18)

“This corridor is significant for Pakistan as well as for other countries also. We have to believejointremuneration whenever you expand relations with any other state. They magnetize you and you draw them. Pakistanitopographyprovides us a lot of benefit to give out as the ‘corridor’ as it is the hub between China, Central Asian and South Asia republics. For anybody who desires to interrelate between these areas is not feasiblelacking of Pakistan. We are extremelyarrogant of the reality that Chinese has unlocked to the exteriorglobe. It is spending in the world. But the state obtains oil from Saudi Arabia and carry the oil all the meansabout to its easternshore. The transfercourse is very lengthy. Chinese also do business with Africa, Europe, India and the Middle East. How can set off China do all this throughout its easternshoreline? China can go throughout Pakistan. Pakistaniarecognizant it can give a connection. Since our comradeship with Central Asian republics and China, we would resemble to giveanundersized route and added to all types of energy and tradecollaboration. Consequently, I would like to say Pakistan the energy and trad corridor of the vicinity”

Primarily there were no commentaries by the China’smanagement on the planned TEC. Though a few Chinese academicmade expressions their personalobservations on the plannedthought. For instance, Mr. Sun Shihai, aninvestigator at the Academy of social Sciences in China, supposed “Though, the planned pipeline is not a scheme that be able tolaunchshortly, it mighteffort well in the extendedlope.” Director of the office of South-Asian Studies, Dr. Wang Wei, of the Chineseorganization of global Friendly Contact, barbed“Pakistanisuggested role, as Chinese corridor for energy, is anoptimistic and inspirationalintention, which is valueenergetic and sombercontemplation and appraisal.”(19)Director of the Central-Asian studies institution of the Xinjiang, Dr. Pan Zhiping, and the TEC, “Gwadar port of Pakistan is ableto serve as China’s significantpowertransportpost. Oil will arrive at the harbor and depart on to China from African and the Middle Eastern countriesby means ofhighway, pipelines or rail.

This is novel energy conduit of China.” Likewise, Mr. Hu Shisheng, a famous Chinese superior investigator on South-Asia of the Chinese Institution for Contemporary International Relations (CICIR) articulated his analysis in the words which are given as: “Pakistan’s President Pervez Musharraf planned‘energy corridor’.

17) See President Pervaiz Musharraf’s address to Pak-China business forum. www.pakistagov.pk 18) Beijing review, March 02, 2006. 19) Niyanshuo, ‘corridor of cooperation’ Beijing review, NO13 March 30, 2006.

Which prior this year which will give China easyadmittance to gas and oil in the Middle East and Central Asia would help China’sspread the resources of its power imports and willgo in front the improvement of supplementaryinfrastructure, pipelines and railways. It tranquilwantspossibilitylearnings and either Pakistan is competent of guarantee the protection of the passage is the key problem”. (20)

As the significance and worth of Pakistani TEC is authenticated by a lot ofstates, Pakistan is particularlyaiming Chinese interests, as both thestates are strengthening their financialrelationships and had a developingpremeditatedbusiness. Furthermore, the roads for TEC need multi-billion dollarsfinancialpromise, which merely China has the interests and capability to create. Fullpracticabilityreadings are being approved for laying a railway lines and a pip-eline alongside the KKH up and about to the China’sboundary and connecting it to the Gwadar port. The decisions of the state council of China are welcomed by Pakistan in its 12th Five-Years Plan publicized in 2011, to buildSino-Pak railway lines. (21)

In spite of Chinaeseobvioussmallsilhouette on the TEC, its participation and support in the road and rail networkdevelopment in Pakistan pertinent to the TEC cannot go away unnotice. Chineseobligation for the building of Phase-II of Gwadar port and the novelglobalairfield at Gwadar, as well, up-gradation of the KKH and attentionof the China’scorporations to spend in an oil storage and refinery and facilities at Gwadar areonly some examples to demonstrate the claim. The project of Gwadar port comprises Gwadar international airport, dredging of berthing areas, construction of breakwater channels and enlargement of transportation of Gwadar areas.

Sino-Pak economic corridor is an under development plan that aspire to joinChinese Xinjiang in the North West regionsand Pakistan’s Gwadar port through highways, railways, and pipelines to carryoil and gas is an example of strappingcollaboration between both the states.

2.10.1 The Declaration Tashkent, 10 January 1966

The President of Pakistan and The Prime Minister of India, had met at Tashkent and havetalked about the accessiblerelationships between Pakistan and India, hereby proclaimed their firm determined to reinstatecommon and nonviolentrelationships between both the states and to encouragesympathetic and welcomingrelationships between their society.

They deem the achievement of this objective of imperative magnitude for the wellbeing of the 600 million populations of Pakistan and India.

20) “Experts call on to enhance economic links”, Ministry of commerce of the People’s Republic of the China, November 25, 2006. 43

21) Pakistan’s Ambassador to China Mr Masood Khan told the news man in Beijing on October 10, 2011.

The Indian Prime Minister and Pakistani President agreed that mutuallythey will apply all endeavor to buildexcellentfriendlyrelationships between Pakistan and India in accord with the UN agreement. They confirm their responsibility under the agreement not to have alternative to oblige and to resolve their clash through passiveearnings. They measured that the wellbeing of tranquility in their states and mainly in the Indo-Pak Sub Continent and, certainly, the wellbeing of the community of Pakistan and India were not serve up by the continuation of stressamid the both states. It was in opposition tothesesurroundings that Kashmir and Jammu was talked about, and each of the sideput forth its relevantsituation.

The Indian Prime Minister and Pakistani President have granted that all armed persons of bothstates shall be introverted not later on than 25th February 1966, to the locations they held earlier to 5th August 1965, and togetherside shall scrutinize the cessation of hostilitiesconditions on the armisticecontour.

The Indian Prime Minister and Pakistani President have granted that relationshipsamid Pakistan and India shall be foundation on the belief of non- interference in the interiorinteraction of every one.

The Indian Prime Minister and Pakistani President have granted that mutuallythey will dishearten any misinformationintended beside the other state, and will give confidence propaganda which sponsors the expansion of welcomingrelationshipsamid the two states.

The Indian Prime Minister and Pakistani President have granted that the Indian High Commissioner to Pakistan and the Pakistani High Commissioner to India will revisit to their position and that the customaryperformance of politicalassignments of both states will be reinstated. Both regimes shall examine the Diplomatic interaction of Vienna Convention of 1961.

The Indian Prime Minister and Pakistani President have granted that to believeactions towards the re-establishment of trade and economic relationships, infrastructure, as well as edifyinginteractions between Pakistan and India, and to obtaindealings to apply the accessiblecontract between Pakistan and India.

The Indian Prime Minister and Pakistani President have granted that that they will providedirections to their personalestablishment to transmit the repatriation of the war hostage.

The Indian Prime Minister and Pakistani President have granted that the both sides will carry on the conversation of inquiryconcerning to the troubles of evictions and refugees unlawfulcolonizations. They also approved that twosides will buildcircumstances which will avoid the emigration of community. They additionally

settled to converse the come back of the belongings and possessions taken more than by each side in correlation with the divergence.

The Indian Prime Minister and Pakistani President have granted that the both sides will carry onconvention both at the uppermost and at newintensity on subject of undeviatingapprehension to both sates. Both have beendocumented the requirement to put up combined Indo-Pakcorpse which will details to their regimes in array to make a decision what additional steps ought to be taken.

The Indian Prime Minister and Pakistani President have recorded their thoughts of bottomlessadmiration and appreciation to the influential of the Soviet Union, the Government of Soviet and the Chairman of the Council of Ministers of the U.S.S.R personally for their positive, sociable and dignified part in conveying about the currentconference which has been resulted in jointlyacceptableconsequences. They as wellarticulate to the friendly people and Government of Uzbekistan, their honestappreciation for their devastatingwelcome and munificentwarmth.

This Declaration has been witnessed on the invitation of the Chairman of the U.S.S.R for Council of Ministers.

(Sdddddddddd.) (Sdddddddddd.) President of Pakistan Prime Minister of India MUHAMMAD AYUB KHAN LAL BAHADUR SHASTRI

2.10.2China-Pakistan joint communiqué, 31 March 1966

At the invitation of Field Marshall and President of Pakistan, Muhammad Ayub Khan, His Excellency and Chairman of the People’s Republic of China, Mr. Liu Shaoqi, and Madame Liu Shaoqi remunerated a welcoming State visit to Pakistan. They were accompanied by Vice-Premier Chen Yi, Madame Chen Yi and other high officials of the Chinese Government….

The Chairman and the President stressed that the Kashmiri People’s right of self-determination must be respected and that the dispute of Kashmirbe supposed to be settled in agreement with the desires of the people of Kashmir as promised to them by India as well as Pakistan. It was reaffirmed by the President that the Pakistan Government will continue to support the Kashmiri people’s struggle for self-determination. The Chairman reaffirmed the firm support of the Chinese Government and people to the righteous stand of the Pakistan Government on this dispute and the immediatelyeffort of the people of Kashmir for their right of autonomy.

The President expressed the bottomlessthankfulness of the peopleand Government of Pakistan for their support they received from the Government and people of China in resisting aggression. The Chairman expressed administration for the heroism and patriotism of the Pakistani people in their effortsin opposition tooverseashostility and interference. It was Reaffirmed by the Chairman that the the Government China and people stick on their honorableposition of oppositehostility and assisting its victims, and that the Chinese people unswervingly stand on the side of the Pakistani people in their effort to protectnationalizedself-determination and dominion and counterantagonism.

The President repeated the solidconfidence of the Pakistani peoplethat the People’s Republic of China must be returnedits legalprivileges in the UN, and that everyplan to construct “two Chinas” is jump to fall short. The Chairman expressed thanks for this stand.

The Chairman and the President expressed satisfaction at the growth of welcomingrelationships between both the states. They stressed out that the companionship between Pakistan and China is not stand on pragmatism but has a concretebasis. The people of both the states have providedconsideration and prop up to everyone in the fight against hostility, and a deepfamiliarity has been counterfeitamong them. The two parties are determined to further strengthen and develop the friendly relations and cooperation between China and Pakistan, and hold that this is in accord with that common desire of the two peoples and conducive to Afro-Asian solidarity and world peace.

Speech by Huang Yuang-Sheng, of the China’s People’s Libration Army Chief of the General Staff, during the visit of a Pakistani Armed Forces Delegation, at the Peking banquets,lead by C-in-V of Army General Yahya Khan, 8th&10th November 1968.

Under the leadership of President Ayub Khan, Pakistani people have in currentyearsbattledinterminably to defend their national self-determinationand opposeoverseashostility. The Pakistanipublic and armed personnel have bravelydisgusted the armed assault by the India’sintransigent. Unified as one, the Pakistanicitizens have instant and once moreaggravatedrevolutionaryactionsoutline criminal and abroad plan to divide West and East Pakistan. We honestlyexpect that the Pakistanicitizens and armed personnelwill attainnovel and still largervictory in their just effort to guard national self-government and state’sdominion.

The majorityfierceassailant of our time, United States chieftain of modern revisionism and imperialism are thestair up their co-operation in anabortiveendeavor to re-divide the globe. They conspire and providegreatamount of equipment and arms, “economic aid” to sustain the India’sreactionary who have repetitivelyassault the territory of Pakistan and China and are intimidating the

safety of our both states. United Stateschieftain of modern revisionism and imperialism hascompletedall things that arediscreditable and evil.

The China’scitizens would, as they haveDione before, determinedly support the Pakistani citizen’seffort to guardnationalizedautonomy and be in opposition tooverseashostility and resolutelyhold up the just great effort of the people of Kashmir for the exact to state self- determination.

Encouraged by United Statescontemporary revisionism and imperialism and the India’sreactionary, the beatenopponent of the community of Pakistan and Chinaliberation the dilemma of the India’s people and are freneticallyintensifying their weapons and amplifying their conflictmechanism, threatening the safety of China.

2.10.3 Speech by Chief of the General Staff, Huang Yuang-Sheng, of the Chinese People’s Liberation Armyat the Peking banquets during the visit of a Pakistani Armed Forces Delegation, led by C-in-V of Army, General Yahya Khan, 8th& 10th November 1968

Under the leadership of President Ayub Khan, Pakistani people have in current years battled interminably to defend their national self-determination and oppose overseas hostility. The Pakistani public and armed personnel have bravely disgusted the armed assault by the India’s intransigent. Unified as one, the Pakistani citizens have instant and once more aggravated revolutionary actions outline criminal and abroad plan to divide West and East Pakistan. We honestly expect that the Pakistani citizens and armed personnelwill attain novel and still larger victory in their just effort to guard national self-government and state’s dominion.

The majority fierce assailant of our time, United States chieftain of modern revisionism and imperialism are the stair up their co-operation in an abortive endeavor to re-divide the globe. They conspire and provide great amount of equipment and arms, “economic aid” to sustain the India’s reactionary who have repetitively assault the territory of Pakistan and China and are intimidating the safety of our both states. United States chieftain of modern revisionism and imperialism has completed all things that are discreditable and evil.

The China’s citizens would, as they have Dione before, determinedly support the Pakistani citizen’s effort to guard nationalized autonomy and be in opposition to overseas hostility and resolutely hold up the just great effort of the people of Kashmir for the exact to state self- determination.

Encouraged by United States contemporary revisionism and imperialism and the India’s reactionary, the beaten opponent of the community of Pakistan and China liberation the dilemma of the India’s people and are frenetically intensifying

their weapons and amplifying their conflict mechanism, threatening the safety of China.

2.10.4 Zhou En-lai’s speech Extract at the banquet given in honour of Pakistani Air Marshal Nur Khan on 13 July 1969

Currently the United States social-imperialists and imperialists are rung up their conspiracy and disputation in pursue their strategy of hostility and fighting in a vain effort to dictate and re-divide the globe. Lately, in scrupulous, they have been organizing hither and thither in the whole Asia for a sequence of connivingactionsopposing China, against the community and against the revolt. The purported “Asia’sunitedsafety system” is a novelstride taken by social- imperialism in its intensifyinghard work to manipulate a new-fangled anti-China armedcoalition. Spectacularly the billboard of “unitedsafety”, social-imperialism reallyaspires, at hostility and development against the Asian states, annoying to force them to desert their dominion and self-government. In order to understand this plan, it has placedonward the alleged “localmonetarycollaboration” by captivatingcompensation of Asian states’ want to build up their publiceconomy, unsuccessfullyattemptthus to allure them into its ensnare and steadilyput them within its globe of control. In so responsibility, social-imperialism is basicallytreaded into the shoes of United States imperialism. This “agreement” and so as to “institute” put together up by United States imperialism in Asian countriesabove a decade before for opposite China and the nation have fallseparately and survive only in surname. In merely convene with still addedembarrassingbreakdown. It is merelyusual and completely just that the Pakistani people and the virtuous would estimation have freshly depicted and invalidate its plans.

2.10.5 Zhou En-Lai’s speech at the banquet given by Nur Khan in Peking, 16 July 1969 (Extracts)

Air Marshal Nur Khan’s present visit to China has made new contributions to the amplifying of the welcomingrelationships between both the countries and confirmsall over again that Sino-Pakcompanionship is stand on the rock-hardbasis of the Five principles of Peaceful Coexistence, and that no one on earth can undermine it. Imperialism, modern revisionism and their lackeys have once again failed in their recent scheme to wantonly sabotage Sino-Pakistan friendship.

The modern revisionist themselves have really betrayed internationalism and wallowed imn the mire with Imperialism and have degenerated into social- Imperialists.

The Chinese Government wills, the same asconstantly, resolutelymaintain the Pakistanicommunity against overseashostility, steadfastlyprop up the people of Kashmir in their efforts for the right to stateautonomy. 48

2.10.6 Sino-Pak joint communiqué Extracts on 14 November 1970 by the visit Peresident Yahya Khan to China

President Yahya Khan and Premier Zhou En-lai seizedmeeting in a very honest and welcomingenvironment on imperativeglobalproblem, additionalgrowth of friendly relationships and collaborationamid Pakistan and China and other inquiries of generalattention. Both the countries were extremelycontented with the consequences of the meeting.

Both the countriesarticulated full contentment at the bottomless, all aroundgrowth of the welcomingrelationships between Pakistan and China on the base of the fivevalues of jointadmiration for dominion and regionional integrity, joint non-interference, non-aggression in every one’s interiormatters, mutual and equally advantage and nonviolent co-existence. Both the countriesarticulated the view that the additionalintensification and enlargement of the welcomingrelationships and collaborationwish for and deepwellbeing of the people of both countris and conducting to the Afro-Asian communitygrounds of union against U-S imperialism. Both the countries articulated the view that firmdevotion by both Pakistan and China to the Five Principles of nonviolent Co-existence was exemplify in the resolution of the borderinquiry between the two states. Such warmrelationships between Pakistan and Chinagiveanexcellent example of graciousrelationships betweenthe countries working diversecommunalsystem.

The Pakistani side articulatedbottomlessadmiration of the support and collaboration that Chinese had unlimited to Pakistan and affectionatelyaccredited the reality that Chineseopenhandedassistance in the accuratefortitude of affinity of advantage had contribute to the financialgrowth of Pakistan. Not anything that Pakistan had at presentinstigated her Fourth Five-Year Plan; the China’s Govt articulated its eagerness to deliver to Pakistan additionalsupport within Chineseresources and capability to help formulate the economy of Pakistani self dependence.

Affectionately admiring the willpower and audacity that the Pakistani people had constantlydemonstrated in defenseof their state integrity, the China’s side recap its dense support to the Pakistani people in their efforts for the defence of stateself- determination and against all types of exteriorantagonism or overseasinterfering and to the people of Kashmir in their immediatelyeffort for their right of autonomy. The China’sside noted with attention the latestsuggestions made by the Pakistani President on the departure of troops with a view to permit the people of Kashmir and Jammu to freely work out their right of independence and measured it commendable of the support of the natives of differentstates. The Pakistani side articulatedgratitude for Chinese support.

2.10.7 Sino-Pak joint communiqué on Z A Bhutto’s State visit to China, 2nd February 1972

The President of Pakistan had a meticulous exchange of views with Prime Minister of China Zhou En-lai on the India Pakistan clash and its consequences, mainglobalproblems and the extra consolidation of welcomingrelationships and collaboration between Pakistan and China. The deliberations were held in a gracious and friendlyenvironment. They were completelycontented with the consequences of the conversation.

The Prime Minister and the Presidentpowerfully condemned the exposedhostilitycommit by India’s against the profession of Pakistan’s region and Pakistan by her in deliberate defiance of global law, the U.Nagreement and the Bandung doctrine. They call upon the globalsociety to take serious action of the grave penalty that must ensure for the world order if a state imposes its willpower on any other borderingstate by the utilization of armed force concerning armed hostility.

The President reiterate that upcomingrelationships between both the states of Pakistan must be recognizedduringconsultations between the selected leaders of the communitywith nooverseas influence or invention and that India’sarmed forceshave todepart from East Pakistan to allow such dialogue to acquire place in an environment free from compulsion or terrorization. He urges all countries to renounce from intriguingany impetuousact that would not solitaryaggravate the object but would, in upshot legitimize India’shostility. The Prime Minister articulated his sympathetic of and esteem or the beyondposition of Pakistan.

The Prime Minister and the Presidentgranted that the states in South-Asian and somewhere elsemust co-exist in harmony and friendship. They articulated their confidence that there could be no harmony in the Indian Pakistan sub-continent except India leavesregions under her armedemployment in accomplishment of the resolution of the United NationsSecurity Council and General Assembly dated 7th and 21st December 1971,correspondingly. The U.N shouldmake surefirmobservation of the truce in Kashmir and Jammu. They renowned with pleasure that the associates of the Third World in Islamic as well asin the general states in meticulous are supporting the Govt and the community of Pakistan in their effort to protect their publicself-determination and regional integrity against overseashostility and interfering in their interiormatters.

The Prime Minister and the President articulated greatapprehension over the destiny of Pakistan’scaptive of hostilities and civilian’sin Eastern Pakistan who is in the hand of India’s occupationalarmed forces.

They call upon India for the fulfillment of her compulsionsunderneath the Geneva meeting and send back these personnelwith nowait. The President articulatedeagerness to send back India’scaptive of hostilities and other social and armedpersons form Eastern Pakistan at the present in Western Pakistan in order to help in the remedy of Eastern Pakistan. The Prime Minister and the President furthermorearticulated their solemnexpectations that the slaughter being perpetrate against guiltless civilians in Eastern Pakistan would stopdirectly.

The Prime Minister and the President detained that the globalcircumstances is rising in a more and newconstructive way for the citizens of the differentstates. The President articulated his wish for tranquility in South Asia and intended forwelcomingrelationships with all borderingstatesstand on the Bandung ideology. They decisively support the community of the Sino-Indianstatse in their just effort for nationalizedfreedom, the Pakistanination and the Arab citizens in their just effortnot in favor of imperialism and for the restitution of their lawfulprivileges and the AFRO- Asia’s nation in their just great effortin opposition to neocolonialism,colonialism ,and imperialism.

The Prime Minister and the Presidentdistinguished with fulfillment the expansion of financialassistance between both the states. The Prime Minister affirmed that in array to assist the growth of the nationalizedfinancial system of Pakistan, the China’s Govt has determined to modify into grant the four credits which have previously been given to Pakistan which are being used and the reimbursementtimefor the loan given in 1971 shall be postponedupto 20 years. The Prime Minister furthermorearticulated the China’s Govtwillingness to give Pakistan with newcredit on analogousconditions when that loan had been used.

The Prime Minister and the President confirmed that amity and understandingamidboth the countries are found on main beliefs that are in agreement with the basicwellbeing and requirements of their community. They reaffirmed their devotion to the values of of admiration for regional integrity, non interference and peaceful coexistence in all other’s interiormatters. The Prime Minister cordiallycommend the willpower and bravery that the Pakistani people had beencontinuouslydisplay in protection their State self-government and regional integrity and restated the China’s Government and community’ddense support to the Government of Pakistan and community in their just great effort to protect their State self-government and regionalveracity against exteriorhostility and interfering and their compact support to the public of Kashmirand Jammu in the just great effort for the right of autonomy.

2.10.8 Statement by General Mohammad Ziaul Haq, Chief of Army Staff and Martial Law Administrator, on the occasion of the handling over ceremony of the Chinese Embassy building to the Chinese ambassador 27 September 1977, (Extracts)

The Pak-China friendship has now become a legend. It has become a legend after standing several tests of time. The friendship has continued to flourish even after the absence of the first architects of this relationship from the political sense of this world. It shows that our friendship does not depend on mortal persons. It is anchored on very solid principles….. Pakistan under late Field Marshal Ayub Khan realized for the first time the importance of a great neighbor across the Himalayas and felt the need for a close and dependable relationship between the two countries. The initiative met with a very warm response from Peking and the two countries started marching hand in hand with time. Soon, the cooperation expanded to several fields to the mutual benefit of both countries. It found expression in many forms including the Friendship Highway. The joint construction of this Highway proves that not even the Himalayas could stand between the two countries.

The growing power and influence of the People’s Republic of China is a positive contribution to the world peace. It also provides strength and inspiration to the countries like Pakistan which are striving hard to maintain their independence and sovereignty.

2.10.9 Premier Keng Piao’s Speech at the completion ceremony of the Karokoram Highway, 18 June 1978 (Extracts)

“With the completion of this highway, we have now an additional monument to the friendly cooperation between China and Pakistan. This is a happy event which calls for rejoicing by our two peoples.”

From now on, China and Pakistan have a land route as well as an aerial bridge between them, “Our two countries are getting closer, and the ties of friendship between our two countries stronger. Contacts between our two peoples will be more frequent.”

“How the people longed for centuries to have a broad and level road to facilitate trade between East and West, to carry out cultural exchange and to strengthen friendship! Today, the people’s thousand-year-old dream has come true with the completion of Karakorum Highway.

The Chinese Government and people highly value our friendship with Pakistan. We unshakablyhelp the Pakistani Govt and community in their just effort to defendnationalizedself-determination and regional dominion. We will make 52

unremitting efforts to further develop the welcomingrelationships and collaboration between our two states.”

2.10.10Speech by President Zia ul Haq at the inauguration ceremony of 28th October 1979 (Extracts)

After passing though many years and numerous trials, the Pak-China friendship has now strengthened on so firm foundations that no external element can disrupt it any longer. Not only the people of the two countries are rightly proud of this friendship, but many nations of the world look upon it with envy. Pakistan regarded its friendship with China as of basic importance for regional and world peace because the growing power of China is vital for the promotion of world peace and stability of this region.

February 11-17, 1998:

Pakistani Prime Minister Nawaz Shareef visited China. The Agreements and MoUs which were signed during thistripare given as under:

1. Agreements on Technical and Economic collaboration.

2. Agreements on Quarantine of Plant between the Governments of People’s Republic of China and Islamic Republic of Pakistan.

3. Agreements on Technical and Economic collaboration between the Governments of People’s Republic of China and Islamic Republic of Pakistan.

4. MoUsamid Commission of Industry, Science and Technology for National Defence of the People’s Republic of China and Ministry of Communicationfor the Islamic Republic of Pakistan.

5. Agreements on combined Development of Aircraft Super-7/FC/1 between the Governments the People’s Republic of China and Islamic Republic of Pakistan.

6. MoUs on collaboration between Ministry of Production and Industriesand the Ministry of Machine Industry of the people’s Republic of China in the Engineering segment and of Islamic Republic of Pakistan respectively.

7. Air Services Agreement was signed between Pakistan and Hong Kong.

July 27-30, 1990:

Pakistani Prime Minister Nawaz Shareef visited China. During the visit the following MoUs/Agreements were signed:

1. Agreements for Enhancing Mutually Beneficial Cooperation between Radio and Television Organizations of the Two Countries.

2. Agreements between the China Council and Commerce & Industry Federation of Pakistan Chambers (CCIFP) for the Promotion of global Trade (CCPIT).

January 17-18, 2000:

Pakistan’s Chief Executive General Pervez Musharaf paid a working visit Prime Minister Nawaz Shareef visited China. During the visit the following MoUs/Agreements were signed:

1. Agreements on Technical and Economiccollaboration between Governments ofthe People’s Republic of China and the Islamic Republic of Pakistan.

May 11th-14th, 2001:

China’s Prime Minister Zhu Rongji made a trip to Pakistan to smear the Anniversary of the foundationof trade and politicalrelationships and supported the both sides to enhancecollaboration in information technology, infrastructure, agriculture, and other field under the code of affluence.He also restated his assistance for the deep seaport at Gwadar and the coastal highway projects at Mekran as a sign of Sino-Pak relations.

Pakistan and China signed one Memorandum of Understanding MoU) and six Agreements during this trip which are given below:

1. Agreements on Technical and Economic collaboration, in which the China’s Govt granted to give a funding of 50 million Yuan for the encouragement of Technical and Economic collaboration between both the states.

2. Rent accord on the Copper-Gold Project of Saindak, in which Chinese Corporation of Metallurgical Construction (CCM) was set a ten-year lease to excavation and process of goldand copper mine at Saindak.

3. Agreements on provision of locomotivefor Pakistani Railways, in which the Dongfang Electric Cooperation of China’s, underneath a Supplier’s recognition was to supply 69 locomotives for Pakistani Railways.

4. Agreements on Supplies of Passenger Coaches to Pakistani Railways, in which the Chinese National Machinery Export and Import Corporation (CMC) will be responsible to provide 175 in number, passenger coaches under a supplier’s credit to the Pakistan’s Railways.

5. Accord on the White-Oil Pipe-line was be signed between the Chinese Petroleum Engineering Construction Corporation (CPECC) and the Pak- Arab Pipe-line corporation, the concluding to supply materials and equipments for the building of a pipe-line to transportfuel producttoMahmud Kot from Karachi.

6. Tourism Co-operation Agreement on

7. Memorandum of Understanding between Pakistan’s Telecommunications Company Limited and ZTE was signin which the China’s ZTE Company will supplyfunding of 100 million US $ for the construction and fixing of digital- switched line to the Pakistan’s Telecommunications Company Limited.

March 24-26, 2003:

Pakistani Prime Minister Mir Zafrullah Khan Jamali paid an official visit to China, and his visit he and the Chinese Premier jointly announced the founding of China-Pakistan Friendship Forum. During the visit the following MoUs/Agreements were signed:

1. MoUs signed on collaboration in the Railway Sector, and description of Pakistan as a destination of Tourism.

2. Prime Minister Announced the Formation of Pakistan China Friendship Forum.

April 5th, 2005:

Wen Jiabao China’s Prime Minister made a visitto Pakistan and subsequent toofficial talks with his counterpart Shaukat Aziz, and signed 22 MoUs and agreements on collaboration in defence, economic, energy, social sector, infrastructure, education, higher education, housing,health and other area. Agreements and MoUs which were signed during this visit are given as under:

1. Treaty of Friendship between the two sides signed, collaboration and excellent Neighborly relationships.

2. “Early Harvest Programmes” (EHP) which has become functionong since 1stJanuary, 2006, were signed under this accord on China has bring up to 0 %

tax on 767 objects. This was the primary step for the establishment a Free Trade Area amidboth the states.

19-23 February 2006:

Pervez Musharaf the President of Pakistanmade a visitto China to open the festivities of the 55th anniversary of the origin of Political and Trade relationships between Pakistan and China, and inked a sequence of frame of accords to enlarge and get deepertwo-sidedfinancial and trade collaboration, as well as an accord to constructcollaboration in the passiveappliance of atomic power.

Agreements and MoUs which were signed during the visit are givenas under:

1. Agreement on construction of growing and deepen Bilateral Trade and Economic collaboration.

2. Agreement on construction of collaborationamong the Defence Ministries of both the states.

3. Agreement on construction of collaboration in the power sector between the Ministries of Natural Resources, Petroleum and Natural growth and restructuring Commission.

4. MoUs on occupationaleducationalinstitutes between the China’s Ministries of Manpower, overseas Pakistanis and Labour.

5. MoUsamong the Ministries of Communications of Pakistan and Ministry of China on collaboration in reconstruction of Karakoram road.

6. MoUs on collaboration in pesticidemanagingamong the Agriculture Ministry of China and Food, Livestock and Agriculture ministries of Pakistan.

7. MoUs on collaborationamid the Ministries of Health of both the states.

8. MoUs on collaborationamid the China’s Commission for Family Planning, and Pakistan’s Ministry for Population andwellbeing.

9. MoUsamid Ministry of Agriculture,Livestock and Food, of Pakistan and China’s Ministry of Agriculture on collaboration in the Field of Fisheries.

10. MoUs on beginning the combined Five Year Plan for joint Economic and Trade collaborationamid China’s Ministry of Commerce and Pakistan’s Ministry of Commerce.

11. MoUs on collaboration in the ground fieldforstudy of Earthquake.

12. MoUs on collaboration in the Technology and Meteorological Science amid Metrological Management of China and Meteorological Department of Pakistan.

13. Agreement on common Loan interpretationuse of the privilegedCredit of Buyer’s to the Govt of Islamic Republic of Pakistan from the Govt of the People’s Republic of China amid EAD and EXIM a Bank.

14. Agreement on powercollaboration between China and Pakistan.

23-26 November 2006

Hu Jiantso the President of chinarewarded his milestone state visit to the Pakistan, the foremost visit of every China’s President in lasta decade, and deepen the all-around collaboration between Pakistan and China which were inked; 1) Organization of a Joint Investment Company, 2) Free Trade Agreement, 3) Five Year Development plan on Economic and Trade collaboration.

Agreements and MoUs which were signed during the visit are givenas under:

1. Agreement of Free Trade between the Governments of the People’s Republic of Chinaand Islamic Republic of Pakistan.

2. Program of Five-Year Development on Economic and Trade collaboration between the People’s Republic of China and the Islamic Republic of Pakistan.

3. Cultural Agreement for Administrative plan between the Governments of the People’s Republic of China and Islamic Republic of Pakistan for the year 2007-2008.

4. Sino-Pakconstructionaccord on Tank Project amid HIT and NORINCO.

5. Technical and Economic collaboration Agreement amid the Governments of the People’s Republic of China and the Islamic Republic of Pakistan.

6. Construction accord on safety of finance for Sino- Pakmutualcollaborationamid Finance Ministry and Finance Division of Revenue, the Governments of of the People’s Republic of China Credit and Export Insurance Company and the Islamic Republic of Pakistan.

7. Agreement between ENGRO Asahi Polymer and Chemical Ltd. (Pakistan) and National Chemical Engineering Group Corporation (China) relating to PVC back integrated complex at Port Qasim and Reconstruction of an EDC VCM Plant at Port Qasim.

8. Agreement amongplum Qingqui Motors Limited and the National Bank of Pakistan for launching a Community Transport Scheme under its President’s Rozgar Scheme.

9. Contract Agreement between National Highway Authority and M/s China Road and Bridge Corporation (CRBC) for improvement of KKH FROM Railkot to Khunjrab Chainage 335km.

10. Agreement between Saindak Metals Limited and China Metallurgical Group Corporation for Exploration and Development of Saindak East Ore Body for Utilization in Saindak Copper-Gold Project Balochistan. 11. MoU for the grant of exploration license in blocks of Baska and Bahawalpur East between Natural Resources and Petroleum Ministry of the Governments of the of the People’s Republic of China and the Islamic Republic of Pakistan China Zhenhua Oil Corporation Limited and North Industries company.

12. MoUsconcerningeconomic support for rehabilitation and reconstruction of KKH between the China’s Import- Export Bank and Ministry of Statistics and financial Affairs of the Pakistan.

13. MoUsamid the Ministry of Finance and Revenue Division and the CDB, the Govt of Pakistan on the Establishment of Joint Investment Company.

14. Framework Agreement on Security of Financing for China-Pakistan Bilateral Cooperation.

15. MoU between Huawei Technologies Co. Ld, and Pak Telecom Mobile Limited for successful implementation of the expansion of PTML GSM 900/1800 Network.

February 20-24, 2009:

Mr Asif Ali Zardari the president of Pakistan made a state visit to Chinese Shanghai City and Hubei Province, in which Pakistan and Chinasigned the accord on Trade in services for the Sino-PakFree Trade Area. The purpose of the visit was to help expand the close bilateral relationship into areas of economic cooperation, including agricultural, industrial and financial cooperation. In Yichang, the President visited the Three Gorges Dam.

During the visit the following MoUs / Agreements were signed:

1. MoU for Friendly Exchange between Sindh Province of the Islamic Republic of Pakistan and Hubei Province of the China.

2. MoUsamid the Govt of Hubein and Sindh Seed Group Corporation for development of Oil Seeds.

3. MoU between the Government of Pakistan and China Harbor Engineering Company for Dredging.

4. MoU amid Hubei Seed Collection Company and Pakistani Agricultural and investigation Council for development of Oil Seeds.

5. Accordamid the the Govt of the People’s Republic of China and Govt of Pakistan on Free Trade Area on Trade in Services.

6. MoU on cooperation between WAPDA and China Three Gorges PROJECT Corporation (CTGPC).

7. MoU between PARC and Xijiang Production and Construction Corporation on BT Colored Cotton.

8. MoU between PARC and Xijiang Toianye Water Saving Irrigation System Company on Drip Irrigation.

2.11 Beginning of a Meaningful Economic Cooperation

The process of consolidation of economic relations began in the late 1990s as the two countries realized the importance of the missing dimension of economic relations in their evolving strategic ties. Financialcollaboration, correspond the stage of defence and politicalsupport was deemed essential for the future of a sustainable strategic relationship. In order to expand economic cooperation there was areplace of milestonevisit by the headship of both the states, during whichthey signed a number of important agreements and MoUs to give boost and a new direction to their evolving economic cooperation. 59

2.11.1 Chinese Premier Zhu Rongji’s Visit, May 2001.

In May 2001, Zhu Rongji’s the prime minister of china made a visit to Pakistan, which consent with the celebration of golden jubileefor the foundation of political and traderelationships between China and Pakistan, substantive development was attained on financialcollaboration. The first China’s Prime Minister,Mr Zhu Rongji visited Pakistan subsequent to a time of 12 years. Pakistan was the first target in thesuccession of China’s Prime Ministervisited out of the country in the first time of the new-fangled millennium. This reality was tintedinstance and over again during the visit to display the power of Sino- Pakrelationships.

The prime minister of chinain his visitrecommend the both sides to enhancecollaboration in cultivation, information technology, infrastructure, and new fields underneath the code of commonassistance and reciprocity for attaining common affluence. He told”In boostingSino-Pakrelationships, we have to carry onpromoting the strength of looking foruniversal grounds. The president of Pakistan, General Pervez Musharraf highlighted that the strappingcorrelationrequired to be furthermorepaved in the prospectthroughoutprofitable and financialties. In a pro- visit announcement he told, I will attempt my best to build upfinancial and profitablerelationship between Pakistan and China and we will make the most of the China’s Premier visit to this ending.

In the visit, China and Pakistaninked one Memorandum of understanding (MoUs) and six Agreements at a ritualand also are present Zhu Rongji and General Musharraf on 12 May 2001. These integratedagreement on Technical and economic collaboration, Tourism collaboration, Lease accord on Copper-Gold Project of Sandik, Suppliesto Pakistan Railways of Passenger Coaches, though oil pipeline and MoUsamong PTCL and Chinese ZTE Corporation.

In the accord on Technical and financial collaboration, the Government of China would give a funding of 50 million Yuan intended for the encouragement of financial and technologicalcollaborationamidboth the states.

The accord on Tourism collaboration would give for supportflanked by two states in the field of tourism, duringassociatesamong their tourism associations, replace of information and combinedsavings.

Underneath the accord on Gold-Copper Project of Saindak, the Chinese Metallurgical Construction Cooperation (CMCC) was set a ten-yearsrent for mining and processing gold and copper mines at Saindak.

Agreements on Supplies of Passenger Coaches to Pakistani Railways, in which the Chinese National Machinery Export and Import Corporation (CMC) will be 60

responsible to provide 175 in number, passenger coaches under a supplier’s credit to the Pakistan’s Railways. .

Accord on the White-Oil Pipe-line was be signed between the Chinese Petroleum Engineering Construction Corporation (CPECC) and the Pak-Arab Pipe-line corporation, the concluding to supply materials and equipments for the building of a pipe-line to transport fuel product to Mahmud Kot from Karachi.

Memorandum of Understanding between Pakistan’s Telecommunications Company Limited and ZTE was sign in which the China’s ZTE Company will supply funding of 100 million US $ for the construction and fixing of digital-switched line to the Pakistan’s Telecommunications Company Limited

In adding up to these accords, the Prime Minister Chinarepeated his support for the Deep Seaport of Gwadar and the Coastal road Makranproject. He told, “These developments are extremelysignificant for the progress of Pakistan. Theseschemes will be fully supported by us and giveassistance in this regard”. Port, of Gwadar overlooks the Hormuz Strait, is intentionallysituated with open sea- tracks to all the direction. Afterward, on 22 March 2002, Wu Bang Guo the China’s Vice Prime Minister and General Pervaiz Musharrafare present at the pioneeringritual of the projected sea port, which will in addition provide to the surrounded Middle Asian-states, the westChinese regionand Afghanistan.China’seconomicsupport for all these developments is expected to be value over one billion U.S $.

China and Pakistan comprise a familiarconcentration for raising this deep sea port facility. China allegedly has strained up a ten-yeardevelopment programevalue 200 billion US $ for the support of its westregion. The shift has been intended at changing its focal point of growth from its south coastal line to the westregions for tactical and householdcauses. This projectedexpansionarrangement would allow Chinese to have admittance to the middle Asia and Western Asia marketplaces. The projectforeseemounting a widespreadcontactroads, connecting all countries of Middle Asianneighboring China, whilecivilizing the present road system with Gwadar deep seaport of Pakistan. Chinese has made openhandedpropose to Pakistan’s business industry on a lot ofcircumstances to acquirebenefit of the speculation and other financialchances that subsist in its westregions. Such arrangements would assist in prospectjointSino-Paktraderelationships and growingcontacts among people of both states.

The foundation stone of foreign policy of Pakistan is its close uprelationships with Chinese. The community hasanenormouslogic of history at China. They by no meansoverlook the assistanceunmitigated to them in the 1960s by Pakistan. In his trip Premier Rongji, even asrecall Pakistanihelp to China and assumed:

“Pakistan isamongst the first states to foundpolitical and traderelationships with China. We can never disregard that it were our acquaintancesof Pakistan who provide us the airway primary to the rest of the globe at our most complicatedtime. We can neverdisregard that it was our friends who give us compactsupplies from Pakistan when Chineselegalchair was reinstate at the United Nations and shall never we disregard that it was our associates of Pakistan. Who yet again was keepingfairness;lend China steadfast and valuableprop up on problems with comportment on Chineseself-governingbenefits such as individualprivileges, the inquiry of Tibet and Taiwan. Such type of relations of good-hospitality not simply bringsprofit to our people but as wellcontribute to tranquility and growth in South- Asia and the globe at a great. The China’s community is arrogant of having such a valuable companionship and comprises full self-confidence in the progression of the two-sidedwelcomingrelationships in the new-fangled century.

Chinese areprepared to linkhands with Pakistan tocreateunrelenting to put up a brilliantprospect for the the entire friendly relationships and collaborationamidboth the states in the 21st century.”14

His commentsobviously spelt elsewhere the foundation on which Sino- Pakrelationships have beendeveloped, in spite of the dissimilarity in dimension and ideological organization of both the states. Pakistan as wellrecognized the long- lastingassistanceextensive by China in everyfield, particularly in amplification the protection of the state. Pervaiz Musharraf told, “Chinese has suppliedthe entire the supportwhich Pakistaniwanted in all grounds of actions and we are arrogant of that and we are tremendouslythankful to them”.

2.11.2 Pervaiz Musharraf, President of Pakistan visit to china December 2001.

General Pervez Musharraf, the President of Pakistancompletedfour- dayformal visit to China from 20-24 December 2001, in association with the revels of the five decades of political and traderelationships between both the states. The talks were held among the Jiang Zemin Chinese President, Zhu Rongji the Prime Minister, the president of Pakistan and other leaders from China. Both the countriesenclosedtwo-sided, local and globalproblems in their deeply and wide- rangingmeeting.

The president of Pakistan restated that Pakistan considered China the same as itsmainsignificant and responsiblecompanion and the encouragement of welcomingrelationships with China is the foundation stone of Pakistani foreign policy.

14) Fazal-ur-Rehaman, ‘Pakistan-China relations in a changing Geo strategic environment’, Strategic Studies, Vol.XXII No.2 Summer 2002.

Jiang Zemin Chinese President, asunderlined the significance of Pakistan’s visit to China, believed it would go anextended way just beforesupplementary the ‘all-inclusive partnership’ amidboth the countries. China, he further, was organized to unite the efforts of the Pakistani Govt and the public in bringing anall- inclusiveaffiliation between both the states to a new-fangledelevated in the latest century. Jiang Zemin the Presidentadditionallysupposed that Chinesesput together great significance to mutualcollaboration in the financialand trade fields and look upon it as a key constituent of the entireassociation. He believed China isgeared up to carry onthesupport to Pakistan and, by an energetic and practical approach, enhancebilateral economic and tradecollaborationas to promote the two states and its community.

On the monetary front, both the countriesdetainedall-inclusivedeliberations, and inkednumerousaccords for financial and scientificcollaboration, such as progress of hydel energy plants, organization of energycommunicationline uprapidimprovement of Saindak and enterprisecombinedstudy for the expansion of technology and science. Musharraf and Jiang were therethroughoutthe ceremony.

The then Shaukat Aziz, Finance Minister of Pakistan in his interviewexposed the detail of the 350 million US $assistanceunlimited to Pakistan by the government of China, together as loan and grant. The assistance he further detailed would be consumed in the finishing point of enduringprojectundertake with the China’ssupport in a variety ofdivisions of the state. The government of China as well proposed to change the temporaryloan into middle-term loan to assist Pakistanireimbursement in simplepremium.

By a vision to increasingfinancialcollaboration, while speak to the meeting on ‘encouragement of Investment and TradeinvolvingChina and Pakistan in Guangzhou, on 24th December, President pervaiz Musharraf publicizedfirmencouragement for China’s business persons, invited them to empower in Pakistan. President Musharraf outlines what incentive Pakistan willgive to the China’ssponsors:

1. A selectedregion for China’ssponsorstarting Guangdong, as an exclusive economic zone intended forsurroundingsproject as combinedendeavor with a 100 %excellence.

2. To put up abusiness park for the growth of the silk-dispensationtrade and to allotaprivilegedregion in the export-dispensationregion in Karachi, to assist China’ssponsorsput up tradeabsolutely for export.

3. To generate for the China’ssponsor a ‘single-shop’ overhaul from the Board of speculation to make easy their employment. 63

He highlighted that China and Pakistan andshouldexpand investment and trade between both the states.

2.11.3 President Pervaiz Musharraf’s visit November 2003

A combinedaffirmation on instructions of mutual Collaboration was inked by President Hu Jintao and President Musharraf on 3rd November 2003. It was in realityanall-inclusive roadmap for determination the prospectcourse and extent of Sino-Pakmutualrelationships. The Declaration obviouslylaidimportance on increasingfinancialcollaboration, asongoing defence collaboration and institutionalizationmechanism for combined of outstandingconnection. The affirmation also reflects the harmony of visions on problems of commonwelfare in the local and globalframework.

2.11.4 Shaukat Aziz, the Pakistani Prime Minister Visit to china December 2004

In his visit comprehensiveindulgent and joint trust prevail on all issues of commonattention. Both the statesinked seven accords in the trade, energy, communication divisions and draw up a structure for superiorcollaboration. These accordsenvisionenhance in mutual business, furthermoreprogress on special trade accord, set up of combined agro-standcommerce and improved China’sventure in Pakistan. In twist, Pakistan announcesfreemarketplacefinancial systemposition for China. As well Chinesededicatedto give 150 million US $ for nuclear power plant at Chashma (phase II) 15. It was anelement of privileged purchaser credits of 500 million US $ to be supplied by China’s govt for speculationall the way through China’scorporations.

Solitary of the centeralaims of earlierPremier Mr Shaukat Aziz’s trip was to convince the China’spart to sell abroadresources to Pakistan separatelystartingcommodities. He was of the view that Pakistan haveagreed a freshway to its relationships with China by putting downbetterspotlight on financialcontact and departing for a win-win circumstances.16On thatoccasion China’sventure in Pakistan beabout US $, 4 billionand at smallest amount 114 Chineseplan were occurrence.17

15) Chashma Nuclear Power Plant (Chashma-I) was started in 1992 with the help of People’s Republic of China. 16) The Nation, Dec 18, 2004. 17) Behzad alam Khan, “China-Pakistan to strenethen defence ties”, Dawn, Dec 17, 2004. 64

The China’spart also granted that the mutual Economic chargemust soon appraisal Pakistanisuggestions to set up a SinoPak combinedventurecorporation and organization of a combinedcommunicationsgrowth fund for speculation in Pakistan which was consequentlybuilt-in in July 2007 with an approvedassets of 200 million US $. The business was a combinedbusiness enterprise in which fairness is similarlyadded by the Govt of Pakistan and CDB.18

Shoukat Aziz Former Prime Ministeras welllay the basis of greatlyappointed in Shanghai the Pakistani consulate.

2.11.5 Wen Jiabao Chinese premier visit on April 2005

The earliestformal visi of Chinese Premier Wen Jiabao in which both the statesinked21 MoUs and aconcords on collaboration in the financial, energy, defence, social, infrastructure, education, higher education, health, accommodationsectoramongst other area. Both the countriesas wellinked an “Agreement of companionship, collaboration and excellentfriendlyrelationships” and an accord on “fightingviolence, radicalism and separatism”. In the accord on “Early yielded Programmes” Chinesedecided to go and getnil all tax on 767 objects. This is the initialtread in the direction ofsetting up a FTA between both the states.

Wen Jiabao the Chinese Premier also attend the Sino- Paktradecollaborationsymposium and deliver a dialogue on the financial and trade collaboration between Pakistan and China. The Prime Minister Wen accomplished three proposals on how to additionalincrease the possibility of mutualbusiness and funds:

I. “To hold prompt to the cod e of egalitarianism and mutual achievementsand contribute to harmonizingcompensations.Pakistan is enjoyingplentifulpossessions. Chinesepossess the appropriatetechnology and expansionfamiliarity. Chinese will struggle to optimizeSino-Pak trade organization and get better the trade disparity with Pakistan. Chinese will vigorouslygive confidence the spiritedendeavors to spend in Pakistan as a result to attain win-win consequences and generatefurtherjobchances in neighboringregions.

II. To reinforceinfrastructure and interactions and developchances for tradecollaboration.

18) Pak-China Investment Company Limited. 65

The govts of both statesmustconstruct a stage and makechances to encourage the foundation of collaboration and infrastructuremeans. The replace and collaboration between projectsissignificantpillar of Sino-Pakfinancial and businessrelationships. Chinesepersuaded the enterprise of both states to make strongertogetheradvantageouscollaboration and find out from every one other for universalgrowth in a way that improvedcomply with the regulations of bazaarfinancial system.

III. To enlarge the collaborationground and look for for diverseresources of collaboration. The recognizedcollaborationoriginmust be hardened. The collaboration in such field as economics, cultivation, science and expertise, should be prolonged and the collaboration in innovative fields constantlysought after, such collaborationresources as cooperativeproject, solitaryoverseaspossession, rent, teaching and constrictingexploreenergetically so as to insert new vivacity to Sino- Pakfinancialand businessrelationships.”19

. 2.11.6Pervaiz Musharraf, President of Pakistan visit to china February 2006

while a consequence of the concentrated attempts and fortitude to improvefinancialcollaboration, when ex- President Pervaiz Musharraf made a visit to Beijing in Feb 2006, the businessamidboth the states had been recorded a continuousdevelopment 1.4 billion US $ in 2001, 3 billion US $ in 2004, 4.25 billion US $ in 2005, and 5 billion US $ in 2006.20The President Pervaiz Musharraf, as highlighted the purpose of his tripbelieved, “The trip was intended at lifting the stage of financialcollaborationamidboth the states to create it well-matched with the brilliantpolitical and trade ralations”.21

In view of the China’s Customs Authority, “Pakistani exports to China demonstrated an aloftdrift, recorded an enlargement of about 39.2 %in the year 2005. The exports amount to 832 million US $ from January to December, 2005. As it was upto 594 million U.S dollars in the durationthroughout the previous year (January-December 2004). So, the boost in Pakistani exports to Beijing in duration of one year is amount to aproximately 238 million US dollars.” During Pervaiz Musharraf’stripboth the states signed one MoU and 13 concords andintended at boostmutualfinancial and tradecollaborationthough covering a broadarrayof problems, counting economic and tradecollaborationwhilecollaboration on power, transport, cultivation, healthinessinhabitants, meteorology and seismology. Ex- President of Pakistan, Pervaiz Musharraf as wellexposed that a viabilityresearch was to beperformed to createSino-Pak energyand trade pathway”.

19) Wen Jiabao addresses China-Pakistan business cooperation conference, raising three suggestions on the economic and Trade Corporation, April 7, 2005

20) New hights of Pak-China ties, Mehmood ul Hassan Khan, March, 5, 2006. 21) The News, February 23, 2006.

2.11.7 China’s President Hu JintaoVisit to Pakistan November 2006

Mr Hu Jintao President of China, visitet Pakistan on November 2006 and was a reflection of China’s growing economic relationships with Pakistan. Both the statesdecided to counterfeitfasterfinancial and trade ties as well as signed a Free Trade Agreement (FTA) which became operational on 1st July 2007. Both the countries have granted to extent own custom dutiesupto 0% on 5,104 taxoutline (goods) in 03 years as of and on 3,942 objectsas of 0 to 5% in five-years from the date implementation on the agreement started. Both the statesas wellgranted to enlargemutualbusinessupto 15 billion US $ in the subsequently five-years from current US $ 5 billion plus. During the Chinese President’s visit, the two sides signed 18 agreements and MoUs covering a wide range of issues. They decided to put trade in services on the fast track to make FTA on goods and services more comprehensive. President Hu Jintao’s visit to Pakistan was aimed at consolidating the previously agreed economic cooperation initiatives.

President Hu also inaugurated the Haier-Ruba financialregions. On the opening ceremony, he stated: “the Haier-Ruba Financial Zone is amongst the primaryforeignindustrializedregionsrecognized by China. It is not merely the mainmanufacture based of householdappliance in Pakistan, but as well the primaryindustrialized zone together set up by Pakistan and China. It positioned as a sign of deepenSino-Pakfinancialcollaboration. Within four years, Haier (Pakistan), as a Chin-Pakistancombinedendeavor, has accomplishedinspiringconsequences by plummeting innovative and qualitygoods. The corporation is the principal air- conditioner manufacturer, the nextmajorwashing machinesmanufacturer and the 3rd biggestmanufacturer of refrigerator in Pakistan. Haier is flattering a home appliancesgiven name in Pakistan. This is an admiration for Haier, a success for Pakistan and a productive outcome of mutually beneficial cooperation between the two countries.”

2.11.8 Shaukat Aziz the Pakistani Prime Minister Visit to China 2007

Likewise, Shaukat Aziz Pakistaniprevious Prime Minister made a visit to China during 16th-20th April 2007 and signed 29 agreements mainly related to cooperation in economic, energy, defence and infrastructural projects, including construction of a new US$100 million international airport at Gwadar. The visit was termed a new chapter of financialcollaboration between both the states. Expressing his trip a great success, former Prime Minister Shaukat Aziz said: “We have re- energized the already strong mutual bonds, the effects of which would soon be witnessed.” 67

While the signing of the FTA has created many opportunities of economic cooperation to Pakistan, it has posed many challenges as well. It was perceived by many Pakistani analysts at the time of signing that Pakistan may not be able to take full advantage of the FTA with China unless it planned to expand and diversify the base of its exportable items to China. It was also feared that Pakistan may not be able to protect some of its small and medium size industries (such as the shoe making industry, small engineering goods, electronic goods) against Chinese low priced exports, since these cannot maintain a competitive edge over the low-price Chinese products and as a result the balance of trade would further plunge in favour of China.

Pakistan still has to enhance its exports to China in order to have a harmonious economic relationship. In this regard, both the countries have done trying their best to implement the Plan of Five Yearsenlargement on Economic and Trade collaboration, signed in November 2006, which will result in initiating several cooperative projects. Special Economic Zones for Chinese business, such as the Haier-Ruba Economic Zone have been established. One of the measures in addressing the issue of trade imbalance would be to attract the Chinese private sector investment in export oriented joint ventures in Pakistan.

In the nextdays there has been customaryreplace of sophisticatedmutual visits and each visit has resulted in the signing of a number of agreements and MoUs. However, it has been noticed that the implementation on these agreements and MoUs is painfully slow and not corresponding with the intended pace of progress.

Chapter-3 Current Areas of Co-operations

3.1 China- Pakistan Investment Company Limited (CPICL):

China- Pak Investment Company Limited (CPICL) subsist a Financial Growth Institute (FGI) builtunderneath the proposalin use by Govt of China and Pakistan supported for expansion of Pakistan in the field of investment, economics and trade particularly.

The corporation was built in July 2007,byasanctionedresources of 200 Million USD and beofficiallystarted in December, 2007. The corporation is a combinedendeavor in which evenhandedness is similarlygiven by Govt of Pakistan and CDB (among the largest banks of China).

The corporation in vision of its inherentpower and approvalused to enlarge into a hub for assumptionaction and set inworth to segmentsalikeIndustry,Agriculture,Information, Servicesand Technology, Manufacturing,Real Estate and Infrastructure , etc, intended for which we suggestcautious and ingeniousresolution to sponsors and strategyduring anentirearray of benefitstock services.(1)

3.1.1 Structure of Company

Pak-China Investment Company Ltd. had been subsidized by:

3.1.2 FinanceMinistry of Pakistan

The department of Finance representsthe Govt of Pakistan. The Ministry has been represented by three directors together with the respectable Finance Minister hold the location of the Chairman of the board of directors. The Government of Pakistan hadfurthermorerecognizedanalogoustriumphantventure with other countries and played asignificanttask in setting the policies for the state.

3.1.3 China Development Bank

China Development Bank (CDB) is a leadinginstitutecurrently with 32 twigs and four diplomat offices crosswise China. CDB wholepossessions had grown-up to USD 400 Billion at the ending of 2007.

(1) Pak-China Investment Company Limited, at http://www.pakchinainvest.com.

It has been followed carefully China’s macroe-conomic policy and conceded macro-control function in prop up of national economic perfection and tactical structural re-adjustment.

CDB is a main player in long-term finance for the key project and helpfulbuilding in infrastructure, fundamental and pillar industry, which are essential for the expansion of the Chinese financial system.

3.1. 4 Mission of the Company:

It would be a channel of speculation flow by suitable prime advisors for investors from China and Pakistan.

Recognize and exploit on opportunity in Pakistan by leverage on Chinese, financial resources and entrepreneurial expertise,technology.

It proves to be a catalyst of accomplishment for our customers by respond for their requirements and expand a permanentassociation.

Generate a culture of performance integrity, efficiency and productivity performance and move forward are the hallmarks.

Put togethercircumstances of the art expertise platform and application.

Generate excellentoutcome while keeping insuitablethreatlevel.

3.1.5 Vision of the Company:

To develop into a foremost DFI as a center of speculationactions for Pakistani & Chinese entrepreneurs throughout our in-depth market familiarity.As long aspioneering financial solutions through outstandinggroup, proficientprocess, inventivesolution and consumer relationships.

3.1.6 Culture andValues of Company:

A set of five nucleusprinciples is base on the reality which reflects the actualcivilization of our trade, which explains the demeanor and approach of our people towards each others and the consumers. Each personnelarededicated to carry out these principles to construct “Pak-China Investment Company” a sustainable and feasiblefinancialorganization.

3.1. 7 Core Values of Pak-China Investment Company Limited

Above all, we are dedicated to inculcate honesty in all that we do, for eternity, far and wide 1.Honesty based on loyalty to ethical and moral values.

Require us all to be trained from each other and to contribute our skills and possessions to attain our managerial objective. We are dedicated to 2.Team Work permanent erudition, a consumerist, determined courage and a sympathetic job place.

We esteem the self-respect of every person and are familiar with every person’s worth and innate prospective. We endeavor for open and earnest 3. Respect communication and are pleased about multiplicity of opinion.

We suppose fervently in what we do, not at all to conciliation our standards and principles, careful devotion to everlasting courteousness, integrity, and 4.Professionalism liability in one's transactions with consumers and acquaintances, plus a level of excellence that go over and above the profitable consideration.

We encourage persons to expand the capability to keep fit self domination. In order to embed honesty and moral demeanor, our workers are buoyant to cultivate momentous sense of individual 5. Responsibility responsibility; with an administrative hub towards rising and implementing unambiguous strategy to bring our company principles to life, making them concrete and an essential part of an employee’s aims.

3.2 New Proposals & Projects with Sizeable Chinese Investment

In a commondeclarationissued at the ending of Premier Shaukat Aziz's formal visit to China from 16 – 20 April at the invitationof WenJiabao the Chines premier;both the coutriesrestated that the customary and traditional companionshipamid Pakistan and China is a form of welcoming co-existence amongrisingstates and between adjacentstates. Formal discussions were held with Premier Wen Jiabao. Shaukat Aziz as wellmeets with Hu Jintao the Chinese President and other leaders of state. He also made a visit toChengdu. He launchednew-fangledPakistan’s Consulate General at Chengdu and PakistaniresearchCenter in Sichuan University and Peking University. (2)

2) China ECC, May 20, 2007.

He haswidespread relations with China’scorporations and economicorganizations. Meetings between the Premier and the China’s state directors were differentiated by largeaffection and companionship. Mutually were arrogant of their all-weather comradeship and multi-dimensional collaboration Chinesebelieve Pakistan the same asanexcellent good friend,neighbor, good partner, brothergood and visions its relationships with Pakistan starting a tactical and long-lastingviewpoint.

Companionship with Chinese is the foundation stone of Pakistanialienguidelines. This evergreen and time-tested comradeship is deep- rooted in the feelings of the Pakistani people. Mutuallythey are strong-minded to further morelift up their comradeship and tacticalaffiliation. Pakistaniresolutelyupholds the one Chineseguiding principle and considers Taiwan an indissolublefraction of the China. Chinesearedefinitelydedicated to prop up Pakistanilabors to defend its dominion, regionalveracity and self-government, the commonspeechunderstood.(3)

Both the statesdetermined to become deeper and widen their strategicfinancialcontract to achievemutualprogress and wellbeing of their community.

In this framework, they fastenhugemagnitude to the 5-year Enlargement Programme on financialcollaboration, the two-sided FTA, the combinedspeculationcorporation, the overhauldivisiondiscussions and furthermoredevelopment of plancollaboration, mutualventure, reserves and economic and bank sectorscollaboration.

They fastensignificance to the timely achievement of the mutual-research on Sino-Pak Trade and Economiccollaboration. Both the statesapproved to take furthermoreeffectual and realisticstepladder to encourageplanof collaborationbeneath the 5-year Enlargement plan on financialcollaborationparticularly in Manufacturing, Agriculture, Automotive, Infrastructure, Textiles, and Public mechanism, Energy, Minerals, IT & Telecom Services, Education and Commerce andsegments.

Both the statesrenowned with happiness the substantive conclusion of the 13th sitting of the mutualcommission on Trade, Economic, Scientific and Technical collaboration, held in Beijing at China on9th April 2007. They welcome the sign of the plansaccomplishmentruling for the 5-yearsenlargementplan on financialcollaboration, which is a newmainfootstep to encourage wider, deepening and elevatedpointSino-Pak economic and collaborationby a vision to achieve the objective of commonremuneration, win-win and regularexpansion.

3) Pakistan’s PM Gilani concludes successful visit to China Oct 16, 2009.

Both the countriesapproved to build up an over-archstructure for numeroustypes of developmentinvestments. Both sides will energeticallysmooth the progress ofcollaboration between the monetaryinstitutes of twostates and make effectual use of the principalmarketplaces of both the states.

Both the statesapproved to holdcustomary meetings of the monetarycollaboration Group intended forefficientsummarize and completion of the Five-Year development Plan.

In view of the mutual statement, China’scorporation and monetaryinstitutes will be confident to contribute in the growth of hydro-power schemes in Pakistan and the Pakistanipart will givethorough information resting on the apprehensivedevelopment. Both the countriesdeeplyappreciated the mutualcollaboration in speculation and decided to start on the Sino-Pakmutual Investment Corporation in July, 2007.

It isdetermined to set upfunctioningrelationsamid the Chinese Agency for Investment support and Pakistan’s Investment Board. It was decided to improvedevelopmentcollaboration in the power and mineral depositsdivisions.

Both the statesgranted to supplementaryschemescollaboration for looking at, dispensation and expansion of mineral deposits. Both the states welcome the beginnings ofdiscussions on employment in services and strong-minded to rapidityupbeatthe processof deliberations. The Free Trade Area on possessions will be outfitted on 1st July 2007.

It is also approved to encourageunprejudicedenlargement of business in an endeavor to attain the businessgoal of 15 billion USDupto 2010. It was alsodecided to set upInterchange of Electronic Data (IED) structure to ease the increase of business.

To become deeper and widen their plannedfinancialcommitment with a vision to promotegeneralprogress, a collaboration and discussionsystem was approvedin the lead between Chinese Reform Commission, the National growth and the plant commission for Pakistan. To entirelyinfluence the normalfinancial complementarities between China and Pakistan, both the countriesapproved to work in the direction ofencouraging the expansion of neighboringareas.

Pakistan will give overland admittance for China’s imports and exportsviathe ports of Pakistan. It was approved to increase "Connectivity" throughintensificationcontact and transportassociation. Be acquainted with the significance of encouragingeconomic and depositorydivisioncollaboration, togetherapproved to promote their personaleconomic and bankinstitutes to set upsupportiverelations.

China’s bankingwasinviting to set upfunction in Pakistan. Both the stateswelcome theinking of collaboration conformity between the Stock Exchange at Shanghai and Stock Exchange at Karachi. Pakistanielevationarticulated its appreciation to the govt of China and citizens for the compassionate and rebuildingsupport in the wake up of the tremor and alsowelcomed the conclusion of the Chinese govt to prop uprebuildingschemesatMuzafarabad, by utilizingthe 300 million USD privileged exportsbuyer credit. It subsists furthermoreapproved to rapidity up the building of hospitals and schools in Mansehra constituency. Both statesgranted to ease and make stronger private zonecollaboration.

The China will give confidence and prop upproficiententerprises to spend inPakistan mainly in the regions of automobilemanufacturing, fertilizer, chemical, textile, light industry, machinery and home appliances.

China and Pakistan approved to improve their collaboration in the field of elevated technology and approved to build upsecurecollaboration between applicableinstitutes in the countryside of maritime promote mutualtechnical research and improvement and its function in manufacturing and cultivation.

It was decided to put into practice the plan for the re-construction and intensification of seismic set of connections. Both the countriesattachbigsignificance to enlargementinteractions and collaboration in learning and individualreserveprogress. Chinese will enlarge 130 education facilities to Pakistan in the fields of financialadministration, investment and trade, tourism, finance and contractual schemes. Chinese will as wellassist Pakistani set up amanufacturing Technology University. Both the sides will getconstructivecontemplation of growing the figure of undergraduates and appointed scholars in the replaceseries as circumstancesconsent.

They welcome the organization of the Pakistani Study Centers at the Sichuan University and Peking University mutualrelations between the Sichuan University and Punjab University, the Pakistan’s Foreign Service Academy and Foreign Affairs University of China and the Pakistan’s National Defence University and theChinese CPC Party School.

Both the statesdecided to furthermoredevelopedifyingacquaintances and collaboration. In this situation, they welcomethe intention of Pakistan to put up an art, Cultural and Film Academy at China and establishChineseConfucius Institute and Friendship Centre at Pakistan.

By a vision to attractive people-to-people get in touch with and to expandtwo sided tourism, it was approved to furthermorebuild upmutual tourism collaboration

74 and increase the tourism marketplaces in an attempt to realizegeneralenlargement of their tourism trade.

Both the statesarticulatedcontentment on the close upcollaborationamong their defence agencies. Both the states will further developinteractions and collaboration in the military amd defencepastureswhile collaboration between their relevant defence manufacturing.

Both the countriesrepeated their obligations to contest all types and materialization of intimidation and to take upinclusiveprocedures in this stareinked the Agreement on Common Legal Support in Immoral Affairs.

Both ther stateshavecamaraderie of view on global and localproblems. They have decided to work particularly at the UN and in additionalpolygonal fora to encourageinternationaltranquility, solidity and for the presentlydeclaration of divergence and dispute in a variety ofcomponents of the globe.

Both the states will narrowlycollaborate and co-ordination on all significantlocal and globalproblems, as well as UNAlterations.

3.2.1 Wen Jiabao Chinese Prime Minister Visit to Pakistan:

During the China’s Premier Wen Jiabao Visit 13 Documents were inked which are given below:

1. Agreement on construction of growing and deepen Bilateral Trade and Economic collaboration.

2. Agreement on construction of collaboration among the Defence Ministries of both the states.

3. Agreement on construction of collaboration in the power sector between the Ministries of Natural Resources, Petroleum and Natural growth and restructuring Commission.

4. MoUs on occupational educational institutes between the China’s Ministries of Manpower, overseas Pakistanis and Labour.

5. MoUs among the Ministries of Communications of Pakistan and Ministry of China on collaboration in reconstruction of Karakoram road.

6. MoUs on collaboration in pesticide managing among the Agriculture Ministry of China and Food, Livestock and Agriculture ministries of Pakistan.

7. MoUs on collaboration amid the Ministries of Health of both the states.

8. MoUs on collaboration amid the China’s Commission for Family Planning, and Pakistan’s Ministry for Population and wellbeing.

9. MoUs amid Ministry of Agriculture, Livestock and Food, of Pakistan and China’s Ministry of Agriculture on collaboration in the Field of Fisheries.

10. MoUs on beginning the combined Five Year Plan for joint Economic and Trade collaboration amid China’s Ministry of Commerce and Pakistan’s Ministry of Commerce.

11. MoUs on collaboration in the ground field for study of Earthquake.

12. MoUs on collaboration in the Technology and Meteorological Science amid Metrological Management of China and Meteorological Department of Pakistan.

13. Agreement on common Loan interpretation use of the privileged Credit of Buyer’s to the Govt of Islamic Republic of Pakistan from the Govt of the People’s Republic of China amid EAD and EXIM a Bank.(4)

Likewise, Shaukat Aziz Pakistani previous Prime Minister made a visit to China during 16th-20th April 2007 and signed 29 agreements mainly related to cooperation in economic, energy, defence and infrastructural projects, including construction of a new US $100 million international airport at Gwadar. The visit was termed a new chapter of financial collaboration between both the states. Expressing his trip a great success, former Prime Minister Shaukat Aziz said: “We have re- energized the already strong mutual bonds, the effects of which would soon be witnessed.”

4) Pakistan’s President Zardari invites Chinese entrepreneurs for investment August 26, 2009.

Pakistan still has to enhance its exports to China in order to have a harmonious economic relationship. In this regard, both the countries have done trying their best to implement the Plan of Five Years enlargement on Economic and Trade collaboration, signed in November 2006, which will result in initiating several cooperative projects. Special Economic Zones for Chinese business, such as the Haier-Ruba Economic Zone have been established. One of the measures in addressing the issue of trade imbalance would be to attract the Chinese private sector investment in export oriented joint ventures in Pakistan.

3.2.2Supplementary Investment by China in Saindak Gold Mines&Copper:

China is likely to spend $25 million to expand the existing constructioncapability of the Saindak copper project by 30 per cent within a period of one year. Pakistan exported copper worth more $30 million to China during four months, (July-October) last year from the plan which is a combined venture between the two countries.

In Chinese the project services consisted of unlockdike mine, concentrator and boiler smelter with a capability to yearly production 15,800 tons of blister copper contain2.8 tones of silver and 1.5 tons of gold. The maximumcurrentsetting up includes crushers, smelters and additional plants.

The Saindak mining company, MRDL, extracted 18,000 tons copper upto September, 2004. It is a supplementary of the MCCworking the scheme, with an earlyspeculation of $26 million since August, 2003. (5)

The annual export of Pakistan’s copper to China is probable to attainabout $70 million by the ending of December, 2005. The copper exports amount to 48 million USDexclusive of Jan - Aug 2005, according to the Chinese Customs officials. As compare to the earlier year, the copper export shows anincreasingtendency.

Saindak is the primary non-ferrous producting plan. It plays a significantrole in economic growth of Pakistan, as wellconvention some of the growing copper requirement of China. According to an estimation, China’s requirement for copper products in the last decade grew by additional than nine per cent per annum.

There was due to the sturdyrequiring from China that Chile’s copper export profits doubled in October, 2004 from the similar month last year to $1.433 billion. In 2003, China frenzied 2.5 million tons of copper, secretarial for 16.5 % of the world’s entirety and status the second following the USA.

5) Syed Fazl-e-Haider, published October 31, 2005.

The Saindak chronicle is as well a story of economicmisconduct and managerialexploitation by government planners and financial managers in Islamabad. A developmentinitiallyexpected to cost of Rs6 billion endeding up estimate more than Rupees 14 billions. It cut down to the assortmentby the Government of Musharraf to drag the development out of the pessimism.

China-Pakistan had been inked anofficialagreementvalue350 million U.S dollar for expansion of Saindak goldcopperdevelopment. In view the agreement, the Chin’scorporation will compensate 500,000 dollar per month to Pakistani governmentfor upcoming 10 years in addition 50 % of wholeprofitsas of mineral business. The Government of Balochistan will as wellobtain $0.7 millions per annum aspayment.

“The corporation has also paid $13.4million as presumptive excise and $6milliongrowthappendageduring the periods of 2002 to 2012,” the spokespersonsupposed.

He told the corporation has been provided thatshortest employment at the location and approximately 1600 local inhabitants were implicated in extracting and operating the plant. The spokesperson furthermorebelieved the corporation was also spending Rs206.9million to promote schools and health services, provide scholarship to deprive and brilliant local students and intake water and additionalamenities to villagesin the region of the Saindak mining project.

3.2.3 Metallurgical Corporation of China Limited (MCCL):

Previously there has been a demand for establishment of a refinery plant at Saindak. The choicefor the utilization of the capability of Iranian refinery was opened, which would confirmreasonable as locatedcrosswise the boundary. The China’sthoughplannedlater on to launch a refinery plant with the speculation of 30 million dollar. The refinery plant wouldsplitcopper from gold. (6)

The setting up of refinery plant willimprove the expenditure of manufacturing, while the expenditure of petroleum for energyproduction is extremelyelevated. Furthermore, the China is not bounce to set up a refinery plant by an agreementthey may export extracted copper to the whole world market frankly or they mightdecide onintended forpartition of copper and goldfrom a refinery plant. The corporation maintains its alternativeextensivereleased to guaranteeproductivity in this view. Ananalysistestimonystated that the copper of Saindak is of outstandingworth. By means of 30 % raise in manufacturing capabilityenvisage under developmentplan, Pakistani willdevelop intosolitary of significant exporters of copper. 78

6) Lease agreement on Saindak Copper-Gold Project under which Metallurgical Construction Corporation of China (MCC) was given a 10 yaers Lease to Mine & process Copper 7 Gold Ores at Saindak, May 11-14, 2001.

The copper metalis the deliberate by high-quality worth of its significantbelongingssimilar togood conduction, recyclable andconfrontation to decomposition.

A spokesperson for the MRDL owned by the Chinese government, told thecorporation had been provided Rs10 million to restart the Saindak plan and Rs15 million as the effectivemoney.

He had criticised what he called misinformationcrusadelaunch in certain correspondentsin opposition to the corporation and had claimed the corporation had as well paid $220m revenue to the federal government and $6m as rent out.

3.2.3.1 Saindak Copper-Gold Project (SCGP):

The Project of Gold and Copperat Saindak (PGCS) is a copper extracting scheme which is owned by Pakistani Government .The MCC holds Hong Kong co.Ltd and Petrolium Hong Kong Co.Ltd construct the schemefrom side to sidevia accord with the Govt of Pakistanfrom the year 1990-1995 on turnkey base. The project remained inactivetill 2002. Previously further to the MCC which won the bid and on the profitablemanufacture of the PGCS. The preliminaryday was 16th October 2002. The MCC is successively the planfruitfullyseeing asits beginning. The firstoutfittedcontractamidGovt of Pakistan and MCC was for the duration of 10 years upto 15thOctober 2012. The contract furthermorewas unmitigated for a duration of 05 years i.e. upto 15th October 2017. (7)

Metallurgical Corporation of China is consecutively the projectduring its contributing(Capital Development corporation Pvt. Ltd) MCC and MRDL, had been recorded with Exchange and Securities Commission for Pakistan.

3.2.3.2 Extraction of Copperin Afghanistan

ChineseMetallurgical Group Companyhadwon the bid for the expenditure of 909 million USD in 2007. At presentit is upsettingto the frontage with an extraction of copper developmentat Afghanistanin Aynak. There wasapproximately 3000 Afghaniemployees and Chinese engineers about 70 on situation In December 2009.

3.2.3.3 Extraction of Nickel in Papua New Guinea:

Ramu Nico company Limited ('Ramu NiCo') is presentlyconstructing a nickel excavation in loftymountainon peak of the River Ramu and dispensation plant on the shore Rai of the Madang area of Papua New Guinea. The company, RamuNico's website told the conglomerate is supported by' ChineseMCC and that at 1.4 billion USD its project is Chinaeseleaderoverseastaking outagreement. The corporationtold the project had a totalitystoreof nickel about 140 million tons and will have a excavate 40 years life.

7) China’s Annual Report-2014

The plan hadsparklediscussionmore than its bottomlesssea tailings taking awayproject, previouslyacceptable by the PNG component of Atmosphere and Fortification, and blastexertion to build the passage was cut short by an embargoat New Guinea in the National Court of Papua on 19th March, 2010.

3.2.3.4 Saindak Project: Workers and Local communityissuffering:

The Saindak-mines of Gold and Copper are situatednearby town District of Chagai the Saindak. The deposits of gold were recognized by two geologists in the year 1901. The discovery of gold deposit at Saindak was completed in corporation with a China’smanufacturingcompany in 1970. The project was started in 1975 but Pakistani engineers would not run the projectproperly. Then the planhesitated for a few years. Subsequent to that, Federal Govt rewarded the assignment to China. Sino-Pakinked a formal contractvalued 350 million U.S dollar for development of Saindak Gold- Copperplan. The excavation was lease for ten yearstenure to MCC (Metallurgical Corporation of China). According to the lease contract, 50% of revenue as of the mine go away to MCC, 48% go to the Govt of Pakistan, whereas 2% go to the Govt of Balochistan.

Currently, the plan is being administered by some 1,400 Pakistani and 350 Chinese workforces. There is a largedifference in salary of Chinese and Pakistani people in successionto the plan. China’s engineers have salary of about 1,200 dollarmonthlywhile, Pakistanisare getting salary just about 200 dollar. Employment in the plan is not on the base of merit;fairlypublic are chosen on the basis of nepotism and favoritism. China’sfeelings are similar to step-mother towardworkers and employees.Underglobalrule this projectmust have build a university for the region, hospital, school and communications for the local citizens. Though, this plan is just paying Rs. 8 million annually as scholarship to undergraduates of Chagai which are remunerated to links of influentialinhabitants and not the deprived students.

There isswarm of dilemma local populace of Saindak region suffers from. There is presently one school for six villages, 500 students are getting education starting this school. Presently there is no girl school in Saindak, neither government as well as nor private. There are 16 educators with too minuteremuneration. Educators are not considered to be fraction of company; instructors are not given additional benefit, health allowances, water allowances and houserental fee etc. As well, the high schools are short ofservices like science laboratory, equipment and border line.

E.D.O Yahya Khan Mengal visited Saindak Project School On 16th October 2014. Subsequent to that he meets the China’s Managing Director (MD) concerning school problemS. He enthusiasticallyhighlighted for boost up in the wages of school

80 teachers. He inquires Chinese MD to boost the instructor’s salary up to 100,000 monthly, specified the inaccessibility of the region. Furthermore, Yahya Khan

Mengal assured to build the Saindak plan school a government school, but this assurance was not at allwreckedwell.

Moreover quality of intake water is anenormousproblem for the employees. The water which is given to employees for drinking causea lot ofproblemssuch as, obesity, hypertension, stress, anxiety, laziness, kidneys failure, heart and stomach diseases. Recently two employees died of heart attack but the corporation did not provide ambulance to the victims. In addition local citizens are penniless of basicnecessities of their life such as nutrition, electricity and water. Until nowthe local employees are not given bread and curry from company mess.Unluckily, the media thenever give the reflection of a society neither givecoverage nor highlighted the surplus of problems in Saindak plan. They are revolvingasightlesslook to such a marginalizedarea. We diffidentlyrequest to the Chief Minister (CM) of Balochistan to visit Saindak plan to encompass first hand consideration of the terribleconditions there. There is immediatenecessity of take in and exploit on the disappointedcircumstances of people in the project.

3.3 Trade &Transit

3.3.1 The Free Trade Agreement (FTA)

Between Pakistan and China thewholemanuscript of the Free Trade Agreement was signed at Islamabad on November 24, 2006.

Preamble of the agreement:

TheGovernment of Pakistan (“Pakistan”) and the Government of the China (“China”) later will be called as “the contracting Parties”;

Devotedto strengthening the distinctiveconnection of comradeship andcollaboration betweenthe States;

Edifice on their respective privileges and obligation under the WTO accord andother joint, regional and mutualinstrument of collaboration;

Determined to encouragemutual trade throughout the organization of clear and jointlybeneficial trade regulations and the evading of trade hurdles;

be familiar withthat this conractmustapply with a viewin the direction ofbuild upthe principles of living wage, generate new employeechance, and attractiveregulardevelopment in such a mannersteady with ecologicalreinforcement and conservation; anddedicatedto promote the communitywellbeinginside each of the states; 81

Both the contracting parties have agreed as following:

Initial Provisions of the agreement

Establishment of Free Trade Area:

The contracting Parties to this contract, dependable with the Article XXIV of the the contract on Trade and Tariffs 1994, hereby established a free trade area.

Objectives of the Agreement:

The main objectives of the contract are as under:

Strengthening thejoint friendship between the Parties;

Persuade growth and diversification of trade between the Parties;

Eradicate hurdles to do business and formulatethe cross-boundary movements of goods between the contacting Parties:

Present fair-hairedcircumstances of antagonism for trade between the Parties

Launch a skeleton for additionalmutualfinancialcollaboration to develop and improve the advantage of the Agreement.

The Parties shall understand and be relevantto the provision of this accord in view of its objectives position out in paragraph 1 and in harmony with habitualregulations of explanation of public globalruling.

Relationship with Other Agreements

Both the Parties confirm their accessibleprivileges and obligation with reverence to allsupplementary under the WTO contract and furthermoreaccord to which both the contracting Parties are parties.

Implication of the Agreement

The untie trade area to which the Agreement imply consisted of the terrain of the parties with the omission of every part thereof which representdetachtraditionsterritory.

General Definitions of General Implication:

For the purpose of this Agreement, exceptor elseparticular: Daysdenote calendar days;

GATT: MeaningtheGeneral Agreement on Trade and Tariffs 1994.

Territory means:

(a). With respect to Chinese, the state of the People’s Republic of China, jointly withterrainarea, protectiveocean and any maritime areas ,internal waters, away from the territorial sea that, in harmony with globalrule and its familialrule, China might exercise autonomousprivileges or authority with respect to the sea, marine and subsoil and their innatepossessions.

(b). With admiration to Pakistan, soilstate, territorial sea as well as and any maritime area, internal waters and situated beyond the territorial sea which have been or might in upcomingwill be nominated under its nationalizedrule, in accord with globalrule, as aregioninside which Pakistan may work outeffectively and de jure supremeprivileges or jurisdiction with regard to the sea, marine, the subsoil and the innatepossessions;

WTO contractindicate theMarrakesh accordset up the Organization of WorldTrade, as completed on 15th April 1994.

And

CPFTA:Meansthe FTA between the Governments of Pakistan and China.

Market Access for Goods and National Treatment:

Scope and Coverage:

Excluding as provide, this sectionimplement to trade in merchandise between the Parties.

National Treatment:

Every Party shall contractnationwideconduct to the supplies of the newcontracting Party in agreement with Article-III of the GATT 1994, while itsannotations, and to this end Article-III of GATT 1994, its interpretativecomments, beintegratedkeen on and completeelement of this accord mutatismutandis.

Elimination of Tariff:

Apart from as or elsehas been provided in this contract, both Parties shall graduallyeradicate its import custom duties on suppliesoriginate in the regionof another Party in accord with Annex 1 of the agreement.

If a Party reduces its applied mainlypreferential nation trade in customs duty rate after the entry into power of this contract and previous to the end of the taxremovalphase, the taxremovaltimetable (Schedule) of that Party shall be valid to the cheap rate.

On the requirement of any contracting Party, both the contracting Parties shall discuss with each other to regard asspeed up the elimination of customs in trade set out in their schedule. An accord between the both the contracting Parties to accelarate the elimination of acustom duties in trade on goods shall exceed any duty fee or performancegroupindomitable pursuaded to their Schedule for such goodswhileallowed by each contracting Party in accord with their relevantaptlawfulactions.

1. Review and Alteration of Tax Reduction Modality and the Lists shall be as Follows:

Tax Reduction Modality and the lists shall be reviewed and modified every five years by the Board on Trade in Goods.

The analysis shall be undertaken on the foundation of welcomingconversation and lodging of the concern of the Parties.

The initial review and alteration shall be undertaken either at the end of the fourth year or on the beginning of the 5th year of entrance into operation of this Contract.

Either party may apply for an extraassessment at any time after coming into force of this Contract. Such a request shall be happily considered by the other Party.

Managerial Formalities and Fees:

Each contracting Party willundertaking, in harmony with Article-VIII:(1) of the GATT, 1994 along with its interpretive comments, so as to all charges and fees of whatsoevernatureenforced on or in connection with import or export are limited in quantity to the expectedexpenses of services rendermoreover do not symbolize an circuitousprotection to domesticcommodities or a responsibility of import or export for economicpurpose.

Each contracting Party shall buildavailablevia the Internet or comparable computerized communication systems a roll of the price tag and accuse and changes thereto levied by the central/federal Government, as the case may be, thereof in association with importation or exportation.

Termination:

Either contracting Party canend this agreementby printedannouncement to the other contracting Party. This agreementwillend 180 days later than the day of such notice.

Upcoming Work Program:

Unless otherwise approved by the Parties, they shall discuss trade in services after the conclusion of the discussions of this Contract.

Other Articles of the Agreement are as follows:

S.NO Article No Article Name 1. Article 1 Establishment of a free trade area 2. Article 2 Objectives 3. Article 3 Relation to other Agreements 4. Article 4 Application of this agreement 5. Article 5 Definition so general application 6. Article 6 Scope and coverage 7. Article 7 National treatment 8. Article 8 Terriff elimination 9. Article 9 Administrative fees and formalities 10. Article 10 Special requirements related to border measures 11. Article 11 Committee on trade in goods 12. Article 12 Definitions 13. Article 13 Origin criteria 14. Article 14 Wholly obtained or Produced Products 15. Article 15 Not wholly Produced or obtained Products 16. Article 16 Commulative rule of origin 17. Article 17 Product specific rules 18. Article 18 Minimal operations and processes 19. Article 19 Direct consignment 20. Article 20 Treatment of packing 21. Article 21 Accessories, spare parts and Tools 22. Article 22 Treatment of indirect materials 23. Article 23 Certificate of origin 24. Article 24 Review and modification 25. Article 25 Anti-dumping and countervailing measures 85

26. Article 26 Global safeguard measures 27. Article 27 Bilateral safeguard measures 28. Article 28 Definition of sanitary and Phyto-sanitary measures 29. Article 29 Objectives of sanitary and Phyto-sanitary measures 30. Article 30 Scope of sanitary and Phyto-sanitary measures 31. Article 31 Competent authority 32. Article 32 Transparency 33. Article 33 Cooperation of harmonization, equivalency and certificate recognition 34. Article 34 Committee on sanitary and Phyto-sanitary matters 35. Article 35 Definitions of technical barriers to trade (TBT) 36. Article 36 Objectives of technical barriers to trade (TBT) 37. Article 37 Scope and coverage of technical barriers to trade (TBT) 38. Article 38 Re-affirmation of technical barriers to trade (TBT) 39. Article 39 Cooperation area 40. Article 40 Transparency 41. Article 41 Implementation 42. Article 42 Contact points of transparancy 43. Article 43 Publication of transparancy 44. Article 44 Notification and provision of information 45. Article 45 Confidential information 46. Article 46 Definitions of investments 47. Article 47 Promotion and protection of investment 48. Article 48 Treatment of investment 49. Article 49 Exploration 50. Article 50 Reimbursement for losses and damage. 51. Article 51 Transport. 52. Article 52 Subrogations. 53. Article 53 Settlement of dispute among party. 54. Article 54 Settlement f disputes between investors and one party 55. Article 55 Other obligations consultations 56. Article 56 Cooperation of dispute settlement 57. Article 57 Scope of application of dispute settlemnt 58. Article 58 Consultation of dispute settlement 59. Article 59 Choice of forum of dispute settlement 60. Article 60 Good offices, conciliation and mediation 61. Article 61 Request for an orbitral pannel 62. Article 62 Compostion of an orbitral pannel 63. Article 63 Functions of an orbitral pannel 64. Article 64 Rules of procedure of an orbitral panel 65. Article 65 Expenses 66. Article 66 Suspension or termination of proceedings 67. Article 67 Experts and technical advice 68. Article 68 Initial report of orbitral panel 69. Article 69 Final report of orbitral pannel 70. Article 70 Implementation of final report of orbitral pannel 71. Article 71 Non implementation-suspension of benefits 72. Article 72 Compliance review of the orbitral pannel 73. Article 73 Private rights 74. Article 74 Establishment of the free trade commision 86

75. Article 75 Mandate of the free commision 76. Article 76 Meetings of the free trade commssion 77. Article 77 Annexes and footnotes 78. Article 78 Amendments 79. Article 79 Amendment of the WTO agreement 80. Article 80 Entry into force 81. Article 81 Termination 82. Article 82 Future work program

Doneat Islamabad, the capital ofPakistan on the24thNovember 2006 .It was made in duplicate.

The Agreement was initiated in duplicate in Englishand Chinese languages, together being uniformlyapplicable.

Commerce Minister: For and on behalf of the Govt of Pakistan.

Commerce Minister: For and on behalf of the Govt of the China.

3.3.2 Implication of Four – Nation Transit

Agreement 13-14 April, 2004 (China, Pakistan, Kazakhstan and Kyrgyzstan):

The Governments of the Kyrgyz Republic, the Peoples Republic of China, the Islamic Republic of Pakistan and the Republic of Kazakhstan (later will be called as the Contracting Parties), documented the prerequisite to encourage traffic in transit among the contracting Parties and desire to retain, enlarge and reinforce the accessiblepleasantrelationships have granted as under:-

Article – I:

All the Contracting parties consent toofferamenities for traffic in transit on routejointlydecided upon.

The Contracting parties consent to approve multi-modal transportationorganization to carry out the traffic in shipment. No difference shall be made base on the possession of the way of transportation.

Article – II:

The transportof commoditiestogether withluggage and car of one Contracting party through the terrain of the other contracting parties willbelievethe same as "Traffic in Transit".

Article– III: The transportation shall undertake by vehicles registered in the contracting parties. The organization of globalhighwaytransportationpermit shallimplement for the vehicles permitted for passage of traffic.

Article– IV:

The listing of boundarypost and the land route for travel in transportation is attached as Annex.

Supplementary routemight be decided upon among the Contracting parties from moment in time to point in time.

The actions for mannerof the transfer in consignment shall be decided upon by the skilled authorities of the Contracting parties.

Article– V:

No automobileduty and excise on transportationearn and revenue the territory of the transit states shall be levy on traffic in shipmentapart from charges for transportentail by traffic in transit or for the fee services render in accord with each country’s interior regulation.

Article– VI:

A Contracting party mightoblige toll taxes, together withhighwayrepairs fee, on means of transportation performing the traffic in transit.

Article– VII:

In array to facilitatingcarrage of goods in shipment, the tom’s authorities of the Contacting parties shall formulate as jointlydecided, regularethnicitymeasures and rules and regulations.

Article– VIII:

Each Contracting party shall Endeavour to develop the pavement infrastructure services in their territory, and supply at spot of entrance or depart, shed and unlockplaces for vehicle in transportationcoming up Customapprovalprior toforwardconduction, which shall be a charge service. For vehicle with dangerouscargo and discomfitedload separate measures will betaken. Article– IX:

Each Contracting party carries out to meet up the necessities of railway wagon, highwayvehicle and mercantileshipsubject matter to accessibility.

Article – X:

Each Contracting party agreed that railway goods, highwaygoodsmendacity, harbor and other charges payable shall not be take away favourable than those larges by the Contracting party on suppliesownto their national.

Article– XI:

Each Contracting party with a vision to facilitate the swift and proficienttransportation of cargo between the contracting parties agreed to take up a regular set of shipmentcomments.

Article– XII:

Each Contracting party have the right to implement all prohibition and limitations for the traffic and transportation, derived from their national regulations which are not merely those base on consideration of communalsafety, communalsanitation, communityethics or healthiness or veterinary or Psychopathological contemplation, trademark and exclusive rights but also those forced on financial or any additionalargument.

Article – XIII:

Each Contracting party propose each other capability of opentransportationcrossways their region for cargobelong to the Contracting partythe same as to the third party (which are not the party to the currentaccord) exclusive of smugglingcargo, military hardware and ammo, tranquilizer drugs, and also the supplieswhose import and export are outlawed by the rules of the Contracting party.

Shipment supplies, imported in accordance with worldwide radices of trade, customs rules and other international obligations will be sheltered by the Contracting Parties, through the region of which transit is taking place.

Article– XIV:

Issues which are not enclosed by this contract shall be established by mutual consultations between the Contracting parties.

Article-XV:

Each Contracting party shall assign Liaison Officer to look together into the working of this agreement and to refer for expeditious solution to the capable authorities of their own country, any question rising from the function of this

Agreement. The Liaison Officers of all contracting parties will meet as often as may be jointly agreed. Such discussion shall take place at least once in a calendar year.

In order to apply the current agreement the capable authorities of the contracting parties will meet to work out process and rules.

Article– XVI:

The Contracting parties agree to resolve any differences relating to the interpretation of this Agreement through consultations, and in the event of failure to reach a settlement to refer the matter to an arbitrator suitable to concerned parties, whose decision shall be binding.

Artlcle – XVII:

Amendments can be made in the current Agreement. Any planned amendment should be sent to the reservoir state who shall inform the Contracting parties.

Changes will be adopted by agreement of all the Contracting parties through signing of split protocols.

Article– XVIII:

The currentaccordmust come into force on the day of the last notice by contracting parties on end of lawfulactionsnecessary for the entering into force of the Agreement.

The notifications will be received by the reservoir state. The reservoir state will be the state on whose territory the contract will be signed.

Article- XIX:

The current Agreement must remainsapplicable for duration of 5 years. After that, it must be roboticallyaltered for a further phaseof 5 years, unless either contracting party gives extinction notice in writing to the others, 6 months before the end of the 5 years period the said Agreement.

Article– XX:

The current Agreement is open to other states, which can link it with the accord of all the contracting parties.

Article – XXI:

The agreement was done at Islamabad, the capital of Pakistan, on the 9th March 1995, in Russian, English, and all state’s language of the Contracting parties. All text’s being similarly valid.

The original copy is being deposited in the Islamic Republic of Pakistan which will send copies of it to the other Contracting parties.

For the reason of understanding of this Agreement the Contracting parties will use the English edition of the text.

Annex

Boundary Posts &Territory Routes for Traffic in Transit:

The contracting partiesdecided on the following routes and controlling boundary posts for traffic in transit. 1.Boundary posts

Pakistan:Sust and Karachi Port China: Khunjerab, Torgurt and Khorgos Kyrgyzstan: Torgurt and Ak-jol (Lugovaja) Kazakhstan: Georgijevka and Khorgos

2.Ground Routes

Ground Routes shall be temporarily agreed as under: A. Pakistan - China - Kyrgyzstan - Kazakhstan B. China - Kazakhstan C. China - Kyrgyzstan

The contracting parties recognize the need to keep up trade routes in journey worthy condition in their relevant areas.

Contract Minutes of Pakistan, China, Kazakhstan & Kyrgyz Republic Agreement 13-14 April 2004: 1. The functioning level conference concerning the Quadrilateral Agreement on Traffic-in-Transit among the Republic of Kazakhstan, the People’s Republic of China, the Kyrgyz Republic, and the Pakistan, was held in Urumuqi on 13-14 April, 2004. The following issues were discussed at the meeting.

2. Permits for Shipment Traffic;

3. Unification of the values of Vehicles’ dimension and load;

4. Shipment fees and toll charges;

5. The beginning of Traffic-in-Transit

6. After severediscussions, the following consensus was reached in a cordial and friendly environment.

7. Permits for Shipment Traffic.

8. It was also decided that Pakistan shall print the permits, and the international delivery notes shall be printed by every contracting country correspondingly. The other three contracting countries shall hand over their official stamp samples to Pakistan, and the permits shall be over printed with stamps on them together and delivered through political channels to the contracting countriesby Pakistan. The total number of the permits for shipment traffic for the year 2004 shall be 800 i.e. 200 for every country. Pakistan shall distribute the permits for year 2004 to the other associate countries not later than 30th April, 2004, and those permits shall be officially used from the date of 15th May. The 200 permits printed and dispersed by Pakistan in October 2003 were given back to Pakistan by the other three contracting countries through this gathering and were announced unacceptable.

9. Alliance of the Standards of Vehicle’s measurement and load.

10. It was decided that the measurement lengthwise of the vehicles busy in traffic-in-transit shall not go beyond 20 meters, width shall not surpass 2.55 meters, elevation shall not go above 4 meters, and the gross burden shall not go beyond 38 tons. For unseperatable largefreightextraordinary permits shall be applied.

11. Transportation Fees and Toll charges.

12. In sort todecrease the cost and charges and to improve the progress of Quadrilateral tariff-in-transit based upon the gathering held in Islamabad in August 2003, it was decided that road protection fee and shipment fee shall be exempted; toll road (bridges or tunnels) charges shall be collected in accord with the domestic linked laws and rules, and national action shall be given to the shipment vehicles.

13. The beginning of Traffic-in-Transit.

14. It was decided that the Traffic-in-Transit shall begin on 15th May, 2004 in accord with the values and spirits of the signed Agreement and this Agreed Minutes. The matter of amendments and supplements of the contract shall be established with future discussion. 15. It was done in quadruplicate in English language in Urumuqi, at China on 14th April, 2004.

16. Mr. Li Yanwu: For the Communication Ministry of China.

17. Mr. R. Jenalinov: For the Ministry of Transport and Communications, Republic of Kazakhstan.

18. Kyrgyz Republic Mr. J. Sadabaev: For the Ministry of transportation and Communications.

19. Mr. Atiq Ahmad: For the Ministry of transportation Islamic Republic of Pakistan.

3.3.3 Communications

China and Pakistan hadpromised to combat and overcome the three malevolence forces of terror campaign, extremism and separatism.It is highlited that the economic co-operation between both neighbors the significance of Gwadar deep sea port and upgradation of the Korakoram Highway is elaborated. Furthermore Pakistan and China also have planned to connect strategic Gwadar port with the broadend KarakoramHighway this link enhanced China’s economic links with Central Asia and West Asian regions with the help of Pakistan through these routes.China has also got the operational rights of Pakistanitacticalharbor of Gwadar, which throughoutaprolonged highway of KorakorammightuniteChina to a gateway of Strait of Hormuz, the Arabian Sea and for a 3rd of the worldtradesmear with oil.

3.3.3.1 Construction of Gwadar Port

Pakistan and China have a concensus that the trade in the Central Asia will be promoted, by developing the Arabian bottomless sea Gwadar port, in the South- West Pakistan’sregion of Balochistan.

The vice president of the moderate Baloch national party,Hasil Bazinjo,promotes Chinese investment in the port as local jobs will be created.The questions have been arosed that wheather Islamabad and China have strategic or economic objectives with the construction of the Gwadar port.(8)

8) Fazl-ur-Rehaman, “traditional & emerging areas of strategic co-operation between Pakistan & China”, strategic tudies, xxix, no 2 & 3, summer & autumn 2009, 41.

According to the statement China wants to utilize the part as an energy corridor for its west province of Xinjiang the Korakoram Highway (KKH), the highest paved international road in the world, was constructed completely in 1986 with the 20 years of rigorous efforts. The highway, which connects the northern areas of Pakistan to the old Silk Road,runs approximately 1300 km from Kasghar – acity in the Uyghur autonomous region of Xinxiang to Havelian located in the Abbotabad district of Pakistan.Recently the Chinese have engaged actively to wider the KarakorumHighway,from the presently 10 meters width up to 30 meters for the flow of heavy traffic throughout the calendar year.Recent plan includes the construction of Karakorum highway phase-II,Raikot to Islamabad 487 km which will be completed up toDecember 2017 with the cost of Rs. 379 billion.The highway runs through the confluence zone of Indian and Asiansub countries where the Pamir, hindukush, Kunlun, Karakorum and great the ranges of Himalaya are connected.China, Afghanistan, Tajikistan, Pakistan and India each had a highway of 250 km which can provide a link between the centralAsian states and China.

Pakistan and China have also planned to connect strategic sea port Gwadar with the upgraded Karakorum highway.This link enhanced the China’s trade links with Central Asia and west Asian regions with the co-operation of Pakistan.

This linkage is proved as a gateway to the land locked and resourceful central Asia for thewhole world and vise versa.China’s constructed deep sea port Gwadar would be beneficial for the improvement of Balochistan.

It would inhibit the dependency of China on the straits of Malacca and the Hurmuz straitsand will be the entrance point for energy supplies to China.Western China linking with the Arabian Sea means China’s shortest approach to the Indian Ocean as well as lorger trade benefits to Xinjiang.

China’s rail line is near to oprate to the regions of Kashmir which are under the actual power of Pakistan.Capital has awarded US $ 1.2 million consortium to an international firm, which will carry out the infrastructure study of this rail project.This rail links between Pakistan and China intends to connect Havelian the northern limit of Pakistan’s railways, to the Kashgar of China’s Xinjiang region via Northern areas of Jammu and Kashmir.This projected rail links will follow the korakoram highways route.In December 2017 the Haveliandry port construction including cargo handling facilities would be completed.

It is noteworthy that withmaking longer its East-Westernrailway track from the China’sboundarymunicipality of Kashi to Pakistan’s city Peshawar in north-western region from Karachi to Peshawar, Beijing could receive the cargo to and from Gwadar with the shortcut route. This railway live can’t only be used for the trade purpose but can also be for the transportation of energy from the Persian Gulf to Xinjiangsuch a pipe-line is not a suitablealternative.Pakistan’s railway link

would also enabled China to get rail link to Iran only the problem is rail gauge difference.

China has been involved in the construction of railway line from the North- Western city of Mashhad in Iran’s eastern border to the port of Chahbahar for the construction of the 1100 km long railway line, Tehran has negotiated with the two Chinese companies to connect Mashhad with Chabahar. Despite of road and railway links between Chinaand Pakistan,they committed to construct oil and gas pipeline from Karakorum to Gwadar and connect with land locked Xinjiang. There is a Chinese company which is monitoring the construction of pipeline which will carry the gulf oil from Gwadar to western China. This pipeline would not only lower down the costs and supply time but will be helpful to China to bypass Malacca straits.China has also plannedto construct oil-refinery and storage facilities at Gwadar.The Gwadar port project consist of Gwadar international air port east expressway bridging and berthing areas construction of break water channels and development of Gwadar city.

By the construction of railway line and oil-gas pipeline passing away from Pakistan’s Arabian Sea coast into the mountain’s passes between China and Pakistan.This would not only beneficial for China to raise economic range for better access to Middle East oil but it would also enhance the economic value from South- East the North-East end of Pakistan. The port of Gwadar has great importance strategically for China,Pakistan and Middle East oil supply.The plan has been made to construct pipeline and a railway line with the passage of Karakorum highway.This is the recent alternate of the ancient “Silk Road” and the same trade route via mountains. This project has animmense strategic value.

Presently China is intrested for the construction of TransHimalayan pipeline for Middle Eastern crude to carry towards western China.The pipeline will link with Pakistan’s Gwadar port, the port has been located at Gwadar city at the Persian gulf on Arabian sea and had a distance of 460 km from west of Karachi in Balochistan, Pakistan.The Gwadar is being constructed with the co-operation of China in two steps and has the characteristics of deep sea and warm water.The Himalayas route is challenging and much expensive and on one occasion the oil arrived atChina,be therecarried away to the country’s coastal areas, where its demand is centered. So it would reduced the oil shipped from the piracy prove Malaca straits which at present carries up to 80% of the imports.

Recently it has been considered by the Chinese authorities that it would be the part of great trade corridor. Chinaand Pakistan have been started the up gradation of Karakorum highway. ChinaPakistan economic corridor would be liable to enhance the trade activities of both the countries.In July 2013 when PM NawazSharif visited China, the decision was made to establish the CPEC.Under this corridor,there are 37 projects of national importance with the total expense of above 46 billion.It includes 2x 660 MW coal based power project at port Qasim of

$1.980 billion, 6x660 mega watt coal based power project at Gadaniwith cost of $5.94 billion, up gradation of Karachi to Lahore Peshawar (NL-I) railway line (1736 km) with cost of $3.65 billion.

Ultimately Gwadar project is solely focused on improving development of the region helps China to reach their goods in the other markets, availing China the shortcut route for its energy supplies.There are no roads existing now a days from Gwadar, the port is only linked to Karachi with one road.

3.3.3.2 Upgradation of the Karakoram Highway

China and Pakistan has aspired to accelerate connectivity between the both countries.This will be achieved through the up gradation of the Karakorum highway, building up a 1000 km railway line from Havelian to Khunjerab pass, fiber optic links will be installedcrossways the boundaryand building of gas and oil pipeline which would commence from Gulf and end in the Western region of China.(9)

These western Asian and European economies are fast integrating the China’s economy.More then 8000 km and several days of transit time period have been shortened through the Chinese trade course of Khunjerab Urumqi, Gwadar and intended for London as well as for Dubai.

It had been confirmed that the majority of China’s business with Middle- Eastern is conceded out via Indian deep-sea and the chockend of Malacca strait. The calculatedremoteness from Shanghai to Dubaiis 15000, kilometers and from Dubai to Khunjerab 5500 km,so the advantage is remarkable.China has been trying to revive the ancient Silk Road. Many crisscrossing, contemporary silk-road will bypassviaPakistan. Pakistanitacticalposition is linkingChina with the South-West and SouthernAsiawhiles the Middle-Easternand the deep sea at Arabia. Itas well comprises a vital rotary to the Central Asia.

Northern Province of Pakistan and Xinxiang are going to outline a board in the productive architective intended fornovel silk-route is to link GilgitBaltistan and Khyber Pakhtunkhwa border. Furthermore, traders are coming to Kashgar from various parts of Pakistan for transactions.Pakistani trades and trade officials visit Central and South Asian commdity in the form of delegation annually.Businessmen come to Kashgar mostly from Khyber Pakhtunkhwa and GilgitBaltistan; even they also come from all over Pakistan as far as Karachi, Lahore, Sialkot and, wazirabad.This subsistsconsequentlyas there is ecologicaltactic between PakistanINorthregions and the Xinxiangmoreover importantly, both the countries complement each other’s economy.

9) China Pakistan future economic strategic partnership Prof.Zhuo Wrong, 2015

Recently Sino-Pak corridor comprises the up-gradation of Karakorum highway (phase-II) Raikot to Islamabad 487 km with Rs 379 billion cost will be completed by,December 2017.Beijing will become interested whilstview in the background of its householdenlargement.This will provideKashgar a particularfinancialregion.It will provideenrichment for the enterprise of business and industry in the municipality. This will positivelypick up the pace the position of agreementconnectingthe both countries.

3.3.4 Defense

At the time of independence in 1947 there will no civil and military industry and R&D facilities were no existent. The ordnance factories were located in India which was established by the British. In the civil sector, Pakistan comprises only thirty four industry units, consisting of sugar, cement and textile.Literally the country had to start from the very beginning.Unfortunately within one year there started a war with India at the conflict of Kashmir with total dependence for weapons and equipment on the British.

On the opposite side India comprises a complex network of 20 ordinance and military industries and had fairly diversified civil industries.The government of the time had decide to over-come the deficiency with the setting up first small arm manufacturing facility in Rawalpindi with the co-operation of Indian ordnance factories which was opted for Pakistan.This facility was relocated at Wah, which within the years has grown to a large complex which have the capacity to produce a wide range of weapons.

In 1965, after the war Pakistan turned to China for military equipments and defence industrialization and established a strong military and strategic relations that have completed six decades.The experience shows that at the time of tension and hostility with India, a part from China, Pakistan cannotrely on any other source of essential military supplies. China’s co-ordination is remarkable in building Pakistan’s industrial and defence capability. Pakistan’s weapon system at present is originated from Chinese and it consist of armored fighting vehicles, multi-role fighter aircraft, artillery guns, surface to air and ship to ship missiles.However the major defence industries of Pakistan, Pakistan Ordnance Factories (POFs),Pakistan Aeronautical Complex (PAC) kamra and Heavy Industries Taxila (HIT) have been constructed with the great assistance of China. For the establishment of industries and production lines for the manufacturing Chinese equipment and weapon system, technology and expertise were assisted from China. In 1971 the Heavy Industries Taxila was established as a single heavy rebuild factory with the co-operation of China to rebuild T-59 tanks.

The factory has been grown into a large complex which is handling several projects, rebuild and manufacturing tanks, armored vehicles and guns in the last 97

four decades. One of the significant point of the factory’s co-production of the Al- Khalidtank with NORINCO of China.(10)

Co-operation between the two countries had become an important factor is bringing them close to each other. The policy of China for helping Pakistan building defence industrial infrastructure has been highly appreciated by the leadership as well as the people of Pakistan.

3.3.4.1 Frigates for Pakistan Navy

There has been established a close collaborative relationship between the Pakistan Navy and china’s naval industries.It is to be considered as a reliable source and cheep as compared to the others.At present the Pakistan has the Chinese technology based naval ships, weaponssystems and the patrolling boats. In the last five years Pakistan has received four F-22p sword class frigates from china. The Pakistan shipyard has built a latest F-22p with the collaboration of Chinese engineering works, as a mandatory part of policy to strengthen self- reliance. The commissioning was scheduled in 2013. Recently Pakistan has raised the demand of 120 C-602anti-ship cruise missiles from china in 2009.

The F-22 is a modern frigate equipped with a state of the art stealth turret and surface to surface missiles and anti-ship missiles all of Chinese origin. The Pakistan Navy in the last few years has been learning heavily on Chinese equipment and there are plans for buying additional frigates most probably improved variants of the type 22-P.

Pakistan already has patrol boats of Chinese origin recently procured two patrol crafts build by the China ship building industry.The Pakistan Navy has also procured one corvette from china and one more is in the pipeline. It is also looking at the prospect of inducting Chinese Submarines.Pakistan shipyard had previous experience of constructing ships but collaboration with China has expended and depend its technological and industrial base. The naval dockyard has equally benefited from this close co-operation.

Another valuable contribution of China-Pakistan co-operation has been the construction of the Gwadar deep water port by the china harbor construction cooperation, in which the Chinese government initially extended a loan of $ 198 million.

10) Talat Masood, China Pakistan co-operation in defense production “Handbook of Pakistan-China relations” 2015: P94.

As planned the port in the final phase will take vesselsup to 50,000 DWT. Gwadar port’s excellent location if properly developed could turn into a localcenter, helping in and awayprofitabletransfer of the Middle-East and the states of Gulf, the XinjiangChinese province, atthe western side Iran and at the South-Eastern is Bangladesh. Its tacticalsignificance is outstanding toits position on the jaws of the Persian-Gulf and at the conflicting and of the planned choking points of strait of Hormuz and Oman, the fall development of Gwadar port along with complimetary in country road and rail infrastructure connecting the port could positivelymanipulate the geo-tactical and politics and armed forces environment of the area.

China’s environment in Gwadar project was primarily motivated by commercial imperatives, but both China and Pakistan perceive distinct advantages for their navies in have a welcomingharborof named, near to the gulf. In times of crises for Pakistan to place it’s naval and air possessionsbeyond away beginning India’s air and navaldangersmight be of benefitable.

In response to India’s most comprehensivecivilian’s space and military missile programs, Pakistan decide to build its missile capability. When India in the late 1980’s tested the Prithvi missile that had a range of 300 km, Pakistan had by there in its inventory only the Hatf series that were rockets, although there were some efforts to equip them with a guidance system, but with the help of the Chinese defence companies a group of its own highly competent and dedicated engineers and scientist, Pakistan was able to leap frog in missile technology, and develop a strong indegenious base. Chinese initial contribution in the development of M-11 and Hatf series Missile of 300 km range laid the foundation of Pakistan indigenous missile industry.China assistance in the missile field was a demonstration of the growing strategic nature of the relationship. Pakistan’s ability to assemble or part- manufacture, mertial guidance system, rocket engines rocket fuel, tackle problems associated with the re-entry, develop proficiency in systems integration of missile systems, owes largely to Chinese assistance.

Just as the international level particularly in the US, and more so in Europe there has been a significant shift from the traditional singlecountry pattern of defence production and marketing of arms. In Europe, multinational armament production is now the accepted logic.In the US, in the last two decades there has been a spate of mega mergers and a few cross border and trans-atlantic affiliations, with a view to consolidate and rationalize defense industries to face the growing economic and technological challenges. The Chinese defence industry which is mostly in the public sector has undergone a major restructuring of its own as part of economic reform and modernization. Governments subsidies that were initially fairly generous have been mostly with drawn, companies running in a loss have been closed, and there is concerted drive at introducing corporate culture in defense industrial units. Pakistan has been adjusting to this new dynamicthat is manifesting in the form of a more commercial and programmatic approach on the part of Chinese companies in dealing with Pakistan.

The positive feature of Sino-Pakistan collaboration has been that China has equally benefitted from the relationship. Apart from the economic and commercial benefits in terms of reduced overall costs, accured due to exports and increased production, China has gained Pakistan’sunderstanding of and familiarity with western military systems and technology.

Experience has shown that promotion of technology is greatly facilitated through joint ventures, if properly planned and executed. When projects were well planned and implemented, as is the case of the K-8, the JS-17, Al-khalid armored fighting vehicle, these also served as good conduits for transfer of technology.And from experience transfer of technology should not be viewed as a means of merely fulfilling a national aspiration but must be based on its economic viability and what it has to offer in terms of technology.(11)

Sino-Pak defense co-operation has been entirely between governments owned companies.In the interest of officienly and with private sector industries in Pakistan should be encouraged to participate in Chinese projects both as standalone units or vendors of the intermediate products to the government owned industries.

This will help in expanding the technological base to the country.The private sector is also well suited for the the development of dual use technologies, giving greater flexibility to industries.A factory producing tractors with modifications can also produce armored personnel carriers. An electronicindustry engaged in making radio sets, with certain modifications and upgradation, could produce military communication equipment.

Despite these restraints there is a wide scope to collaborate in deffense operation because the fundamentals governing the relationship have not changed. Hopefully Pakistan’s civil and military leadership would realign its policies and expectations in a changing world, in order to actualize the full potential of its relationship with china.

3.3.4.2 The Aircraft Korakoram 8 (K-8)

K-8 is a dual seated trainer meant to bridge student capability between primary flying and fighter flying. It was an indigenous Chinese product that was more likely introduced to the PAF with potential for sale.

11) Talat Masood, China Pakistan co-operation in defense production “Handbook of Pakistan-China relations” 2015: P.106.

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Pakistani pilots had been introduced to a number of foreign trainers from both eastern and western hemisphere, during their frequent secondments abroad with various air forces of the world.They recognized the potential of this product. The K-8 is a useful mix of the Hawks from England as well as the Alpha Jet that came from France.It carried a commercial American engine and may have gained from some American advice too at certain time as they looked ahead to making numerous engine sales to potential buyers.

The 80s and 90s brought in a new culture of flying training especially for the air forces which needed to progress the student from ab initio to full combat status. Usual training cycles till then had included different training aircraft for each step of the training. That imposed a burden on the young students to first relearn to fly a new aircraft and then progress onto the more complex exercises leading them to become a fighter pilot. This entailed greater complexity as well as inefficiency.The new culture considered introduction of trainer aircraft that would be easy enough to impart basic training as well to introduce the pilot to more complex exercises as he or she gain greater proficiency. The K-8 may not have been initially conceived as such when designed in China or when first inducted in Pakistan, but by and by as the PAF saw and experienced the aircraft it became very obvious that it’s most efficient use revolved around using it according to the newer doctrine of training. The aircraft had the capacity to do both basic as well as Lead-In-Fighter Training, without the student having to relearn a new aircraft. The concept has added greater efficiency to how training is now done in the PAF with shorter training cycles and more accomplished pilots as they come out at the other end.The efficiencies have greately increased and waste rates have gone down considerabily even as the students now contend with more complex exercises entailing greater demand.

Pakistan first got involved with the K-8 somewhere in 1986-87. The consideration then was to find a replacement for the J-37 Cessna’s American Basic Flying Trainer used since 1962 at the Risalpur Flying Academy. Pakistan became a joint partner to the K-8 the movement it was first introduced and contributed withCockpit design and other parameters enabling modern training methods. One other significant contribution was the PAF insisting on a higher rear seat where the instructor could have a full view a head. It came as a formal trainer alongside the T- 37 in 1993-94.As a joint venture between China and Pakistan least 25% of the aircraft will be made in Pakistan, which includes critical flying surfaces and the empennage. All sales to any customer are similarly proportioned to carry manufacturing responsibility as well as the share of profit. The relationship has held out well and the aircraft is increasingly serving its intended purpose to prepare the future generations of air warriors.(12)

12) Talat Masood, China Pakistan co-operation in defense production “Handbook of Pakistan-China relations” 2015: P.103.

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The K-8 therefore, covers a large spectrum of training in the PAF. A student who has been trained in basic flying on the aircraft does not need to relearn aircraft as he graduates to fighter training, only the employment techniques now get more complex, preparing him well for the more complex fighters to follow. Also the Aircraft has now turned into a usefull combat platform against selected targets. The K-8 has proven to be significant learning project for the fledgling Pakistan Aviation Industry in terms of being introduced to steps leading to fighter designs and manufacturing.It has also returned to the PAC and the country a reasonable return in terms of financial profit as well as a trained & man power adept manufacturing high precision parts on complex machines and jigs. It remains a continuing success story.

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Chapter 4

Emerging National & Global Scenario

4.1 Background

The domestic political system of china and Pakistan diverge but they have learnt to pursue multifaceted and uninterrupted engagement on the basis of a mutually agreed and periodically updated framework for friendship and cooperation.While narrating the history of their relationship, the article mention that, from the new beginning in 1962-1963,Pakistan and china never looked back.Their relation expended from a simple diplomatic interaction routine protocols to one of the most active relationshipfor both countries. Their co-operation has expanded so much by the first decade of the 21st century in diplomatic,technological, economic Scientific and cultural domains that China can be described as the most significant contributor to Pakistan’s economy and industrialization, including defence related industry. In return, as noted, Chineseenjoy a bundle of admiration and support at the generalcommunity level within Pakistan. It is seen as a steady supporter of Pakistan. Some sections of Pakistani population appear to be quite emotional in their support of China. It has been testifiedthat trade and economic relations of both countries go back to the early 1950’s but their expansion took place after the signing of two trade agreements in 1963. The article while giving an account of diplomatic relations of both countries states that china has been successful in maintaining an effective communication with Pakistan on regional and global issues and it contribution towards Pakistan’s economic and industrial development continues to be on the rise. However, it has been affirmed that China and Pakistan have a complex and uneasy relationship regarding terrorism in Xinjiang. Dr Askari elucidates his reviews that the greatest threat to this relationship is not the expansion of Sino-Indian friendship but two sets of developments inside Pakistan. First how for Pakistan can contain the proliferating extremist and hardline Islamic groups that not only challenge the rit of the Pakistani state but also pursue their religion based narrow- partisan agendas outside the territorial boundaries of Pakistan, especially in the neighboring states. Second, priority attention is needed towards restoring the confidence in Pakistan’s economy and cultivating its positiverelationship with the international system so that it attracts investment and trade and there is a greater movement of people, goods and services across its teritorial boundaries. The author concludes by citing the example of a working framework for bilateral relationship which has been provided by the Pakistan-China agreement of collaboration, friendship andexcellenthospitablerelationships, inked in April, 2005 by Wen Jiabao, Chinese Premier and Shaukat aziz the Prime Minister of Pakistan. The author states in the end that the relationship between the two neighbours will continue though its pace may change from time to time. The contents of this Chapter are:

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The beginning Towards a new relationship Major phases of the relationship Economic development industrialization and trade Defense and security co-operation The Kashmir problem Terrorism Humanitarian assistance and diplomatic strides Concluding observations

The shared interest in global and regional politics and a mutually rewarding experience at the bilateral level serve as the foundation of the Pakistan–China relations. Their domestic political systems diverge but they have learnt to pursue multifaceted and uninterrupted engagement on the basis of a mutually agreed and periodically updated framework for friend hip and corruption.

Pakistan and China had“established a extraordinaryappreciative of, and understandingapproachin the direction of each others objective of foreign policy goal”(1) despite the change of leadership over time on both sides adoption of new priorities in foreign policy. The review of foreign policy priorities of both countries from time to time shifts the emphasis on issues in their bilateral relations. However, they accommodate each other‘s major concerns. They avoid public criticism of each other’s policies but they are very candid and forthright in official bilateral diplomatic interaction.

4.2 The Beginning

Though Pakistan recognized the China formerly as “the People’s Republic ofChina” on 4th January 1950, after three months the founding of the People’s Republic, the ambassador of Pakistan and Chinado not obtainthe place in each otherscapitalin anticipation of September to November 1951. Initially their relations grew very slowly and the volume of trade was also limited because their leaderships were busy in setting up the new state order and addressing the problems of their citizenry. It was a routine relationship with no enthusiasm on either side during 1949-54.

Pakistan’s search for security against India let it join the US sponsored regional security pacts in 1954 onwards. This rang alarm bells for Chinese leadership, who thought this to be a negative development. However, unlike, the Soviet Union’ the Chinese leadership showed restraint in public denunciation of Pakistan’s contribution in the United Statessponsoringagreements.

1) Hasan Askari Rizvi, Pakistan and the Geostrategic Environment: A study of Foreign Policy (London: Macmillan, 1993), P.138.

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The primaryconference between the Chinese Prime Minister Zhou Enlai and Pakistan’s Prime Minister Muhammad Ali Bogra take place resting on the event of the Bandung seminar in April 1955.

The focus was on Pakistan participation in defense pacts. Muhammad Ali Bogra explained Pakistan’s decision to join the alliance system and succeeded in convincing Zhou Enlai that it was meant to meet Pakistan‘s security needs with India and that china was not its target.

This meeting made it possible for Pakistani Prime Minister Hussain Shaheed Suhrawardy and Chinese Prime Minister Zhou Enlai to visit each other’s capitals in October 1956 and December 1956respectively. This enabled them to maintain functional but low keyed diplomatic and trade relations. Pakistan, being an ally of the US from 1954 onwards, often assumed a proUnited States situation on the chairs of China in the UN and other china related issues until 1961(2).

4.3 Towards a New Relationship

Pakistan and china faced a new geostrategic environment in the decade of the 1960s that brought about significant changes in their bilateral relations. The year 1962-63 marked the beginning of new positive trends. They launched new diplomatic initiatives that surprised many countries, including the United States and India. The US invoked its economic and military linkages with Pakistan to stall Pakistan’s fast track efforts to develop multifaceted relations with china. In early December 1963, US President Johnson advised visiting Zulfikar Ali Bhutto the Pakistan’sForeign Minister, that Pakistanirisingrelationships with China would have negative implications for Pakistan–US relations. He specially asked for not inviting Zhou Enlai for an official visit to Pakistan in 1964. These pressures failed to dissuade Pakistan from pursuing close and active relations with china.

By 1961-62, was alienated from the US sponsored alliance system. Pakistan was disappointed because during and after the border war between India and China in October 1962; the US extended diplomatic support supplied weapons, military equipment and training to the Indian military. It worked towards building up and doing India as a counte-rpoise to China.

2) For the development of Pakistan’s relations with China in the 1950s & the 1960s see S.M. Brke, Pakistan’s Foreign policy: An Historical Analysis (Karachi: Oxford University Press, 1973), pp.101-108, 213-218; Anwar H. Syed, China & Pakistan: Diplomacy of an entente cordiale (Amherst: University of Massachusetts press, 1974), pp.53-101; K Arif (ed), China-Pakistan relations, Documents (Lahore: Vangaurd books, 1984), pp.3-59; Rashid Ahmd Khan, “China’s policy Towards South Asia: A comparative perspectiove.” Regional studies (vol.V No.1, Winter 1986/87), pp.14-27.

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Within 1962-1965, the US and the UK provided India with a large quantity of weapons and equipment, including aircraft, and military training. Most of it came as a grant and India was not required to join the US Initiated alliance system. Pakistan raised strong objections to these arms supplies but its concerns were rejected by the US.(3)

Pakistan‘s leadership was convinced that the policies of the US and other western countries jeopardized its long term security interests. It decided explore new foreign policy options to strengthen its security in the regional context. This led Pakistan to review its policy of complete alignment with the West and adopt an independent approach by improving interaction with the countries that remained neglected in Pakistan’s foreign policy because of its strong faith in alignment with West.

Pakistan new search for security and the desire to adopt an independent posture in foreign policy in the changed regional context led to several changes in Pakistan’s diplomatic interaction. The opening towards China was the key feature of the new foreign policy. Pakistan had no political or territorial conflict with China at the regional and global level. It was relatively easy to expand ties with China. This move was based on “the belief that in the context of the Indian military build-up and what it perceived as India’s unflagging hostility towards Pakistan, friendship with China was a matter of fundamental importance for Pakistan.(4)”This shift contributed to boosting Pakistan’s image among Afro-Asian nations.

China responded positively to Pakistan’s new foreign policy moves because these changes served China’s interest in the context of its border conflict with India and it got a much sought after opportunity to expand its diplomatic reach. By an active relationship with Pakistan, and agreeing to the demarcation of the China- Pakistan border, China showed its peaceful intention and it could argue that it was India’s aggressive posture that had let to the October 1962 Sino-Indian border war. Had India been forthcoming like Pakistan the border dispute with India could also be settled peacefully, China could argue than.

China was able to win over a reliable friend that had the capacity to build diplomatic and military pressure on India.Further, in an era of virtual isolation of china, the opening to Pakistan not only expanded the domain of China’s foreign policy but it also got a land access to the Muslim countries of the Middle East.

3) For Pakistan’s Critisism of westeren arms supplies to India in 1962-1963, see Muhammad Ayub Khan, friends not masters: a political autobiography (Karachi: Oxford University press, 1967), pp.133-153.

4) Nioufer Mehdi, Pakistan’s foreign policy 1971-1981 (Lahore: Ferozsons, 1999), P.187.

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In fact, the enhanced China-Pakistan interaction and support to Pakistan’s economic and industrial development established a good example that China could show to other developing countries, especially Muslim countries, that it was willing to help other nations irrespective of divergence of political systems and political ideology. From the new beginning in 1962-63, Pakistan and China never looked back. Their relations expanded from a simple diplomatic interaction and routine protocols to one of the most active relationships for both countries. There cooperation had expanded so much by the first decade of the 21st century in diplomatic,economic, technological, scientific and cultural domains that china can be described as the most significant contributor to Pakistan’s economy and industrialization, including defence-related industry. They share visions on most importantglobal and localproblems and often work in harmony on international forums.

The politically active circles in both countries are supportive of continuing with their wide-ranging interaction. Pakistan’s diplomatic exchanges and bilateral visits at official, semi-official and non-official levels with China exceed Pakistan’s diplomatic interaction with any other country.

It is an established practice now in Pakistan and China to describe their bilateral relations as“high than the Himalaya’s Mountain,much deeper than the Arabian Ocean, and much Sweeter than honey”. It is also described as an “all weather friendships” that has stood the test of time since the early 1960s.

Addressing the joint session of Pakistan’s parliament in December 2010, Wen Jiabao Chinese Premierexplained the Sino-Pakrelationship as an “all weather tacticalaffiliation that serve the primarywellbeing of both the states(5)”Masood khan the PakistaniDiplomat to China,assumed that the relations between the two countries are “unique and unprecedented in history.(6)”

If we examine the diplomatic visits and the fields of co-operation between the two countries since the year 2000, they have covered almost all major sectors of government and society. This clearly establishes that the scope of interaction has become very wide and it is a vibrant relationship involving government and non- government sectors. The well-known areas of bilateral exchanges and visits include the youth’s writers, intellectuals, political parties, academicians and think-tanks, parliamentarians, agriculturists, traders and business people, culture, sports and entertainment, the media, student exchanges including admission of Pakistani students to Chinese universities, and military officers. The high level official visits, including the visits of the President, Prime Minister, and the top Brass of the military, have also been a regular feature of their diplomatic interaction.

5) Daily Times (Lahore), December 20, 2010. 6) Ibid, May 22, 2010.

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The major sectors of co-operation include agriculture, various industrial sectors (including engineering and technical fields), science and technology, economy, trade and investment, defence-industry, nuclear technology, telecommunications, electronics, media, water and hydro-power generation, road building, port building , up-gradation of existing industrial projects,mining and mineral development, electric power generation from alternate sources, i.e., nuclear, solar, coal and wind, trade and commercial,public and commercial, public and private sector investors, narcotics control, joint military exercise, terrorism control, education, barter and border trade between Gilgit-Baltistan and Xinjiang, and humanitarian assistance and technical support in case of natural calamities.

In February 2011, the Pakistan-China institute, led by Senator Mushahid Hussain, was launched in Islamabad as a non- official initiative. It runs a bilingual monthly magazine on the web and initiated several programs of teaching the Chinese language, in addition to serving as an active forum for academic exchanges and generation of new ideas on bilateral and regional affairs.

In September 2011, the Sindh government announced a plan to introduce the Chinese language as an optional subject in high schools. The implementation of this project would take time due to financial constraints and non-availability of teachers in Chinese languages. This plan had not been implemented by the summer of 2012.

China’s style of diplomacy is different from American and European diplomacy. The Chinese diplomats are low-keyed, avoid critical comments in public and come across to their hosts as modest people who identify closely with the developing nations of Asia, Africa and the Middle East. They show greater difference to local traditions and culture. Over the last decade they have become better skilled in English and some of them have a good command of Urdu, making it easy for them to function at the societal level.

The Chinese Government avoids making public statement if it develops differences with Pakistan on some issues. These matters are taken up quietly at the official level. If the making of a public statement become imperative it is done in carefully chosen words. For example, the Chinese Government was upset by the killing of Chinese personnel working on different projects in Pakistan by unknown terrorist groups. Similarly, the Chinese Government often complains to the Government of Pakistan about the radical Islamists from Xinjiang province using Pakistaniancestralregions as a centre for teaching and rest. These matters are taken up at the official level rather than China using these as propaganda against Pakistan. We will discuss these issues later in the Chapter.

Since 1963, China has provided economic assistance and technical cooperation, either financial grants or as loans on low interest rates which are tied to buying goods and services from China. Some of these loans were later changed to

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grants as a gesture of friendship. Now, the common practice is that of giving loans on low interest rates. Their repayment can be done in local goods that China wants to obtain. Investment is also coming from China for different joint industrial ventures. With the surfacing of private sector in China, projects as public-private partnership are also being pursued. Joint investment projects with Pakistani groups are now also functioning in Pakistan.

Chineseenjoy a bundle of appreciation and support at the generalcommunitystage in whole the Pakistan and is seen as a steady supporter. Some sections of the Pakistani population appear to be quite emotional in their support of China.

There is a section of public opinion in Pakistan which suggests periodically that Pakistan should enter into a formal defense treaty with China in order to strengthen its security against external threat, i.e., India. This idea was floated by some political and social leaders in Pakistan in 1972-73 against the milieu of PakistaniArmy catastrophe in the Indo-Pakfighting, November to December, 1971 with the loss of East Pakistan (7).

Similar views were propagated on a couple of occasions later on.(8) When Pakistan’s relations deteriorated with the US after the US/NATO troops attacked Pakistani border posts in the Salala area of the Pakistan–Afghanistan border on November 26, 2011, a number of political analysts and activists talked of replacing the US with China as a partner in security and economic development. Many groups from the political-right and those subscribing to Islamist orientations argued for abandoning the US altogether and relying heavily on China.

China has always extended strong diplomatic supported to Pakistanisafety and its regionaluprightnessat any time it countenanceexteriordanger. It unmitigatedunmistakableprop up to Pakistan at Kutch War in the Rann , with India in April 1965 and the Indo-Pakistan Wars of 1965 and 1971. It has been supplying weapons and military equipment to Pakistan on a more or less regular basis since 1966. The two countries are also co-operating in several joint defense projects for the army, the Air Force and the Navy. However, China has never shown interest in a formal defense treaty with Pakistan, as suggested by Pakistan’s non-official circles.

7) Many statements & Articles appeared in Pakistan press in Favour of some kind of defence Treaty with China in the immediate aftermath of the break up of the Pakistan in December 1971. See, for example the Editorial in Nawa e waqt (Lahore, December 24, 1971.

8) See Muhammad Asghar Khan, “Pakistan’s security: The China option” Dawn(Karachi, August 1, 1997.

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It sharply criticized the Soviet proposal for Asian Security Plan (1969) and the Indo-Soviet treaty of 1971 but it never offered a countervailing defense treaty arrangements. All security and defense matters are taken up at the bilateral level on issue to issue basis. China’s policy of avoiding a formal defense treaty appears to be based on three major considerations.

First, China has traditionally been critical of formal regional or bilateral defence treaties. If China entered into a defense treaty with Pakistan this would have compromised its opposition on the security arrangements by the US and the Soviet Union. Without entering into a formal and comprehensive defense treaty, China helped Pakistan in defense and security affairs at the bilateral level. It has made significant contribution to building Pakistan’s defense capacity not only by providing weapon and military equipment but also by transfer of defense technology and the setting up of defense industry in Pakistan.

Second, a formal defense arrangement would have dragged China into Pakistan’s problems with India. While supporting Pakistan in its problems with India, China has maintained a discreet distance from India-Pakistan problems. This policy was an offshoot of its decision to freeze its territorial disputes with India and normalize its relations with that country from the early 1980s after the adoption of policy of four modernization and peace on borders.

Third, the ending of the Cold-War (1990-1991) with the collapse of the Soviet Union (1991) increased foreign policy options for China because the world open up to more active interaction and greater attention was focused on trade and economic co-operation this facilitated China’s policy of four modernizations. China found it convenient to pursue a foreign policy with active global perspective.

It developed wide-ranging economic and diplomatic interaction with the US and the European states.

China differs with the US on a figure of global and local issues but these differences are issue-oriented and both, China and the US, value their bilateral economic, trade and political relations. Therefore, China is not expected to be a party to the anti-America disposition of Pakistan Islamist and the Political-Right groups. It cannot jeopardize its relations with the US for the sake of a section of public opinion in Pakistan that views the world in terms of Islam versus the West. Such an emotive worldview is not shared by China and it does not serve its long term global agenda.

China’s new perspectives in global affairs were bound to modify its strident approach towards India because it opted for the policy of peace on its borders. Without abandoning its territorial claims China has, to a great extent, normalized its

110 relations with India. Mutuall distust continues to mar Sino-Indian relations but China avoids diplomatic hostility. Consequently, it does not subscribed to Pakistan’s critique of India. However, there is no reduction in China’s support to and cooperation with Pakistan, although China adopts a more or less nonpartisan position in the problems between India and Pakistan.(9)The difference in the style of diplomacy which is more in tune with China’s new approach towards global affairs. However, Pakistan continues to be its first preference in the South Asian region.

China has advised the Government of Pakistan to pursue peaceful relations and bilateral diplomatic options for dealing with its problems with India. It also advised the Government of Pakistan to normalize relations with the US in the aftermath of the Salala border post incident in November 2011.

4.4 Major Phases of the Relationship

The relations between China and Pakistan can be devided into the following phases on the basis of the major themes of each period. These phases are overlapping because there was continuity and change in the relationship: 1962-1971 1972-1979 1980-1989 1990-2001 Post September 2001 2011-2012

4.5 First Phase: 1962-1971

The first phase of 1962-1971 was the period of initiation of an active relationship. A lot of groundwork was done during these years that helped to build an enduring relationship in the subsequent years.

China and Pakistan came to the conclusion that they would have to review their traditional disposition towards each other and the rest of the world. China had lost faith in the hitherto policy of “China-Hindi Bhai Bhai“as its relations deteriorated with India during 1959-1962.It also felt the need for opening upto other countries in view of western support to India for its confrontation with China. Pakistan, on the other hand, faced disappointements from its close alignment with the US and other western countries. Indian hostility had also increased and the western allies were not inclined to help Pakistan in a meaningful manner for the resolution of its problems with India. China and Pakistan decided to explore new options in foreign policy for the aforementioned reasons. One such option was the expansion of bilateral relations that began with the decision in May 1962 to initiate talks on the demarcation of the border between China and Pakistan.

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9) Javed Hussain, “Future of relations with China.” Ibid, 17, 2005; Zubaida Mustafa, “How effective is the China Card.” Ibid, November 12, 2003.

These negotiations were completed by the end of December on agreed principles for identification of the border. Four agreements had been signed between China and Pakistanin 1963 that provided the foundations for the new relationship. These agreements were:

A trade agreement granting the ‘Most-Favoured Nation’ (MFN) status to each others for trade January 1963.

Forthe demarcation of territorial boundariesthe border agreement, March 1963.The air transport agreement, August 1963, that enabled Pakistan’s national air carrier, Pakistan International Airlines to start regular passanger service to Beiging and beyond in April 1964.

The barter trade agreement September 1963.

There were several visits at the highest levels visits during this period to strengthen the relationship. The Chinese visit to Pakistan built-in those of Zhou enlai, the Prime Minister: February 1964, June 1966 and Lou Shao Chi the Chinese President and Chhen Yi Foreign Minister in March 1966. From the side of Pakistan the visits included those conducted by President Ayub Khan in March 1965, and in November 1970, Yahya Khan the President of Pakistan. The top commanders of the armed forces of Pakistan visited China during 1968-71. Chinese military delegations also visited Pakistan.

Chineseextenunambiguoushold up to Pakistan in the route of Ran of Kutch War, April 1965 and the Indo-Pakistan war, September 1965. These two developments against the backdrop of an arms embargo by the US on Pakistan upon the outbreak of war in September 1965 contributed most to building strong goodwill for China at the common people level in Pakistan.

China began to supply weapons military equipment and aircraft to Pakistan after the September 1965 Indo-pakistan war. The Chinese equipment, including aircraft was showcased for the first time in Pakistan’s national day parade on March 23, 1966.

China sympathized with Pakistan’s version of the socialconflict in Eastern- Pakistan, in March 1971 onwards and accusedIndia of interference in Pakistan. It became more critical of the Soviet Union and India following the Indian-soviet contract and frequently described India as an expansionist power.While publicly denouncing the Soviet Unionand India, Chineserecommend Pakistan for discussionthrough the Awami League leadership to deffuse the situation. This advice was given when a high level Pakistani delegation visited Beijing in the first week of November. Despite this the Pakistani Government allowed the perception 112 to circulation Pakistan that China would physically intervene or resort to diversionary military tactics on the Sino-Indian border if India attacked East Pakistan military.(10)

The falsehood of this imperssion was exposed when India moved its troops into East Pakistan in the last week of November and China did not move it troops but confined its support to Pakistanat the diplomatic level in the UN and outside.(11)Itseems that by the end of October, the Chinese were convinced that Pakistan could not succeed in East Pakistan. Further, the overSoviet support to India neutralized the possibility of any military move by China. Their focus was on damage control for Pakistan and assuring the security of the post-1971 Pakistan.

There were two additional developments in 1971.Pakistan facilitated a secret exchange of communication between the US and China that made it possible for Dr Henry Kissinger’s secret visit to Beijing in July while he was on a visit to Pakistan. This opened direct diplomatic ties between the two countries that enabled President Richard Nixon to undertake the first official visit to China in February 1972.

The Pakistan has been one of the supporters of the declaration that made it possible for China to resume its seat in the UN in October.This resulted in the ouster of Taiwan from the UN that had occupied the seat until then. Pakistan facilitated China’s contact on this issue with the Muslim countries that did not have any diplomatic ties with China.

4.6 Second Phase: 1972-1979

The second phase of relationship, 1972-1979, saw the consolidation of the relations that had developed in the first phase. It was a difficult period for Pakistan because it had lost the war to India and Eastern Pakistan had ceded from the federation. There were concerns about the future of the post 1971 Pakistan. Muslim countries and China helped Pakistan to overcome the trauma of 1971.

Within days of assumption of power by ZulfikarAli Bhutto from General Yahya Khan on December 20, 1971, Chinese Prime Minister ZhouEnlai sent a supportive message.

After praising the “valiant effort” of the community of Pakistan “in opposition to the Indian assailant protection of their state dominion and regional uprightness” he anticipated that the welcoming relationships between both the states might “build up and rise strongly every day”. (12)

10) In an interview with an American News network President Gneral Yahya Khan Said that if India attacked Pakistan, “China will, ofcourse, intervene.” Pakistan Times (Lahore), Nov 9, 1971. 11) For a deails study of china’s policy towards East Pakistan crises and the Indo-Pakistan War See Hassan Askari Rizvi internal strife & external intervention: Indias Roll in the civil war in East Pakistan (Lahore: progressive publishers, 1981), PP.225-246. 12) Pakistan Times, December 24, 1971.

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President/Prime Minister Zulfiqar Ali Bhutto undertook three trips to China in Jan and Feb 1972, May 1974 and May 1976, which expanded the scope of cooperation and enormous Chinese support for addressing the troubles;happen and exposedin the 1971 War. The first visit yielded much nedded support to Pakistan on the return of its prisoners from war from India and the normalization of relations with Bangladesh. China wrote-off tetraloan amounted to 110 million USD, delayed thereimbursement of the 1970 free of interest loans for 20 years and agreed to provide new loans to Pakistan in the future.

There were high level civilian and military exchange visits between the two countries during 1972-77. Chinesemade use of its initial veto in the United Nation’s security council in 1972 to stop Bangladesh from becoming a member of the UN on the ground that the circumstancesput down in the protectioncommitteedeclaration of 21st December 1971 have not beencomprehend. These circumstancesbe the taking out of military troops and the return of all Pakistani prisoners of war. This was a major favor to Pakistan and it forced India and Bangladesh to agree to the unconditional return of Pakistani POWs and withdrawl of troops on the West Pakistan-India boundary and the line up of power in Kashmir, as granted in the Simla contract of 1972.

InMay 1974, when Indianhad exploded its opening nuclear device;it has been viewed by Pakistan that it is a dangerousintimidation to its safety. Chinese reiterated its hold up to Pakistanisovereignty and regionalveracity and later onsupport a Pakistanisuggestion for announcingSouth-Asia as aFree Zone from Nuclear Weapons.

During May 1976,China and Pakistaninked an accord on science and technologycollaboration and a practice on financial and technologicalassistance.

These provide as the major framework in subsequent years for Chinese assistance in scientific and technical fields, including nuclear technology, and trade and economic assistance, including the setting up of industrial projects. It established the the Heavy Foundary, Heavy Mechanical Complex and force at Taxila in 1971 & 1977 consecutively. The Chinese established several industrial projects in textiles, fertilizer, sheet glass, cement, sugar, iron and steel, thermal power generation, nuclear power generation and electronics.

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4.7 Third Phase: 1980-1989

The third phase of the relationship, 1980-1989, was dominated by the USSRmilitary troopsinterference in the Afghanistanand low-key efforts by the post- Mao Chinese leadership to improve relations with India.

In the last week of December 1979, Soviet’s millitarytroop’swalke into Afghanistan and set up a govt of their preference in Kabul with the aim ofhunted to organize the entirestate. They immediatelyfacesturdyconfrontation that enforced them to give up Afghanistan in Feb 1989. Chineseconflict the Soviet Unionarmedinterference in Afghanistan, unfolding it like a danger to harmony and safety in Asia and the remaining whole of the world. Chineseopenedanofficialobjectionin opposition to the Soviet Unionintended for its armed forcesinterference in Afghanistan. It claimed that the Soviet Unionmust “at oncediscontinue their hostility and interference” in Afghanistan and so as to the interferencepretense a hazard to Chinaeseprotectionas it was the neighbor of Afghanistan.(13) This action was depicted as solitary of the three hurdles to development of Soviet-Chinesrelationships. Asreproachful the Soviet armed forcesinterference in Afghanistan, the China’sheadshiprestatedpackedhold up for Pakistaniself-government and regional integrity. Haung Hua Chinese Foreign Ministermade a visit to Pakistan in the 3rd week of January 1980 to reassure Pakistan for Chinesehold upin opposition toeveryfeasiblehazard from Soviet Unionarmed forcesinterference in Afghanistan. Talking to a conference of the Afghan refugees near Peshawar, he said that Beijing “was on their side and would do everything it could to relieve their suffering”.(14) Pakistan and China coordinated their diplomatic moves inside and outside the UN on this issue and demanded the taking out of soviet Union armed forces from Afghanistan and the go back of all afghan refugees from Pakistan. These themes surfaced again during President General Zia-ul-Haq’s Beijing visit in month of May 1980 and Zhao Ziyang’s Chinese Prime MinisterVisit to Islamabad in May-June 1981. The Soviet military presence in Afghanistan became an additional reason for providing military hardware to Pakistan. China also extended humanitarian assistance for Afghan refugees and extended diplomatic support to the Afghan-Islamic resistance andsupplied them with weapons in a limited quantity. It welcomed the GenevaAccords on Afghanistan in 1988 and the exit of Soviet troops from Afghanistan by February 1989.

While continuing with the policy of diplomatic support and co-operation in economic and security fields with Pakistan, China’s post-Mao leadership began to concentrate on four modernizations in China. This led China to moderate its conflict ridden relations with India. As compared to the pre-1979 period, it diluted its criticism of India with reference to Pakistan’s problems and stopped outright condemnation of India on Kashmir.

13) For Eastern Economic review January 11, 1980, P. 13. 14) China’s foteign aid in Pakistan, assures Afghan refugees of help.” New York Times, Jan 21, 1980.

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4.8 Fourth Phase: 1990-2001

The fourth phase of their relations 1990-2001, witnessed the onset of multifaceted Pakistan-China relations.China was more engaged in the industrial and technical development of Pakistan; a good number of Chinese personnel worked on industrial, power generation and related projects.

At the same time the normalization process between China and India that had made a slow beginning in 1976 and showed some Signs of life in the 1980s, picked up momentum in the 1990s with increased diplomatic activity and increased bilateral trade. (15) The border talks initiated in December 1981, had held several inconclusive rounds since then. (16) A Joint Working Group was established in 1989 to take up bilateral issues. It held 12 meetings during 1989-2000.The highest level visits also increased during this phase.Some of the visits included Rajiv Gandhi India’s Prime Minister visit to Beijingin December 1989; Chinese Vice President Wu Xueqian’s visit to India in October 1989; Chinese Foeign Minister Qian Qichen’s visit to India in March 1990; Li Peng China’s Premier visit to India in December 1991; Indian President R Venkataraman’s visit to Beijing in May 1992; Indian Defense Minister Shared Pawar’s visit to Beijing in July 1992; Indian Prime Minister Narasimha Rao’s trip to China in September 1993; Chinese Foreign MinisterQian Qichen’s visit to New Delhi in July 1994; Chinese Defense Minister General Chi Haotian’s visit to New Delhi in September 1994; India’s Vice President K R Narayanan’s visit to Beijingin October 1994; Chinese National People’s Congress Chairman Qiao Shi’s visit to India in November 1995; China’s President Jiang Zemin’s visit to new Delhi in December 1996; Indian President K.R Narayanan’ visit to China in May-June 2000; Chinese Foreign Minister Tangjiaxuan’s visit to India in July 2000 and China’s National People Congress Standing Committee Chairman Li Peng’s visit to Delhi in January 2001.

The services chief of both countries and senior military and civilian official also undertook reciprocal visits during this phase and began to visit each other in this phase.(17) The major success of Chinese diplomacy was that despite an active relationship with India, they kept Pakistan satisfied by continuing with the multifaceted fast expanding relationship, although Chinese leaders and diplomats had become very careful in selection of words while talking of the problems between India and Pakistan.

15) The first step of revival or realtions was taken in 1976 when China and India exchanged ambassadors. In February 1979, India’s Foreign Minister Atal Bihari Vajpayee visited Beijing but his visit cut short due to Chinese military operation against Veitnam. 16) For a new review of initiation & slow but noteworthy development in the interaction between China, see Sumit Ganguly, “The Sino-Indian Border talks, 1981-89.” Asian survey (vol. 29 No. 12, December 1989), pp.1123-1135; Surjit Mansingh, “India-China Realtions in the Post-Cold War Era.” Ibid. (Vol. 34, March 1994), pp.285-300. 17) Waheguru Pal Singh Sidhu & Jing-Dong Yan, “Resolving the Sino-Indian Border Dispute.” Ibid (vol. 41 No.2, March-April 2001), pp.351-376; Samina Ahmed, “Sino-Indian relations in a charging world.” Regional studie (Vol.XI No.3, Summer 1993), pp.3-40

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4.9 Fifth Phase: 2001-2011 (Post 9/11 Period)

The fifth phase of the Pakistan-China relationship, 2001-2011(post 9/11 period), was dominated by the political and security fallout of the terrorist attacks in the US on September 11, 2001. The Taliban regime in Kabul was ousted by US military action in Afghanistan in October-November 2001 and a new government led by Hamid Karzai was installed in December. The continued presence of the US and NATO troops in Afghanistan and the escalation of terrorist activities had negative implications for Pakistan and China.

China supported the UN Security Council efforts after September 11, 2001 to adopt a globally shared approach to contain transnational terrorism. China declared that it stood “Side by side” with the U.S. for fighting terrorism.(18) During the visit of US, ambassador-at-large Francis Taylor, to Beijing in the first week of December, China and the US agreed to “step up co-operation in fighting international terrorism.”(19)

China faced a difficult situation in Afghanistan. The presence of US troops in Afghanistan was not a desirable development. The alternate was the return of the Taliban to Kabul and the resurgence of military in Afghanistan and Pakistan’s tribal areas. This was not a desirable option because China was already facing a radical Islamic Uighur movement in Xinjiang region that had developed links with the Taliban. The return of the Taliban would have strengthened this movement. China was left with no choice but to support the US in Afghanistan, albeit reluctantly.

The Radical Islamic movement in Xinjiang region of western China, bordering the Gilgit-Baltistan region of Pakistan, received training with the Taliban in Afghanistan. The Chinese government took up this matter directly with the Taliban government in the pre-September 2001 period for dissuading the Taliban from training Uighur radicals. China also approached the Taliban government through Pakistan but the Taliban government refused to commit on this issue. In the post 9/11 period, China not only joined the global effort to contain terrorism in and around Afghanistan but also worked closely with Pakistan for controlling terrorism and for assuring support to Pakistan in the face of the increased terrorist threat that the later was confronted with.(20)

China endorsed Pakistan’s decision to join the global effort to fight terrorism. Foreign Minister Tang Jiaxuan, who called on President Pervez Musharraf in new York, respected Pakistani hold up to the worldwide struggle in opposition to terror campaign and guaranteed China’s “support and understanding” for Pakistan’s role in this cause. (21) 18) “China’s choice.” Far Eastern Economic review, September 27, 2001. 19) News (Lahore), December 7, 2001. 20) Andrew Small, “China’s caution on Afghanistan-Pakistan.” The Washington Quarterly (Vol.33 No.3, Jul 2010), pp.81-97. 21) Nation (Lahore), November 13, 2001. 117

China and Pakistan suggested that a multi-ethnic interim authority should replace the Taliban government in Kabul.(22) President Perez Musharraf visited Beijing in the third week of December 2001 and Chinese President JiangZemin reiterated support for Pakistan’s role in the global effort to control terrorism. Both agreed to continue consultation and coordination for facilitating “a fair settlement of the Afghan issue.” China extended humanitarian assistance to Afghan refugees from time to time.

Pakistan and China continued with their regular interaction during this phase, extending the scope of co-operation in economic, civilian and defense industry thermal and nuclear power generation, textiles and mining and natural resource development.

4.10 Sixth Phase: 2011-2012

The sixth phase of their bilateral relations, 2011-2012 continued with the gradual expansion of their mutualrelationships and exchanging of visions on local and internationalproblems. The year 2011 had beennominated as the day of Sino- Pakcompanionship. The Punjab government signed agreements with Chinese groups for the production of 120 MW of electricity during the visit of Punjab Chief Minister Shahbaz Sharif to China in April 2011. A MoU was signed in June for strengthening links between the media of the two countries.

The 4-day visit of Pakistan’s Prime MinisterYousafRaza Gilani to China in May was a mega event because it took place than three weeks after US military action in Abbotabad that had killed Osama Bin Laden. The two sides reiterated their firm belief in further strengthening their firm belief in further strengthening their bilateral relations. The Chinese side declared that Pakistaniregional integrity, independence and Sovereignity andmust be appreciated and its pains for encouragingtranquility and constancy in South-Asia ought to be documented and hold up”. (23)China and Pakistanaffirmed that “terror, extremism and separatism” pose” solemn hazards to localharmony, firmness and safety.

The frequency of bilateral visits increased after the May 2 incident and China assured Pakistan of its support.

The visits conducted those by included the Foreign Secretary, the Prime Minister, the Foreign Minister President Zardari (Urumqi in August), Bilawal Bhutto, a parliamentary deligation and one of senior army officers. China again expressed support for Pakistan after the US/ NATO attack on the salala border post.

22) Dawn, November 18, 2001; News, November 18, 2001. 23) See the text of the joint statement at the conclusion of Gilan’s visit to China: Pakistan Today, May 21, 2011.

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Two important visits took place in 2012. Prime Minister Yousuf Raza Gilani visited China in March to participate in the Boao Economic Forum and President Asif Ali Zardari visited Beijing in June to participate in Summit conferenceof the Shanghai Co-operation Organization.

A regular communication was maintained between China and Pakistan on global and regional affairs. China advised Pakistan to de-escalate tension in its relations with the US caused by the Salala border post incident and Pakistan’s decision to suspend the transit NATO/US goods through Pakistan in relation. Pakistan withdrew the ban of the transit facility on July 3 after a series of negotiations with the US.

A motorcycle bomb exploded close to the Chinese Consulate in Karachi on July 23, 2012.No damage was caused to the consulate. A banned baloch group Lashkar-e-Balochistan,claimed responsibility in order to protest against, what it described as exploitation of Balochistan’s resources by foreign countries? This statement was a reference to the fact that Chinese personnel were working on different mining and other development projects in Balochistan.

4.11 Economic Development, Industrialization & Trade

Trade and economic relations go back to the early 1950s but their expansion took place after the signing of two trade agreements in 1963.These were the trade agreement of January 1963 and the barter trade agreement of September 1963. The decade of the 1970s witnessed a real expansion and diversification in their economic interaction. These trends were sustained in the subsequent decades.

Economic ties have acquired salience in their bilateral relations and demonstrate China’s wide-ranging contribution tofinancialimprovement and industrialization of Pakistan. It can be explained as Pakistan is an exceptionalexemplar of how Chinese help asupporter.

Chinese had offeredpecuniary loans and grants either free of interest or very small interest which Pakistan will be able torepay in neighboringcommodities. It also provides technical co-operation, trained human power, training facilities and transfer of technology in different sectors of industry and related fields. Its contribution is the most significant in heavy engineering, nuclear power generation, thermal and hydro power generation road building and defense related industry.

Most of these projects are undertaken through bilateral agreements, protocols and Memorandums of Understanding (MoUs) that are signed whenever the top leaders, especially Presidents and Prime Ministers, visit each other. Though all protocols and MOUs are not implemented and more than one MOU may be signed on the same project the two countries have managed to complete a range of economic development and industrial projects. Since the beginning of the 21st 119

century, China’s private sector and private public partnership enterprises have got involved in economic co-operation with Pakistan. Some of these groups have established production units for consumer goods in Pakistan with local partners.

Chinese hadcompletedimportantpayment to economy of Pakistan and manufacturingimprovement but it still lacks the highest level and most efficient technology in various fields that can be made available by the US and other western countries.Similarly, China cannot meet all of Pakistan’s requirements for financial and technological support Pakistan thus countries to rely on the western countries for economic assistance and technological development. China cannot be a substitute to the west in economic development.

Further, it is not in Pakistan’s long term interest to rely on one source of support. The source of support and co-operation need to be diverstified. It is important that while pursuing close interaction with China Pakistan maintain wide- ranging relations with the US and other western countries.

China granted its first loan of US $60 million in 1964, which was interest free. Half of the loan was for purchase of goods from China and remainder was for various projects.(24) More loans were made available subsequently for various industrial and economic development projects.

The major industrial projects completed with Chinese credit facilities and technical know-how during 1971- 2000 included the Heavy Foundry, forge and Heavy Mechanical Complex at Taxila in 1971 & 1977 correspondingly. The work on their expansion and modernization was undertaken in the late 1980s. Other important China aided projects of the 1970s included two cloth mills in Azad Kashmir and KPK, a sheet glass plant, a fertilizer company and a cement plant in KPK, minuterange engeniering, pig steel/ ironfactory and two sugar mills in Sindh. Its involvement to power production and conduction was tooremarkable. This incorporatedbuilding of a conduction line from Thermal power units and Tarbella at Jamshoro and Guddu.

A hugepower generation Complex was setup at district Haripur (Khyber Pakhtunkhwa).Several other electronic and engineering projects, including TV manufacturing, were also completed during this period.

China also made an important contribution to Pakistan’s mining industry and helped to explore natural resources.It extended co-operation for mining projects in Balochistan which included analysis for an ore and ironplan, technological and economichold up for the mining plan at Saindak (1988)and later on in the 1990s,Chineseparticipate in the utilization of mineral and water resources atKhyber Pakhtunkhwa and Balochistan.

24) Yacco Wertzbarger The Enduring Intente: Sino Pakistan relations 1960-1980 (New York: Praeger, 1983), p.85. 120

Maincontracts for financialcollaboration were inkedwithin the visit of Li Peng, China’s Premier in November 1989 and Prime Minister Zhu Rongi in May 2001. Chief executive of PakistanGeneral Pervez Musharraffirstly made a visit to China in the month of January 2000 as wellgrantedvariouscontracts for financialcollaboration.

Zhu Rongji Chinese PremierVisited Pakistan in the month of May 2001, in association with the 50thcentennial of the founding of Sino-Pakpoliticalas well as the trade relationships produced MoUs on seven areas of economic co-operation.

These included economic and technical co-operation, tourism the Saindak copper and gold projects that envisaged giving a ten years lease to a Chinese company the supply of 69 locomotives and 175 passenger coaches that included a credit of U.S $100 million, a white oil pipe line from Karachi to Mehmood Kot in Muzaffargarh district, and telecommunication with Chinese financing of US $100 million. Prime Minister Rongji said in Islamabad that China is ready “to further strengthen the partnership of all-round co-operation with Pakistan and instill new vigour and vitality in the welcomingrelationships between both the states.”(25)

Mir Zafarullah Khan Jamali, Prime Minister of Pakistan visited Beijing in March 2003 and clinched several agreements of economic co-operation. These included the setting up of a nuclear power plant at Chashma, a soft term credit of US $500 million for 200 railway coaches in addition to the 175 committed earlier, development of tourism destination in Pakistan and a grant of US $9 million for different economical and technical co-operation programmes.

The visit of Wen Jiabao, the Prime Minister of China, to Islamabad the capital of Pakistan in the month April 2005 produced 21 agreements and MoUs in various sectors of economic co-operation, trade mining, housing, telecommunication and education. China offered credit facilities for some of these projects.

General Pervez Musharraf visitedChina in the month of February 2006 and Hu Jintao the president of China also visited to Islamabad the capital of Pakistan in the month November 2006 produced 13 and 31 agreements and MoUs respectively.

The sectors identified in these agreements and MoUs included agriculture, pesticides, earthquake, textiles, manufacturing infrastructure and public work, health and family planning, minerals, meteorological studies communications technology, tourism engineering services, trade and defense. A loan of US$300 million was offered for reconstruction of the earthquake hit areas in Kashmir and Pakistan.

25) Dawn, May 12, 2001

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A five year plan (2007-2011) to increase economic co-operation trade and investment was announced during President Hu Jintao’s visit (see above). The 14thconference of the Sino-Pakmutualcommission on Trade, Economic, Technicaland Scientific collaboration, held at Islamabad in December 2010, announced a five year Development Plan in addition to approving 36 projects worth over US $13 billion for Pakistan.(26)

Former President Asif AliZardari under took 8 visits to China between October 2008 and June 2012. (27) PrimeMinisterYousafRaza Gilani (March 2008- July 2012) visited China several times.The Foreign Minister of the two countries undertook exchange visit as well. These visits produced agreements and MoUs for expansion of co-operation in various sectors of economic co-operation, trade, joint investment and related fields.

Wen Jiabao, former Chinese Premier three day visit to Pakistan in December 2010 resulted in the signing of 35 agreements and MoUs, valued at US $35 billion. The sectors covered included wind and solar energy, agriculture, culture banking, financial sector, chemicals, mineral development, livestock, fish harbor, cotton yarn, railway reconstruction and defense.

An important road link between Pakistan (Gilgit-Baltistan) and China (Xinjiang province) is the Karakoram Highway (KKH), which was constructed over many years, initially by Pakistanis on the Pakistan side and by the Chinese on the China side. In 1966 and 1967, Pakistan and China signed agreements to make it more workable road link by constructing new bridges and improving the quality of road. It was launched in February, 1971. After two yearsChina and Pakistan determined to twist it into aglobal standard freeway. Chinese engineers and labour mainly from the People’s Liberation Army (PLA) were brought in to upgrade the Korakoram Highway. From Pakistan, the Frontier Works Organization (FWO) made an important contribution to road construction. It was inaugurated in June 1978 as a road link of international standard that facilitated land route trade and barter trade between Gilgit and Urumqi.

Tourist from Pakistan and abroad were allowed to use this route. Regular trade and traveling by traders and others go through the KKH most of the year. In November 2006,Pakistan and China signed a U.S $325 million agreement for constructional of an additional 200 km part of KKH from Raikot to Sazeen.(28)

The KKH was damaged by the floods and land slide in 2010 during Asif Ali Zardari visit to China in July 2010, the Chinese government agreed to provide US $500 million for repair of the KKH. China alsomade available manpower for the repair and rehabilitation work in 2010-2011.

26) Daly Times, December 3, 2010. 27) President Asif Ali Zardari visited China in October 2008, Fabruary, 2009, April 2009, August 2009, November 2010, August 2011, & June 2012. All of these were not bilateral state visits.

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The Chinese Government also agreed to cover the 85 percent cost of construction of two highways in Gilgit Baltistan these are the highway linking Sakardu with Jaglot (165 kilometers) and the road linking Thakot with Sazin (135 km). Chinese engineer’s labors and PLA personnel worked on these projects.

Pakistan and China signed several MoUs for the supply of railway locomotives (engines) and passangers coaches against a Chinese credit facility. China supplied 69 railway engines and 420 passanger coaches during 2002-2005. The Chinese were to supply more railway engines and passenger coaches and transfer technology for their production in Pakistan. However a controversy erupted in Pakistan on the quality and suitability of railway engines and passenger coaches in 2009-2010. This disrupted the deal but by that time most of it had been completed.

China made a singular contribution to the construction of the Gwadar port in Balochistan. The total estimated cost of the Gwadar port in 2002 was US $248 million.The Chinese Government agreed to provide US $198 million which included a grant of US & 49 million and an interest free loan of US $31 million. The remaining US $ 118 million was made available as credit by Exim Bank of China.(29) Additional credit facility of US $22.26 million was agreed by Exim Bank in March 2006. The Gwadar project was launched on March 22, 2002 and the Chinese work was completed in 2006. China also offered co-operation for the construction of Makran Coastal Highway. It was also interested in running the port but Pakistan gave the operational control of the port to a Singapore company.

China has contributed to the energy sector in Pakistan. It agreed in 2002 to support two coal based power projects in Jherruck near Thatta and two power plants in Thar coalfield. In April 2011 China expressed strong intrest in investing about US $15 million in Pakistan’s energy secor.In February 2009 China agreed to provide US $ 449 million credit for the Neelum-Jehlum hydro-electric project. In August 2009,China and Pakistan signed a MoU for the construction of Bunji hydro-electric project in Astore district of Gilgit Baltistan. Similarly, China agreed in 2011 to support the Diamer Bhasha dam project. Pakistan has shown interest in China’s technology for the construction of small hydro-electric projects.

Pakistan effort to get nuclear power plants from the US and the Europe made no headway. China agreed in the early 1990s to provide technology and financial support for building a nuclear power plant in Pakistan.

28) Dawn, November 25, 2006; Pakistan Today (Lahore), July 29, 2011. 29) See for details Nation, March 23, 2002 & October 30, 2002; Daily Times, December 27, 2002.

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In August 1992 construction work a nuclear power plant was started at Chashma, near Chashma barrage on the left bank of the Indus and 32 kilometers from Mianwali in the in the Punjab. It (Chashma-1) was a Chinese supplied power reactor with a capacity of 300 MW which began commercial operation in September 2000.

The second Chinese supplied nuclear power reactor was erected at the same place (Chashma-2) that had a capacity of 330 megawatts. Construction works started in December 2005 on the basis of MoU signed in March 2003 and it was inaugurated by FormerPrime MinisterYousufRaza Gilani in May 2011. Chinese finanacing for this project was US $350 million.

From 2007, Pakistan began to explore the option of getting more nuclear power plants from China. The Chinese government agreed in October 2008 to help establish two more nuclear power plants (Chashma 3 and Chashma 4) with the total capacity of 680 MW. China agreed to provide 82 percent financing as a 20 year soft loan of the total cost of these two nuclear power plants. The construction work on Chashma-3 and Chashma-4 has been going on since 2009-2010 and are expected to start commercial operation by 2016. Pakistan plans to have seven functional nuclear plants of 1,100 MW each by 2030 in addition to the four units at Chashma, producing a total of 8,900 MW of electricity.

Trade, is an important aspects of economic relations. The two trades’s related agreement in 1963 laid the function of active trade relations between Pakistan and China. Two types of trade relations exist between China and Pakistan: land route trade, between Gilgit Baltistan and Xinjiang province of China through the KKH, and the regular bilateral trade.

In November 2003 China and Pakistaninked a Preferential Trade Agreement (PTA) which had becomefunctional on 1st January 2004.The two sides decided to move on to a Free Trade Agreement in November 2006 which was to become effective from January 1, 2007 but this date was shifted to July 1, 2007. Custom duty on various goods was reduced gradually. By January 2008 both countries reduced the tariff on 1,253 items to zero to facilitate bilateral trade. (30)

A trade related agreements, named as the Early Harvest Programme, initiated on January 11, 2006, was merged with the FTA. A combinedspeculationcorporation was recognized with remunerated funds of 200 million USD in July 2007 for promoting trade and investment.

30) Dawn, April 04, 2005.

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The land route trade between Gilgit-Baltistan and Xinjiang continued to grow, albeit, slowly. This route on thedirections of Chinese remained closed for several months after the terrorist attacks of September 11, 2001.

They adopted various measures to control smuggling and established a Border Trade Zone in June 2005 to facilitate trade.By the end of 2005, the land route trade amounted to US $340 million.(31)A Pakistan Trade Houuse was established at Kashgar in September 2005. In July 2010, the first Chief Minister of Gilgit-Baltistan, Mehdi Shah, led a deligation to the three day trade fair in Xinjiang. A Chinese delegation visited Gilgit Baltistan in August 2010 to explore investment opportunities.

Trade expansion agreements were signed between China and Pakistan from time to time, especially during the bilateral visits of the top leaders.However bilateral trade increased slowly. By the end of 2004, bilateral trade amount of US $ 3 billion. Trade volume reached US $ 6.7 billion in 2009 and US $ 8.7 billion in 2010. The two governments plan to hit the businessgoal of 15 billion USDupto2015. (32)

Trade between Pakistan and China is highly imbalanced. It is decisively in favour of China. The trade defict to the disadvantage of Pakistan, expended from US$ 245.512 million in 1998-1999 to US $ 594.465 million in 2002-2003.(33)It reached the level of US $620.334 million in January–July 2004.There was no respite in the leter years, although China gave special concession to Pakistan from time to time in order to reduce trade deficit. In 2010-2011, Pakistan exported large quantities of home textiles, cotton yarn, garments, copper and copper scrap, mineral products, leather goods, surgical and medical instruments and fish products. This helped to earn foreign exchange but Pakistan’s imports from China continued to be on the high side because imports not only include goods, products and services for civilian sectorsbut also military equipment and weapons and technology that tilt the balance in favour of China.

4.12 Defense & Security Co-operation

Pakistan and China have cultivated and strong multi-dimensional relations in the domain of defense and security.The strength of this relationship has contributed to sustaining positive interaction in other domains.

The defense and security related interaction covers consultation on security issues at the highest state level, exchange visits of the top commanders who explore options to expand co-operation between the millitary of both the states,

31) Nation, Janyary 22, 2006; June 23, 2005. 32) Daily Times, January 29, 2011; Dawn, December 19, 2010. 33) Dawn, September 9, 2003.

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joint military exercises, supply of military equipment and weapons including combat aircraft and naval ships, transfer of technology in defense production and the setting up of defense industry in Pakistan.

Pakistan’s defense and security relationship with China dates back to 1964 when Prime Minister ZhouEnlai visited Pakistan in month of February and talked aboutPakistani security and defensematters. These affairs were repeatedly taken up throughAyub khan the president visit to China in the month March 1965. Chineseaffirmedhold up to Pakistanisovereignty and regionaluprightness and adopt a ProPakistanitemperament on Pakistan’sissues with Indiafor the problem of Kashmir. In 1965 ChinesehelpedPakistan in Kutch War,at the Rann with India. Its assistance to Pakistan in the 1965 fighting between Pakistan and India was uninhibited, and included diplomatic support and military moves on the Sino-Indian border to cease Indian pressure on the Pakistan border.(34) The US imposed an arms embargo on Pakistan and India after the outbreak of the war. This decision hit Pakistan hard because it was more dependent on US arms and weapons than India. After the end of the 1965 war China agreed to provide weapons and military hardware to Pakistan in order to make up for the weapon losses in the war.

The first installment of Chinese weapons reached Pakistan towards the end of 1965 or the beiging of 1966.MIG-19 Chinesefighter aircraft and T-59 Tanks which were firstdemonstrated in the parade of Pakistan dayin23rd March 1966. The supply of weapons and military hardware, as an outright grant or on soft-term loan was a major Chinese favour to Pakistan.

Greater security related interaction took place in the 1970s. Pakistan’s senior most military officers accompanied ZA Bhutto when he visited China in February 1972, May 1974 and May 1976. The military services chiefs and military delegations of the two countries visited each other quite frequently in the 1970s. Their visits increased after the Soviet troops marched into Afghanistan and installed a government of their choice in Kabul. Two Naval Ships Chinaanchored the first-ever harbornamed at Karachi in December 1985.

China and Pakistan agreed to continue defense co-operation during the visit of General Muhammad Aziz, Chairman Joint Chief of General Staff, to China in January 2002.

This commitement was made against the backdrop of the terrorist attacks in the US in September 2001 and India’s decision to suspend bilateral links with Pakistan in the aftermath of the terrorist attack on the Indian parliament in December 2001.

34) Anwar Syed, “China & the Indo-Pakistan War of 1965.” Orbis, fall 1966, pp859-880

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The joint statement at the termination of former President General Pervez Musharrf’s visit to Beijing in November 2003 stated that both countries had agreed to strengthen military co-operation. President Musharraf described Pakistan-China relations in the defense sector as excellent and hoped that these would grow further.”(35)

Similar views on expansion of defense ties were expressed by former Premier Shaukat Aziz in his visit to China in 2004. (36)Wen Jiabao the premier of China talked aboutPakistan’s Defense Minister Rao Sikandar Iqbal in Beijing that China assigned great importance to military collaboration between Pakistan and China and he expected that it would keep growing to “meet their defense requirements.”(37)Similar views were expressed during a meeting between China’s Defense Minister General Liang Guanglie and Pakistan’s Army Chief General Ashfaq Pervez Kayani in Islamabad in June 2010. China’s Defense Minister said that “co-operation between the Chinese and Pakistani armed forces is exemplary and has been fruitful… China would join hands with Pakistan to bring defence cooperation to a new high.”

In March 2004 China offered a loan of US $12 milion for Pakistan’s armed forces and their training.Another loan US $180 million was offered to the Pakistan military for capacity building and training in may 2010. In May 2004, China promised to meet the defense requirement of the Pakistan Navy and works towards further strengthening ties between the two Navies.

China has made a valuable contribution to setting up the defense industry, beigining in the early 1970s.It provided financial support equipment and technical support to set up defense industry in Pakistan. The defense production projects that have partial or total Chinese contribution include: tanksreconstructionplant at Taxila, tanksbuilt-upindustrial unit at Taxila for production of various types of tanks or their overhaul, modernization of the ordanance complex at Wah, an anti-aircraft gun factory, and the Kamra Aeronautical Complex for overhaul and production of various types of aircraft, including F-6 and overhaul of Mirage aircraft. The Heavy Foundary and Mechanical Complex at Taxila established by Chinese funding and technical skills, produce goods and material used in defense industry.National Electronics Complex has a direct relevance to defense.

There are several China aided defense projects these include Al-Zarar and Al-Khalid tanks Karakoram K-8 training aircraft, FC-20 aircraft and JF-17 thunder multi purpose aircraft.

35) News, November 6, 2003, Dawn November 6, 2003. 36) Nation, Decmber 19, 2004. 37) Daily Times, January 14, 2005.

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Pakistan obtained from China weapons, ammunition and military equipment, including communications and transport. Other important items included helicopters for use by the Navy and the Army. Combat aircraft of different type (in addition to JF-17 thunder) have also been obtained. In November 2006,Pakistan and China signed an agreement for China to supply an Airborne Early Warning System (AWACS) to Pakistan.

In March 2002,Pakistan and China signed a MoU for co-operation and collaboration in defense production.

Another important agreement was the Charter on Defense Co-operation signed in April 2003 for increasing co-operation in defence industry and technology.

China launched a project in July 2005 for the building of F-22P four in number frigates for Pakistan. The first three were to be built in Shinghai and the fourth in Karachi after the transfer of technology. The Pakistan Navy received first three the F-22P frigates in October 2008, December 2009 and November 2010. In March 2009 Chinese engineers began to transfer technology and establish necessary facilities for construction of the fourth frigate in Karachi.China and Pakistan agreed in March 2011 to manufacture missile boats for the Pakistan Navy.

Pakistan and China are also co-operating in space and satellite technology. In March 2006, China provided meteorological satellite data reception equipment for managing natural disasters. Pakistan and China also signed an agreemenrt in September 2009 and October 2010 for Chinese financial support for launching a communication satellite to replace the exisiting satellite, PAKSAT-1 that completed its life span in November 2011.(38)

The broad framework for co-operation between China and Pakistan in nuclear technology and scientific development was provided by the contract on technological and scientific collaborationMay 1976 and the contract of collaboration for peaceful uses of nuclear energy (September 1986). China’s co-operation with Pakistan in the nuclear field has caused a lot of controversy in the West and India. Pakistan and China argue that their co-operation in the nuclear field is limited to peaceful purposes. The Chinese nuclear reactors at Chashma are purely for power generation and these reactors are under the IAEA safeguards.

Both China and Pakistan deny any co-operation for nuclear weapon development, although western sources claim that the Chinese have made a significant contribution to the development of Pakistan’s nuclear weapons programme.

38) Dawn, October 30, 2010, September 05, 2009; Daily Times, September 19, 2009. 128

Western sources claim that Cina provided Pakistan with sensitive information about the design of a nuclear bomb.(39) This claim is denied by Pakistan and China. It is also widely believed at the international level that China has provided unspecified support to missile development in Pakistan.

4.13 The Kashmir Problem

China views Kashmir as a dispute between Pakistan and India and discardsIndian claims of dominion over the Kashmir. It has shown a tilt towards Pakistan’s standpoint on Kashmir, time and again.(40) On the question of how to resolves this problem, its policy has shuttled between non partisanship, emphasis on resolution of the problem through bilateral dialogue, to support the exactly right of independence for the Kashmiri community.

In the period of pre 1964 the govt Chinatake upanunbiasedsituation with prominence on the requirement of undeviatingdiscussions between Pakistan and India. In October 1956, Kashmir was not talked about in the combinedproclamationissued at the ending of the visit of H.S. Suhrawardy the Premier of Pakistan to China. China’s leaders quietly suggested direct talks with India on Kashmir. Pakistan was not favourably disposed towards this advice. Therefore the issue did not surface in the joint statement.

In December 1956, Zhou Enlai,Chinese Premier argueswithin his visit to Pakistan that the Kashmir dispute was created by the “colonists” and they should not be allowed to interface in it.Similar toother conflictsamongst Afro-Asiacountries, “Kashmir could be settled amicably” by both sides.(41)Once again Kashmir was not included in the mutualproclamation at the ending of Zhou Enlai’s visit to Pakistan in December 1956. Mao Zedong the Chinese Leader declared that China willuphold a unbiasedsituation on Kashmir and he expected that the communist countries would also uphold a unbiasedposition on Kashmir and Pakistan welcomed this statement but criticized Zhou Enlai’s suggestion of direct talks with India. (42)

A slight tilt towards Pakistan’s stand on Kashmir exterior in the mutualstatement issued subsequent to the inking of the 1963 boundaryagreement between Pakistan and China. The Chinese leadership expressed appreciation for Pakistan’s effort to seek an amicable solution to the Kashmir problem. However, the overall policy of neutrality remained intact.

39) Mehnaz Isphani, Pakistan: Dimensions of insecurity, Adelphi Papers 246 1990, pp.61, 73. 40) Hassan Askari Rizvi, “China & Kashmir”, in KF Yousaf (ed), Perspectives on Kashmir ( Iskamabad; Pakistan forum, 1994), pp.215-227 41) Anwar Syed, china & Pakistan, p.69. 129

42) K. Arif (ed), China-Pakistan relations, p.15 (Statement of Pakistan’s Foreign Minister dated July 20, 1957.)

The major shift in China’s policy on Kashmir manifested itself the visit Chinese Premier during Zhou Enli to Pakistan in the month of February 1964 in opposition to the background of the Indo-Chineseboundary war in 1962and the successive reterioration of their relationships. The combinedstatementunderstand: “They had spoken the expectation that the Kashmir quarrel will be determined in agreement with the desires of the community of Kashmir the same aspledge to them by Pakistan and India.”

The China’s position on Kashmir become categorically in favour of Pakistan in 1970. The joint communiqués issued to China at the ending of Z.A Bhutto’s visit in 1972, 1974 and 1976 holdunambiguousreference to the actual right of independence for the community of Kashmir and their struggles to attain this were describe as a “now struggle.”From time to time, the need of dialogue on this issue was also emphasized along with an emphasis on the UN resolutions on Kashmir that recognized the actual right of autonomy for Kashmiri citizens.

This policy began to revert to the pre-1964 position in the 1980s as China’s relation with India improved. China and India revived their diplomatic relations in 1976 and a dialogue process was initiated in the 1980s that moderated Chinese stand on Kashmir.

ZhaoZiangChines Premier visit to Pakistan in the months of May to June 1981 manifested the shift in China’s policy on Kashmir. There was no reference to the actual right of independence for the people Kashmirand the emphasis was on the requirement of understandingamong the countries of South-Asia.

Since then China has described Kashmir as a bilateral dispute that needs to be resolved by peaceful bilateral dialogue. The Chinese leaders continue to maintain a sympathetic disposition towards Pakistan’s position on Kashmir and support Pakistan’s efforts for seeking a negotiated and peaceful solution of the problem but they have given-up the idiom of the 1970s on Kashmir.

As Sino-Indian relations moved towards normalization with expanded diplomatic interaction and the growing trade, China avoided sharp and bitter criticism of India. The emphasis is on conflict management and conflict resolution by dialogue and peace on borders. The Chinese leaders urge the leaders of South Asian states to improve their relations with one another on the base of autonomous, non-interference and equality, inevery one’s dealings, peaceful and co- existencedecision of quarrel through bilateral dialogue. In July 2001, China’s Foreign Ministry described the conflicts between India and Pakistan as “a legacy of history” and stated that China expects both to achieve “a just and rational solution” of their problems, including Kashmir“with the basic

130 interest of both the peoples in mind through holding peaceful dialogue.”(43 Zhu Rongji the Chinese Premiertoldat Islamabad during his visit in May 2001, that the

Kashmir problem is “a left over of history” and that “China supports and agrees with Pakistan’sposition for a diplomaticresolution of the Kashmir dispute.”(44)

China has encouraged India and Pakistan, especially the latter, to difuse tention at the bilaterall level and addresses all problems through dialogue. China was perturbed by the escalation of tensions between Pakistan and Indiasubsequent to the terrorist assault on the India’scongress on 13th December2001. It advised India and Pakistan in 2001, 2002 to de-escalatethe conflict. Similarly, it advised moderation to both sides after the terrorist attack in Mumbai on November 26, 2008, that disrupted the dialogue between India and Pakistan.

The decision of India and Pakistan was welcomed by Chinato establish ceasefire on the Line of Control on November 26, 2003, which has generally survived since then. Similarly, China was supportive of the dialogue between India and Pakistan during 2004-2008 that attempted to evolve mutually acceptable solutions to different problems, especially Kashmir. The revival of the dialogue between the two countries in 2011 was also welcomed by China because peace between India and Pakistan fits into China’s policy of peace on its border.

China views any sustained tension and conflict between India and Pakistan as a destabilizing developmentfor the whole region.

Minor irritants developed between India and China on Kashmir. In August 2010, China denied visa to an Indian Army Lt-General serving in Kashmir. In January 2011, China refused to stamp visas in the passports of the residents of Kashmir; the visas were stamped on a separate page stapled in the passport to assert the separateness of Kashmir from the rest of India.

Despite the changes in tone of Pakistan-China relations and China’s growing interest in global and regional politics along with an emphasis on peace along the border. China’s relations have not been adversely affected with Pakistan. New issues and problems enter their interaction but they find ways to deal with them at the diplomatic level.

Some concern was shown in Pakistan when China first began to improve its relations with India and moderated its idiom on Kashmir. However, China was able to demonstrate by its actions that it continues to view Pakistan as its first priority in SouthAsia. The interaction between China and Pakistan has expanded while China omproved its relations with India.

43) News, July 25, 2001. 44) Dawn, May 12, 2001.

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China has been successful in maintaining effective communication with Pakistan on regional and global issues and its contribution towards Pakistan’s economic and industrial development continues to be on the rise. It has more active interaction with the Pakistan military than the Indian military. This, in a way, is success of Chinese diplomacy that has kept Pakistan reassured of Chinese support.(45) It also reflects Pakistan’s self-confidence and an appreciation of the imperatives of China’s new global profile. Pakistan does not hang the totality of relations with China on china’s position on Kashmir.

4.14 Terrorism

Pakistan’s Gilgit-Baltistan region and China’s Xinjiangprovince developed trade and economic relations in the 1970s and the 1980s because of the KKH road link and the policy of two governments to encourage barter and other trade between these regions.Many Pakistani business groups established their offices in Urumqi and Kashgar or estsablished partnership with Chinese business people. This was coupled with softenof the China’s govt diposition in the direction ofreligion and racial minorities.This gave greater freedom to Xinjiang Muslims (Uighur Muslims) to practice Islam more openly than was the case in the past. A good number of Uighur Muslims used to travel to Islamabad by KKH to fly-out from there to Saudi Arabia for the annual Islamic Pilgrimage.

The Muslims of Xinjiang were influenced by Islamic revivalism caused by Iran’s Islamic Revolution (February 1979), the activism of Islamic movements elsewhere and the militant Afghan-Islamic confrontation to the Soviet Unionarmed forces in Afghanistan. The Afghan-Islamic resistance movement was nurtured mainly in Pakistan’s tribal areas. China opposed Soviet Unionarmed forcesinterference in Afghanistan and silentlysupports the millitaryconflict to dislocateSoviet Union’s army in Afghanistan. Some Uighur activists were attracted towards this movement which led to the gradual emergence of a militant tradition in parts of Xinjiang. Some Uighur activists joined the Afghan resistance because they could travel via Gilgit-Baltistan to Pakistan Tribal Areas and Afghanistan.

After the exit of the Soviet troops from Afghanistan (February 1989), the Afghan War veterans were searching for new causes to fight for. They found Kashmir next door. Their ideas and methods influence activist Uighur Muslims in Xinjiang which witnessed some Islamic radical activity in the 1990s, especially after the Taliban assumed power in Kabul in 1996.

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45) For an analysis of the changing relationship of China with Pakistan & India, see Jin Dong Yun, “Beijing’s” balancing act: courting New Dehli, re assuring Islamabad”. Journal of inernatiol affairs (Vol.64 No 2, spring/summer 2011), pp37-54

The Chinese government was upset by the growing signs of Islamic militancy in the Xinjiang region. It approached the Taliban government in Kabul for discouraging Uighur activists from getting involved with the Taliban movement in Afghanistan. The Taliban government did not respond positively. The Chinese government also approached Pakistan in the early 1990s for co-operation to control the spread of Islamic radicalism in Xinjiang. Pakistan responded positively and agreed to work with the Chinese authorities to control the movement of radical Islamic elements across the Pakistan-China border. Meanwhile the Chinese government decided to suppress the East Turkestan Islamic Movement (ETIM), a radical Islamic movement that challenged Chinese rule in Xinjiang. Pakistan co- operated with the Chinese government by increasing security arrangements on the Pakistani side and it searched for Uighur activists that were demanded by the Chinese government because they had crossed into Gilgit-Baltistan and taken refuge in some Islamic seminars or elsewhere. If and when these people were located, Pakistan handed over to the Chinese authorities.(46)

China supported the UN backed global efforts to control terrorism in the aftermath of the terrorist attacks in the US. The UN Security Council and the General Assembly sought co-operation from its members to control terrorism that manifested in the US in September 2001. China was part of this global effort. In March 2002 China supported a call by US president George W. Bush for deepening international co-operation for fighting terrorism.(47) China supported Pakistan’s decision to join the US-led global efforts against terrorism. When in January 2002 Pakistan placed restrictions on some militant Islamic organizations,China welcomed the decision.

The spokesman of the Chinese government said that President General Pervez Musharraf’s speech showed “Pakistan’s determination to suppress religious extremist forces at home and stressed its willingness to solve theDispute with India through dialogue.”(48)

China and Pakistan have complex and uneasy relationship regarding terrorism in Xinjiang. On the one hand the Chinese authorities express a lot of a appreciation of Pakistan’s commitement to eradicate terrorism from the region.They also praise Pakistan’s co-operation on counterning terrorism and China and Pakistan have signed several MoUs for strengthening security as well as helping each other to root out this menace. The heads of government state of the two countries repeatedly commit them to fightterrorism jointly.

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46) Pakistan’s Foreign secretary Inam Ul Haq said in Washington DC in August 2001 that Some Xinjiang extremist elements had crossed over to Pakistan. News, December 7, 2001. 47) Nation, March 13, 2002. 48) Dawn, January 14, 2002; See also the statement of China’s Vice Foreign Minister on August 2002 on Pakistan’s “clear-cut” policy on countering terrorism. August 28, 2002.

On the other hand, whenever violent incidents take place in the Xinjiang region. They build pressure on Pakistan to take action against the Uighur militant and terrorist elements based in the Tribal Areas or in Gilgit-Baltistan. The only redeeming feature of Chinese criticism is that they donot engage in public condemnation of Pakistan.

In July 2004, Pakistan and China decided to pursue a joint counter terrorism strategy. Pakistan’s former Foreign Minister Khursheed Mehamood Kasuri assured the Chinese authorities that Pakistan would not allow militant elements to use Pakistani territory for their terrorist activities inside Pakistan and beyond its borders.(49)They exchanged views on countering terrorism on several occasions during 2004-2009. In April 2009, former President Asif Ali Zardari and China’s former Prime Minister Wen Jiabao agreed, among other things, on “more intense relations in jointly fighting terrorism.”(50) Pakistan’s former Interior Minister Rehman Malik said that the ETIM had established a “syndicate” with the Taliban and that Pakistan and China were co-operating “to stampout violent groups that span their borders.”(51) The fourth symposium on interface and self- assuranceconstructionprocedures in Asia was apprehended in Shanghai, China Prime Minister from May 20-21, 2014. Prime Minister Xi used this forum to call for the creation of“new regional security co-operation architecture” for Asia and met President Mamnoon Hussain afterwards. The two discussed ways in which the two countries can combat terrorism post the brutal bombing in an open market in Urumqi, capital of Xinxiang. China made positive comments about Pakistan’s cooperation in countering terrorism in 2010 and 2011.

China has criticized Pakistan when violent incidents occurred in Xinjiang previously and the general belief was that the separatists are trained in Pakistan.

The Chinese authorities had to use a lot of coercive power of the state to control the situation on both occasions.

Despite the Chinese media criticism of Pakistan and cautious official comments about the linkages of the militants involved in these two incidents with the militant group based in Pakistani Tribal Areas, the government of Pakistan supported the Chinese action against the Uighur militant groups.(51) It may be mentioned that the Chinese Government never accused the Pakistani state of nurturing and training the Uighur militants. The present government is acknowledging China’s concerns in particular about the East Turkestan Islamic movement (ETIM) declaring it a common enemy of both China nad Pakistan.

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49) Daily Times, July 6, 20014; Dawn, June 28, 2004 & July 3, 2004. 50) News, April 18, 2009. 51) Daily Times, June 13, 2009.

In addition to working closely with the Chinese government for controlling the Uighur militancy, Pakistan also opposed attempts by some countries to criticize China in the GenevaBased Human Rights Commission for human rights violations. When, in 2009, some Islamic countries explored the idea of taking up the issue of the rights of the UighurMuslims, Pakistan opposed it and blocked the move. Pakistan’s foreign office maintained that the unrest in Xinjiang was “China’s internal matter. So we donot see any role for any international organization in this internal matter of China.”(52) Commenting on the trouble in Kashgar in 2011, Pakistan’s foreign office outlined Pakistan’s policy in these words: “Pakistan will continue to extend its full co-operation and support to the government of China in opposition to the ETIM.” The statement also said: “all incidents of terrorism are deplorable and Pakistan is fully confident that the patriotic people of the Xinjiang Autonomous region of China and, in particular, Kashgar as well as the Chinese government will succeed in curbing the attacks.”(53)

The first Pakistan-China Naval exercise was held in October 2003. Since then Naval and Army exercises are held from time to time. In April 2011 the Navies of Pakistan and China held their first joint anti-piracy exercise in the Gulf of Aden, close to Somali coast. The special services of the military held their exercises in 2004, 2006, 2010 and 2011 in order to learn from each other for planning and execution of counter terrorism measures.

The Pakistan Army has conducted special operations targeting ETIM militants. Some ETIM activists were killed in these operations. The most significant deaths were those of the ETIM Chiefs Hassan Mahsum in South Waziristan in 2004 in an encounter with the Pakistan Army, and Abdul Haq Al–Turkistani in North Waziristan in a drone aircraft attack in 2010. In June 2010, China gave a grant of US $180 million for enhancing the capacity of the law enforcing agencies, mainly police and provision of new equipment.(54)

Another issue of concern in Sino-Pakrelationships is the safety of China’s engineers and workers assigned to various projects like dams, roads, Gwadar port and industrial projects in various parts of Pakistan. During 2004 and 2011, twenty- one violent incidents took place involving Chinese personnel on different projects. These include armed attacks resulting in the death and injuries of Chinese personnel, industrial mishaps, and kidnappings of ransom.Nineteen Chinese were killed and 14 persons were injured in these incidents. Several were kidnapped by militant and criminal elements. Only in one instance the government of Pakistan paid compensation because the rescue operation by the security forces resulted in

135 the death of one person and one person was injured. The Government of Pakistan strengthened their security arrangements.

52) Dawn, July 24, 2009. 53) Pakistan Today August 2, 2011. 54) Daily Times, June 8, 2010.

The Chinese Government did not withdraw their personnel from Pakistan, although at times they were temporarily pulled out of some project.It however demanded enhanced security for them.In August 2007, China and Pakistan agreed to setup a joint security forces for Chinese personnel in Pakistan. It is not known if this proposal has been implemented.

4.15 Humanitarian Assistance & Diplomatic Strides

China and Pakistan extended humanitarian assistance to each other in the event of natural calamities like earthquakes and floods. Pakistan’s president and Premiersend the letter of compassion and assistance with reference to the loss of life and property due to the earthquake in Xinjiang in February 2003 and floods in China’s southern and centeral provinces in July 2003. Pakistan provided medicine worth US $50,000 for fighting the Severe Acute Respiratory Syndrome (SARS) that hit parts of China. Pakistan again expressed sympathy to China for the loss of life and property due to earthquake in Qinghai province in April 2010.

In February 2006, the Pakistan Navy conducted a helicopter rescue operation to rescue a Chinese crew member who was injured on a Chinese merchant ship which was nearly 250 nautical miles away from Karachi. The helicopter airlifted him from the ship for medical treatment.

China expressed grief and support for Pakistan in case of major earthquakes and other natural disasters. It also offered material support for humanitarian causes. In August 2000, China provided goods and medicines worth RS 12 million for Afghan refugees in Pakistan.It had made donations in the past as well for Afghan refugees. The total Chinese contribution to Afghan refugees comes to about U.S $2.6 million during the last twenty years.(55) China’s contribution for flood affected people in 2003 amounted to US $200,000; The Chinese Red Crescent Society donated additional US $ fifty thousand. In 2006, the Chinese donation for flood relief amounted to US $200,000.

The Chinese were equally helpful when Pakistan suffered from floods in 2010 and 2011.

China signed a Mou in 2009 for rebuilding and rehabilitating three major cities of Azad Kashmir destroyed by the 2005 earthquake. Additional US $375,000 was provided by different Chinese firms for the victims of the earthquake. Earlier in

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2004, China donated U.S $50,000 to help Pakistan’s effort to control and prevent the Bird Flu epidemic.

55) Dawn, Seotember 27, 2000 & August 30, 2000.

China and Pakistan shared views on the expansion of the Security Council. As they were oppsed to increasing the number of permanent members and wanted to created consensus on expansion of the Security Council, they decided to work together for that purpose.

Pakistan’s support to ‘one China’ has been unequivocal and it opposed Taiwan’s representation in the UN whenever this issue is raised informally by some countries. Similarly Pakistan has supported China on Tibet and human rights issues in different UN forums and outside. In October 2010, Pakistan crictized the award of the Nobel peace prize to jail Chinese dissident Liu Xiaobo. China, Pakistan and 17 other countries boycotted the ceremony for the award of the Nobel peace prize to Chinese dissident in December 2010.

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Chapter-5 Prospects for New Phase Collaboration

5.1 Iran-Pakistan Gas Pipeline:

The Iran-Pakistan Gas-pipeline project will be extremelyvaluable for both the countries. Iran observes in the pipe-line not merely afinancialsupport at aninstancewhile the United States and its European followers are frustrating to grow weaker its economy, but as well a chance to make an indestructibleextendedperiod economic and politicalreliance of billions of China’spatrons on its gas project. Pakistan also views the pip-eline project as the resolution to its powersafekeeping challenges. Pakistanihousehold gas manufacture is declining and its significanceconfidence is rising by leaps and bounds. Inlinking itself by the global second leading gas reservoir, Pakistan willpromiseconsistentprovision for decades to come up. If the gas-pipeline would be making longer to Indian Territory it canalso be atool for firmness in the frequentlystressedIndo-Pakrelationships. The chiefadvantage of the pipe-line is to make Pakistan a transportationcountry and will achieve millions of USDyearly from shipmentcost.

Theagreement of the gas-pipeline is a tactful setback for the Obama’s government, which canweaken its strategy of deteriorating Iran financially. Distinct the Bush government which vociferously opposes the plan, together with some unambiguousstatementconcerning the plan by the United States secretary Mr Condoleezza Rice, the group of Obamachooses to stay mute on the matter. This can be to make easy rapprochement through Tehran or to Pak- USrelationshipsworsening at anunstableoccasion.

Whereas for US the pipe-line is abhorrence, for Russia it is an opening stage. For a number of months, Moscow had been anxious that Iran’s gas maycontend with Russia’sexport on the markets of Europe. A populationinside the E.U that seeks out to lower its reliance on Russia had been promoting the building of the Nabucco pip-eline to propelSea gas at Caspian to Europe which willbypass Russian territory. Consequently it is in Russian interests to overturn the Nabucco plan by turn away Irani gas taking away from Europe and lock it to the Asia’s markets which intended for Russia is derived (80%) of gazprom’s exportsearnings comeing from the west-Europe markets. Toward this ending, Gazprom is eager to take part in the Iran-Pakgas pipeline development. ‘‘We are geared up to connect the venture as shortly as we obtainatender,’’ Anatoly Yankovskythedelegatepower minister of Russia.

It formulates the Iran-Pakistan gas pipeline an insolvable bone of contention between Moscow and Washington. As for the United States the gas pipeline is a web geo-political failure, as for Russia it is a further way to bring about its monopoly over Europe. Chineseas wellaim to potential gain from the gas pipeline. Iran’s gas 138

will run to the Gwadar port at Balochistan, build with China’s funding, in the Caspianocean wherecommencing the gas canmoreover be transported to China like LNG or carriedthroughout a projected pipe-line going awayNorth, andfunding by Chinese, all along the South to North KKH, the maximumcementedintercontinentalhighway in the whole world, linkingChineseXinjiang areawith Northern Areas of Pakistan, the Karakoram mountarray.

Other than for every the regional power the Pak-Iran gas pipeline might have the mainlycollision on India. It willacquire an expansion of just 376 miles to transport Iran’s gas to Indian region. This will be a game shifting, tacticalimpede as it willgenerate an intolerable energy reliance of India resting on Iran. Disagreement above the pricescheme and the shipmentpriceas wellgroundsIndia to dropattention. However all this can easily alter in the prospect as Indianpowercrisis deepingen- some 400 million previouslyundergo from powerscarcity. Due to US pressure India with drew from the project in 2009. Despite US oppositions, Pakistan wants to finish Iran gas pipeline. The pipeline is expected to cost a total of $1.5 billion. The Iranian half of the pipeline is complete and Pakistani Government on July 2014 presented a proposal to complete Pak-Iran gas pipeline to ministry of Petroleum for Iran. (1)

Initially, in spite of Russian’sattention, it is yetobvious that the both sides would be capable to lift the 7.5 billion USD necessary to acomplish the plan. Secondly, in Balochistan, where the pipe-line is thought to run, is solitary of Pakistaniwekest and mainlyagitatedprovince. In current years, it had been a battlefield of militia belongs to Baloch tribe, whichrevulsion the govt of Tehran as a lot as they abhorrence the solitary in Islamabad. Al-Qaeda or Talibanassociates who encompassapparentlyenthused from the tribal boundaryarea to the Balochistan and which are well-known for their hate of both govts mightlocategeneralposition with the Baloch separate. One of the mainintimidationsis byBLA for years hadcarried outperiodicassaults on water lines, electicconduction lines and gas pipeline installation and members of Al-Qaeda, who perfect the skill of pipe-line damage in Iraq, will not do without the Iran-Pakgas pipe-line, causestoppage in building and may be evenexecution of the plan together.

However, Pakistan most probably is not willing to discontinueputting down the communicationsfor the Iran-Pakistan pipeline for gas, as Pakistan has been facing chronic energy crises. Iran and Pakistan wouldas wellsign a MOU to construct Pakistan’s biggest oil refinery plant at the Southern-Westharbor city of Gwadar, estimate4 billions dollar. Pakistaniexpect that this mightwithout delayChina which was approved anagreementprevious year to run the harborthroughout a nationalizedcorporation, to unite the gas line plan and associate in construction the refinery plant.

1) Prof.Zhou Rong, “Future China Pakistan Economic strategic Partnership”, Hanbook of Pakistan China relations, 2015.

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Although Iran approvedto give Pakistan with 500 millions dollar forbuildingup of a third of the wholespan of the gas pipeline, which an Iranian corporation will commence.

The US State Department says it has made it absolutely clear to the Pakistan that if the pipeline deal is finalized, it would raise serious concerns under the Iran Sanctions Act.

For Pakistan, the shortest and easiest way to get the LNG supply in the country is Iran, and Pakistan has initiated the project despite US pressure.

Employment opportunities will also be increased for Pakistan in China. Similarly, people to people contact is already strengthened and will get further boost.

Chineserisingfinancialexistence in Pakistan and the employmentpromote is one morecontemplation.

The majortradecollaborator of Pakistan is still the EU, but trading with Chinese had been achieved to 12 billion USDprevious year up to 18 % from the last year.

Chinese had also gotoutfitted rights of Pakistanitactical Gwadar port which throughout an extendedKKHmightattachStrait of Hormuz and the Arabian Sea and to China with a gateway for a 3rd ofthe traded oil from whole of the world.

5.2 Coal Reserves of Pakistan:

The major coal reservoirs of Pakistan are originated in Sindh with almost 184,123 million ton.The current discovery of low sulfur, low-ash lignite coal assets in the Tharparkar, at Thar Desert in Sindh province hadenlarged both foreign and domestic progressattention in useof the coal for a confined coal-firedeposit in Pakistan. Dr Murtaza Mughal, Chairman of Pakistan’s Economy Watch, hadtold there is approximately185 billion tons valued 25 trillion USD. The Shenhua Chinese Group of withdraw from a 1.5 billion USD in 2007, Thar coal planas it consider the power duty ratioinsufficient for power production. (2)

The hindrance in stipulation of communications like transmission and water lines and may jeoparadize the 3.4 billion USD coal scheme at Thar. The mutualproject is among the Engro and Sindh government and is planned to create 1,200-MW in the initialstage by 2015 to 2016 and 4,000-MW in the nextstageupto 2020.

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2) Prof.Zhou Rong, “Future China Pakistan Economic strategic Partnership”, Hanbook of Pakistan China relations, 2015.

In a conference on THar coal to the Syed Yousuf Raza Gilani in Karachi, ex- Pakistan’s Prime Minister, Mr Mansoor told that the be short of fundingcompensation of Rs-10 billion by the federal govt had producedeconomicdifficulty for horizontaloperation of the plan.

Ajaz Ali Khan, the Managing Director at Thar coal Energy Board, , certified the vision of Mr Mansoor and told that fundamental infrastructure plan for Thar coal expansion were required by 2015, at expected cost of Rs-148 billions.(3)

“I expect that new-fangled Prime Minister of Pakistan will arrange an intercontinentalsymposium for the contributors such like the World Bank, the global Corporation of Financeand sponsors from China, as well as the Middle-Easternto catch the attention ofFDI in Thar coal project. Pakistan desires to propose a keep informedthe communicationsprogressof project that integrated a water provisionplan of Makhi-Farash, conductionsystem, railway linkage, sewagediscarding, etc.”

The Coal Underground Gasification at tharschemedirected by Dr. Samar Mubarakmand a nuclear member and scientist Development Commission had been payable Rs2.5 million by the Natural Resources and Ministry of Petroleum. The expectedwholeexpenditure of the mission is Rs-126.649 millions, thoughthe similar asupto June 2011, the taskhadprojectedgrant of just Rs-20 million. Under the development, coal will not be excavatingother than plants it will be set up on deposists to manufacture gas.

Chineseare also spending in Thar China-Sindh possessions, a confinedcontributory of International Mining Corporation and invested in Pakistani Thar coal lump for coal withdrawal and electricityproduction of about 900 MW. It hadas wellinked a MoU with the govt of Sindh intended for the plan in September, 2011. The corporationcampaign to spend 4.5 billion USDin 2016. Thar energy field will be affirmed a particular Economic zone, and taking out will be in progress in April, 2012.

The class of Bituminous coal is a comparatively solid and with a reduced sulfurous coal contains a Tar similar matter known as bitumen and will be scorchedmainly on domestic firesubsequent tobowed into coke coal. Bituminous coal is such type of coal whosequalitiesarrayas of those of bituminous coal to lignite and is exploited firstltly as energy for steam-electric energyproduction. It is put to fuel power station and strengthenmechanism in Pakistan.

Lignite has a low ranking, sulfurous coal with the purpose of normally has been used in customizedmanufacturingfurnace to producewarmth for boiler, coke stove heater, kilns of brick, etc. It was testimony that UAE foundation Burj authority

141 was raising the initialstage of a 500 (4x125) MW electricitygeneration plant at Port Qasim close to Karachi, Pakistanin February 2013. The initial plant is programmed to be functioningin 2016. The wholeposition is expected to expenditure 700 million USD approximately.

Pakistan is taking keenattention in the location of Special Economic Zone (SEZs) in Khorgos and Kashgar in Chinese Xinjiang self-governingarea, as the Kashgar zoneuse its SEZs as a mechanismfloorboard for promptgrowth to hold up with the affluent East-China, the govt of Pakistan is also taking great interest to contribute in this course of action.

China and Pakistanmust furthermoreenlarge this perception and set up a trans-boundarybilateral economic zone of China and Pakistansetting updevelopingcenters, New Silk Road and business houses to overpass Pakistan and China.

If this experimentationbe successful, above time both the states will be more striving and struggle to discover a multi-dimensional economic zone ecompasPakistan, China, Central Asian countries and Afghanistan. This type of integrated economicnetwork will be adjustedsound into the schedule of the Shanghai Collaboration Association (SCA) at the same time as well.

5.3 Up-Grading the Karakorum Highway:

China and Pakistan both aspire to improve connectivity flanked by them. This goal will be acvieved by improving the Karakoram Highway, constructing a 1000km railing road to Khunjerab pass from Havelian, establishing a link of fiber opticcrossways the boundary, and discovery of gas and oil pipe-lines which mightoriginate from the Gulf-region and ending up in west-region of China.

The aims areintimidating;however the close upattachment between China and Pakistan, the pliability of both the states, and the resourcefulness of our specialistsprovide uswell-builtexpectation that we mustaccomplish them.

Chinesemarket is rapidlyintegrated, with the West-Asia and Europe’seconomy. Chinese businessdirectionpassing through Urumqi, Khunjerab, the port of Gwadar and intended for Dubai next to London be capable toaccumulateextra 8,000 kilometers and more than a few days of shipment duration.

It has been told that the volumes of the China’s business with the Middle- East countries have to bypassthroughout the Indian Ocean and the Malacca straits which are a choking point. The space from Dubai to China is 15,000 kilometer; from UAE to Khunjerab pass 5500km. The benefit is obvious.

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3) “Pakistan China energy forum hald in Islamabad”, Press release, Embassy of the Peoplle’s Republic of china in Islamabad, 03 May 2006.

China is revitalizing the earliest Silk Road. Numerous criss- passage, current Silk Road will bypassthroughout Pakistan. (4)

PakistanIdistinctivegeography unites China with Southern and south-western and Asiansimilarly the Arabian oceanand the Middle-East. It as wellcomprises asignificantchannel to Central-Asia.

Pakistan’s Northprovinces and Xinjiang wouldmakeaninputflat timber in the upcomingconstructionfor latest Silk Routes is to connectKPK and Boundary of Gilgit Baltistan.

Previouslymerchants from all components of Pakistan have been approaching to Kashgar intended fordifferentdealings. Each year Pakistan’smerchants and businessofficial, within the form of a designation, visitedmiddle and South-Asian goods Fair.

In naturetraderscame from Gilgit-Baltistan and KPKupto Kashgar, although they as well came from Karachi, Lahore, Sialkot and even Wazirabad.

This is as a result because here is ecological contiguity amongPakistaninorthareas and Xinjiang. Moreoverprominently, their economyset offeach one. Currently the Pak-China corridor involves the up gradation of Karakoram Highway (phase II) Raikot to Islamabad (487 km) with a cost of Rs-379 billion to be completed by December 2017.

5.4 Kashgar a Special Economic Zone:

China became interestedas soon asanalysed in the circumstances of its domestic expansion. This will provide Kashgar the position of a particularfinancialregion. This wouldgivesupport in the founding of commerce and industry in the metropolis. By linking it to Pakistan, China is as wellmaking sure asimple and shortest access to an intactmarketplace. This wouldabsolutelyenhance the positionof tradingamongall the parties from both the states.

5.5 Sino-PakMutual Interests:

Ethnic harmony and societal constancy are necessarytorealize these imaginings. China and Pakistan hadguaranteed to be in opposition to and beat the three evils of extremism, separatism and and terrorism.

4) Prof.Zhou Rong, “Future China Pakistan Economic strategic Partnership”, Hanbook of Pakistan China relations, 2015.

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Our mutual effort in this regard had been dynamic and victorious. But we cannot subordinate our protector. We could notpermit these factors to weaken the visualization of the both the states to shiftrapidly towards a constant, interconnected, mutually dependent and affluent neighborers.

We had political support and willpower of the stacks to put togetherandnothingwill rest in our course. (5)

Although the north-western Chinese area is under developing, as mainly the financialgrowthhappenall along the coastal strap. China’smanagement is regularlydedicated to the progress of the interiorprovincealso. Chinese are also trying to manage the Islamist aspects in this constituency by providing access to the Pakistan. Chinese areworking together with its ally Pakistan on the way to the fullest in array to continueharmony and steadiness within its boundaries. Similarly Pakistan couldachieve both politically and economically from Chinese by assistingChina with a diplomatic Xinjiang. These are the circumstanceswherever both states had a lot to achieve by assistingeach other. Chinese Xinjiang is one of the the largest resourcesprosperous regions and Pakistan mustachieve a lot from this cooperation.

5.6 Terrorism and Sino- Pak Co-operation:

Fazal UrRehmana Pakistani expert, drawnthe past of anti-terrorism collaborationflanked bySino-Pak in an arraytoset upitthe same asa meadow of probableassistance between both the states. (6)

Subsequent to discuss China’sfulfillment with the Pakistanipains to assisttrunk the random Uyghur terrorancestry in FATA and philanthropic the currentphilosophyconcerning the range of CT co-operation, he marked“Chinese had taken even as to completelyunderstand Pakistaniobjectsrequirements with regard to its anti-terrorism struggles”. On 15th June 2009 Rehman Malik, the previous Interior Minister of Pakistan, declaredsubsequent to his visit to China that the China’sGovt could affordsafetygadget, valued 280 million USD to Pakistan intended forcapabilityconstruction of LEA. This comprises mobile scanners, vehicle scanners and other equipments. Hu Shisheng, a well recognized China’sintellectual on Southern-Asiaassociations in his editorial who believed in this view quoted by Fazal-ur-Rehman: “We will give to Pakistan its stability. Anestablished Pakistan is necessary for constructing a firm Xinjiang. The disintegratedor dismantled Pakistan can be a catastrophe for us. We identifythat throughout the America’scampaign,Uyghur were trapped in Afghanistan and Pakistan.

5) Daniel Markey, “Pakistan contingencies,” in managing Instability on China’s periphery, Paul B. Stares etal (Council on foreign relations: 2011), 41-42

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6) Fazlur rahman, “traditional & emerging areas of strategic cooperation”, Strategic studies XXIX, No 2 & 3 summer & autumn 2009, 41

There are vast tribal regions, which hadscampered themselves intended fordecadeswith no close collaboration with Pakistan, how could Chineseguaranteesolidityhere?”

China has been turning over their concern to Pakistan as behind as 2003 as regardstwo combativeassociation fomenting autonomy and militancy in the region of Xinjiang i.e. East Turkestan Liberation Organization (ETLO) and Eastern Turkestan Islamic Movement (ETIM).(7)

Though, China’sapprehension was assuaged concerning their resourcesaffluent West regions as Pakistan and Chinapledge to fight threeharmsethnic separatism,terrorism and extremist,jointly. According to a China’s online paper, China Daily, former Pesident Musharaf, in November 2003 during a visit to Beijing, told “Pakistan restpurposefullyin opposition toterror and will never permit anti-Chineseservicestogether withracial Uyghur looking forself-determination for the Northern-West Xinjiang provinceto utilize Pakistan as a foundation.”(8)

Ghulam Ali quoted April 2010 trip by Maulana Fazlur Rehman, chief of Pakistan’s Jamiat-e-Ulema-e-Islam, to China at the invitation of China’scommunalist Party (CCP) furthermoreprevious visit of alikepersonality by Qazi Hussain Ahmed (Late), the formerchief Jamat-e-Islami in February 2009, because China’spains to search for political assistanceadjacent to China’s Muslim separatist.(9)

The party level MoUs were signed byCCP with the both these political parties.The writerdeclared that China’s help had been impending for Pakistan at frequentinstances in UN,reveals in receivingspectatorposition for Pakistan in SCO as well as material support worth of 470 million USD in Counter Terrirismactionswithin June 2009 upto May 2010. Consequently it is a jointlyvaluableteamworkentrenched in inter-dependence. Three combinedSino-Pak anti terrorarmed forces exercises had been carried out since July 2010,(10)even as India and China have as wellcarried out two such military exercises so far. On 5th July 2013, China and Pakistan inked eight credentials of collaboration in a variety ofregions of economy for intensification the tie between both the states.

China-Pakistancoalition has always been a topic of attention in globaldealings. Whileviolenceemanated from Pakistan unspecified world’shub in the post 9/11 United Statesleadinternationalsafetyarray, Sino-Pakcooperationcome

7) PC Joshi, main intelligence outfits of Pakistan (New Dehli: Anmol publications Pvt Ltd, 2008), 209-212. 8) “Sino-Pak pledge to fight the Three Evils”, China Daily 4 November 2003. 9) GHulam Ali, “China’s deepening engagement with Pakistan on counter terrorism” Central Asia- Caucasus institute analyst, issue of 26 May 2010. 10) “ China-Pakistan begin anti-terrorism exercises”, Daily News & analysis, Beijing, July 1, 2010.

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in as a natural consequence due to the China’smanipulate over Pakistan as well as the former own intimidationproblems.United Statespaper, LA Times discloses on 25th May 2009,Richard Holbrookes Parleys (late)in China in relation to the requirement andconnotation of China’s Counter Terrorism support towards Pakistan.(11)

Though, the piece of writingas wellaccepted the apprehension that mightimposein the lead such events, for instance, Stephen Cohengive an opinion on the matter; “China could be anoptimisticauthority,” he supposed but supplementary that there mightbe divisioninside the China’s govt and the China’sarmed forcesin spite of close tie with the Pakistan’sarmed forcesmight be disinclined to intercede. Lisa Curtis a previous congressional political analyst at the Heritage Foundationconsider it a complexintention to influence Chinese to presume any forcesfunction in Pakistaniterror campaign threat, not withstand Chinese concerns about the spillover effects of Pakistani insurgency.

Amina Yousuf Khokar’s comprehensiveexplanation of the December 2010 trip of Wen Jiabao, the Premier of China to Pakistan and India is very strange from the anti-terrorcollaboration point of view as solitarycan not discover any talk about it as a regionmeasuredvaluedcooperation by both Govts. (12)Though, terror and Pakistan figuresignificantly in the China’sPrime Minister’sdialogue to the assembly. This inconsistency vindicated Lisa Curtis analysis over. Furthermore, in array to make space for Sino-Pak Counter Terrorthoughts are recognized with solid objectives in mentalityintermittentsupport/collaborationresembling‘protection gadgets’ for joint military and LEAstraining will not start a premeditated equation. The interioranti terrorapproaches will have to be skillfullycomprehensive with the outer ones to organizepossessions (resources) for attainingrecognized objectives (ends) throughoutpracticalthoughts (customs). It is in such a formation and its study that the writing in Sino-Pakanti-terror relationshipgoes through a negated.

Liu Jian China’sdiplomat to Pakistan at the symposium “China- Pakistanrelations 2011: The Friendship Year” affirmed inter alia andhosted by the institute of Strategic Studies at capital of Pakistan, Islamabad.

Mutually Sino-Pakdecided that separatism, extremism and terrorismgroundsanenormousdanger to confinedsafety, harmony and stability wouldcarry on to combat the‘three sin forces’insidemutual and multipartystructure. I would be fond ofhighlighting that Pakistan hadcompletedmarvelouspart to and vastgive up in the CTconstrain. The intercontinentalpopulationmustentirelybe aware of this and vigorouslyhold up PakistanIhard working in protection ofnationalized as well as localsafety and firmness. (13)

11) Paul Ritchard, “US Appeals to China to help stabilize Pakistan”, Los Angles Times, 25 May 2009. 12) Amna Yousaf Khokhar, “Chinese Premier Wen Jiabao Visit’s to Pakistan & India”, reflections, Institute of strategic studies, 2011.

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13) Liu Juan, excerpt from the speech at institute of strategic studies Islamabad (ISSI) on 11 January, 2011.

Dr Wang Zaibang dialoguedleadingChina’s for the Emerging World Order in the earlierdeclaredcolloquium. Whereas emphasized the requirement to set upaninnovativeglobal order he gave niceties that Hu Jintao the President of Chinahave a thought of “melodious world” revolvedabout four visionends which are given below:

1) Democratization of worldwiderelationships. 2) Admiration and keeping of variedcivilization. 3) Innovative thought of safety with reciprocalbelief, parity, jointprofit and cooperation. 4) Intensification of the role of United Nation, unbiasedgrowth of globalmarkets. (14)

In extension Ye Hailin conveyed anexceptionallyfascinatingspeak on ‘South- Asianand Chineserelations in a newviewpoint, (15)premeditated at distance end to end on the unprejudicedloom that Chinese areliable to acquire in prospectvis-à-vis Southern-Asia. He talked in relation to non-conventionalhazard to Chineseoverseasremuneration: confinedaggressionas well as terrorism. There subsequent tosuggesting Pakistaniassist to NAB a number of leaders of Eastern Turkestani terrorgrouping and mournful the loss of China’s lives to violence in Pakistan, he cherished Pakistanibottomlessapprehension on the slaughterof innocent lives of China and jointassurance by Pakistan and China of prohibittinguncertainties to influenceChina-Pakistantie. He give an opinionsucceeding toa large number of years of fortifiedstrikestarted by Pakistaniarmed and security forceshere are until nownumerousfundamentalsambiguous in some mountaniousareas controlled by borderingethnic group which are alternatingin fulfillment to Pakistan. CTcooperationgiveninnovativeplaying grassland for Chineseto lock up its ties with Southern-Asia, but the brutalpriceas wellpracticed the agreement of their association.

Though closing his talks the presenterintentionallygave details the nuance of Chinese policy towards Pakistan and India,howeverrecommended keeping Sino- Pak relations as the basis stone of Chinese Southern-Asia policy in the words given below:

“The development in Sino-Indiarelationsas well asSino-Pakrelationsrequired notto be a zero game. Chinacan not be a mediator for thequarrelof Kashmir flanked byIndia and Pakistanthoughmight be a positivetraitor of together at the parallelpoint,come across for a composition to enlarge their jointbelief and universalremuneration.

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14) Wang Zaibang, Vice president of Chinese institute of contemporary of international relations (CICIR), excerpt from the speech at ISSI on 11 January 2011. 15) Ye Hailin, Chinese academy of social sciences excerpt from the speech ISSI on 11 January 2011.

For the instant, Chinacan also be meticulousacquaintances of Pakistan enduring its support for the effort made by Pakistan at hearteningsteadiness and tranquility in Southern-Asia and protection of itsauthority and autonomy.”

China’stacticalviewpoint towards Southern-Asia hadusuallycontinuedconstant for the earlier period half century in spite ofchiefstride in Sino-Indiabusiness relations. It is apparent that this association has not changed China’sglobal view towards Pakistan and India. Chinesecontinuous rfforts to uphold strong ties with Myanmar and Pakistanwarnin opposition to India’sdominion.

In spite of its own promptenlargement in armed forces expenses, China reservedcaution that India’s heavy military expenses damaged its peaceful reputation and arousedoubt in its neighbors. Additionally then any other county of Asia, China depicts Southern-Asia in zero-sum conditions, guilt one state inside the area. (16)

China blamed India’sgovernment and political leaders for sensitization ofcommunity’sviewsbeside Chinese by playing the ‘persecution card’ which depict Chinese as attackingcontrol that hadformerlyplaguedas well asengaged India’sregion in 1962 and canreplicate the similaranother time in the upcoming. India’sinsight of dangeremanate from worries of China’sNaval supremacy; her slamsafety and financial ties not barely with Pakistan althoughas well with Nepal and Sri Lanka. On the additionalChinese see a danger to her powershipmentemanate from up-and-coming United States-Indo nexus.Though, according to the opinionof Rozman, the liking to smotheranoptimisticreflection of two-sidedrelationships (amongSino-India) obscured the warning that beobscured in the text.

China-Pakistan Counter Terrorismcooperationcome into spotlight once yet yet again as a consequence of aggressiveassault in Kashi (Kashgar) in Xinjiang Uyghur independentprovince on 30-31 July, 2011 in which numerousvaluable lives were vanished. Global times, China as details in the daily Dawn of 4th August, 2011 directlyliable‘abroadterrorist’ for fomenting hostilityamong the China’sUyghur and Han population. It argued that activistbe inclined to depict animage of domination of Uyghur Muslims by the Govt, which according to the reportsbeentirelyincorrect. It recommended that harmony and unity in the Xinjiang regionhave to be encouraged as a foremostfootstep towards alleviation of this dilemma. Secondly terrors have to be contracted with an indiscriminately and iron hand irrespective of the racialrelationship of the perpetrators. The Government of Kashgarheld responsible ETIM for these assaultsallegely their weapons and explosiveguidance in Pakistan. Though, Chinese Ministry of Foreign affairs was immediate to refute these argues

148 by welcoming Pakistanifunction as anancientassociate in combating religious extremism and terrorism.

16) Gilbert Rozman, Chinese strategic Thought toward Asia (US, Palgrave Macmillan, 2010), 211-214. 17) Reuters, “China Praise Pakistan, down playing risk of rift”, Dawn, 3 August 2011.

Recognizing Pakistani contribution and sacrifice in the strugglein opposition to terror the Ministryspokespersonsupplementary added that Pakistan and China “hadurbanizedfitcollaboration in opposed to terrorismregion and Beijing will carry onintensificationof collaboration with the Pakistan.”(17)Formerly Foreign Ministry Pakistan had given a declarationcontribution full hold up to Chinesesubsequent to the assault. On 10thAugust, 2011 the Dawn detailed the exile of alleged ETIM memberthought to have relations with the current terrorismattack in the area of Kashgar. The reportseditorialremembered that alikeexile have happened in the earlier period as well, fourteen in 1997, seven in 2002 and nine in 2009 respectively.Such statementpointed to a modernreadiness in both the states to improve Counter Terrorismcooperation, which required a politicalmachinery to interpret this wish into additionalconsiderable, result-oriented deed.

In array to actualization such act, it is of principalsignificance that plannedstudy is carried out in both states to recognizemomentousjointmachinery that is mindful of the tactical constraints and opportunitieslinked with China-Pakistan Counter Terrorismcollaboration.

China and United States are not dreadfullypleasantlyassociated with each other as far-off as the idea of Counter Terror is apprehensive. The United States hadapprehensionconcerning China’sweaponsindentation being originated in revolutionaryinfectedareas and China-Iran collaboration. (18)

Nevertheless it acknowledged the requirement to look for China’salliance in her international Counter Terrorcampaign. The reportsarticle in the daily Dawn of 10th September 2011, entitled “Chineseblast west counter-terrorism doubledprinciples,” Chinese state media quoted, Xinhua, condemning Weststatesparticularly United States of revolving‘a blind eye’ towards injuredgrounds by extremist in USSR Chechnya and Chinese Xinjiang. United States rejection in 2009 to send back Uyghur detainee at Guantanamo Bay penitentiary to China hadbeen the grounds of China’sanxiety. Xinhua as wellaccuse Weststates of using Counter Terror as an excuse to interfere in other statesinteriorinteraction. United State is mindful of Chineselack of enthusiasm and apprehension in receivingentirelyincorporated in an international Counter Terrorlabors in harmony with United State’scustoms.

Pakistan at the instant is afflictionfurtheras of the consequences of conflictin opposition to terror than the war itself. There is an imperativerequirement for

149 rebuilding and remedy in the combatravagearea that are being steadily reclaimed to circumvent there decliningbackside into the ambush of deficiency that cultivatesubstitute political ideology, i.e, obscurantism militancy. 18) Shirely A Khan, “US-China Counter terrorism cooperation: issues for US policy”, congrational research sevice, May 2009. 19) Sultan Braket, ed, after the conflict reconstruction & development in aftermath of War (New York, Macmillan, 2005).

In the essay, Richard Jones “The War Economic and post-quarrel Poverty Decline”(19), deliberatingupon these thoughts. In the vision of this hypothesis the micro and macrofinancialperspectiveprominence losers and winners and the impact of fighting on nationwidefinancial systemrequire to be considered in relationship to Pakistanidivergencetravelingregions. Such researches in the globegenerallyare the center of concentrationon Somalia, Iraq, Afghanistan, Rwanda etc. Forgetting statessimilar to Pakistan, which encompasssufferingconflict of a comparativelyfeweroverwhelmingmodeother than are burdened with travesty of forget. For instance, the KPK Govt currentlyreviews a freshpolicy for elimination of militancy in the region. It was labeledPost Disaster Required Evaluation (PDRE), accumulated by a collection of polygonalfiscalinstitution.(20) This is the type of textgreatlydesired to induce a tacticalcollaborator like Chinese into assisting Pakistan’sstruggle to combat terror, whilstutilizingnot directpolicyto satisfying the real socio-political requirements of the pretentiousinhabitants in array to frustrate terrormilitancy. This monograph is predictable to assistviaduct theopening.

A renownedscholar, Shahid Javed Burki of Pakistan’s political financial systemrecommended, “Asignificantmethod of reorienting Pakistanisaving is to bring into line it additionalsignificantly with Chinesebenefit. Searchingwestmust not be the habitualreplythroughoutcrisis.”(21) This thoughtcould not bear cropbut for Pakistan standstherewith China forextendedtenure well thought and coordinatedelsewhereregions of jointlyadvantageouscooperation. The remuneration couldvary from ambassadorial to economic and security to political. Though,vigilance is defensible in these unstable periods as Pakistanichoose to equilibrium its tactical calculus.

The similarauthors write in a differentpiece of writing, “What we are considering is the probability of Pakistan’sto become the center of attention of hugesupremacycompetition. This canencompass consequence that might not be each and every oneexcellent for the state.”(22)

Whereas investigating the importantdecrease, Fareed Zakaria in international terror dangertold:

“The realthreats of Al-Qaeda were that it canbring aboutvariousfractions of the global Muslim population which is about 1.57 billion,move out to be expectedmanipulate of jihad. In realityobliquely the Muslim community’srevolutionist Islamicimplorehaveruined. 150

20) Government of KPK & FATA secreteriatm “Post crises need assessment KPK & FATA” September 2010.

21) Shahid Javed Burki, looking East, Dawn, 28 September 2010. 22) Shihid Javed Burki, A New Twist to old ties, Dawn, 05 October 2010.

In the partly of the Muslim world that getgrasp ofvotes,societal communitieswhich are in any modelinked with Islamic jihad be tending to tariffdisconsolately,up till now in Pakistan having the largelyfirmterror catastrophe of any country in the globerecently. Over the earliera small number of years Imams and Muslimdominancecrossways the entireglobe had been critical suicide intimidation,terrorism and Al Qaedawith rapidity.”(23)

It indicates the casement of chancetwisted by retrenched terror, which mustcapitalize by China and Pakistanthroughoutsignificant and well measuredcooperation.

“Efficiently counter Terrorism;thechallenge of avoidance, attentiveness and reaction” (24), acompilation of intellectualarticle by specialists in the field of intimidation,warrantappraisal as a significantlogicalorganization for these monographs. The basichypothesis of the volume was that “Armed forcesapproach and castigatoryactions.”

In opposition to the modernepidemic of terrorism hadestablishedunsuccessful,relativelyinflame the circumstancesadjoining terrorism even additional. For adaptableness of intercontinental/trans-cultural terror, such a technique has amplifiedbuilding it to survive more with aprolongedinspirationstand. The philanthropists in this manuscriptargue that Counter Terrorcomprise “a more multifaceted and sophisticated set of measuresprior to,within and subsequent to the assaults.” The editorrecognized three types of measure; “Firstavoidance” entailsaddress the origingrounds of terrorism in the societal and political fields in array to refute socio-political freedom to the revolutionary and to humiliate their philosophy by revealing its inconsistency; “counter the hazard” entailsextracenter of attention on intellectfoundation and law enforcementleadoperation in the undersizedtenure as anticipationconceptionmature; “response to attack” has detailedresponseto refuseliability of objectives and to be capable to administer the disasterconsequential from terroristsassaults which in spite ofhard worktoput off and counter are expected to carry onhappening. The United States approach ofmanagement in visualizingradicalsecuredhaven as a consequence of state fortificationas well as abetment entail such statefetching the main purposes in the so namelyworldwide War on terrorism. This was disapproving of as being gone from the realism on grounds. It is entrenched in the pragmatistdiscipline of contemplation, which propound the state to be in aninvariablecondition of opposition in a zero additionentertainmentmedium. 151

23) Fareed Zakariya, We Are Safer Than We Think, but no one wants to admit it, News Week September 11, 2010. 24) Effectively Countering Terrorism, ed, Cornelia beyer & Micheal Bauer (Brighton-Portland, Sussex academic press, 2009).

United States think tank Foreign Relations council, in September 2011, published a statemententitled, “Running unsteadiness on Chinaese Periphery,” so as totalked aboutcontingencyconcerningprobabledeterioration in Northern Korea, Pakistan , Central Asia and Myanmar in separatedepisodes by different writers. In the section “Pakistan’scontingency,” opined by Daniel Markey that any overwhelmingvolatility in Pakistan canintimidate Chinese and United Statessimilarly,up till now Washington and Beijingdetainedunusualperceptionregarding the rationale of such an embryonicdevastation and the traditions of trade with it. The dissimilarity in views of Pakistanregarding U.S and China highlight the risingcynicismin opposition to United States and additionalproximity with Chinesebedeclaredat the side of Chineseallegeddevotion to avoid a collapse in United States Pakistan’srelationships and repugnance to provincialvolatility. In theseconditions,forecast of ‘Beijing- Washingtondiscussion and anywhereprobable, cooperation’ wasdiscovering in array to takeconstancy in Pakistan, which is tobeendangered by ‘frequentfoundations of instability’. Scheduled intimidation and radicalism, poor supremacy,feeblefinance,localtension and socio-economicaldisparity as the hub facilitate and supported on them gone on to expand four ‘plausible’ catastrophescenario. A revolutionaryassault in United States outlined to Pakistan’sbasemilitant; a conflict with India a chiefradicalistassault; that get rid ofpinnacle Pakistan’smanagement; a hugeacceptedrising that Armed forcesarepowerless or reluctant to compressdownward. Whereas both China and U.S will like to contradict ‘Islamic terror’,evade Indo-Pak combat and get betterlocal and financialconstancy, they be at variance on comparativeauthority that China, US and Indianought tomanipulate in Southernas well asCentral Asia. Power of Pakistani civilian opinionatedprivilege and her atomicplan are also spots of exodus in Chinese and U.Sperspective,regarding Pakistan. Nevertheless three allegedregions of probableChina-US collaborationcan host a numeral of Counter Terrorism and supportivestrategy; to decreasedangerof extremismaggression to progressregulation and capability of Pakistanisanctuaryinstitution (particularly its intellectualagency), to lessenprobability of nuclear adventuresome or probable use and to augmentopportunity of widesupportfinancialenlargement.

In case of a catastropheChina-US cooperationmightbelieveindependent or polygonal means of compulsion and encouragement to boundacceleration by Pakistan/India. China and U.Scouldas wellthink aboutharmonization with other countrieshavemanipulate in Islamabad, like Turkey, Saudi Arabia, UK and UAE, for‘preplanningmany-sidedcalamityharmonization’. Inadequate obtainable level of 152

China-UScollaboration on Pakistan mustenlarge to take account of information giving outcombinedsetting up and bring togethersupportive planning. This ought to be completed with a vision to “superiorguided, motivated and epuiped Pakistan’sarmed forces for CI and Counter Terrorism,put into practice a bulkylevelexpansionarrangement and encouraged Pakistan to take up anatomicpolicy of negligibleanticipation”.(25)

25) Daniel Markey, “Pakistan contingencies,” in managing instability on China’s periphery, Paul B. Stares etal(Council on Foreign relations: 2011), 41-42.

The United States view pointslooking forChina-US cooperation to employ Pakistan on the entire rangeddefenseproblemupsetting her orientation for CTappearsrelativelyunbelievablejust aboutunsustainable.

It couldconsequently be presumed from the conversation so far that junctionexisted in China-Pakistan view pointregarding the cardinally of plummetingintimidation in Pakistan but the debatablepositionfabricate in transformation of this meeting into ‘tactical cooperation’. Three wideapproaches of combatingintimidation are; kinetic entailedstress on the utilization of powerto cut offactivist from the community, get rid of its perpetratorand consolidated security circumstances in regions reclaime from terrorists; the non-kinetic method entailed socio-economicaluplift,psychosomatic efforts, politicalactivities and supportingcompromise to triumphaboveactivist with smallest amountalternative to aggression; a hybrid methodentailed a principallyfollowingplan with appropriatearmedsupport, a combination of non-kinetic and kineticmethods, with anoutlook to decreasehostilityfirst and foremostthroughoutwithdrawing political gap for the terrorist.

There were three conclusionssum up the on top ofconversation. First, a merely kinetic approach of counter terror in Pakistan by means of China’scooperationcan not be the the majorityfitting way as method of Counter Terrorism efforts which are very dissimilar in personality. Second, a non-obtrusive as well asdelicateuntil noweffectualtechnique of counter terror is throughout the non-kinetic method, which utilizesinterview and expansion as its chief proponent with anticipation in the surroundings. As observed in a variety ofpreviousdisaster need appraisallessons, Pakistaniintimidationpretentiousregions are in terriblerequirement of enlargement, which is the majorityprobableleaving to wean away the unbiasedinhabitants from terrorist fundamentalmisinformation. Third and very important, Chinese hadfrequentlyrepeated her resolution to assist Pakistan, her extremely close companion and associate, in combatin opposition tointimidation in array to attainconstancy in her environsother than the modus operandi of this cooperation hadsomewayeludetacticalfocal point.

5.7 China-Pakistan Anti-Terrorism cooperation&local Constancy:

5.7.1 Views on Sino-Pak Strategic Relationship 153

Sino-Pak relations, particularly in the wake upof currentsource of Pakistan- US relationships, evokea great attention U-S policymaking. A statement of the inheritancebase, United Statespointed and highlighted Chineselack of interest in prop up the feeblefinancial system of Pakistan, obvious in loathinggiven thatfinancialassistance in Pakistanimoment of requirement. The think tanksbelieve that Chinesereply to Pakistan’scurrentoverture had been “lukeworm”,prominence the restrictions to what Pakistan canbe expecting from his “all-weather friend”. This statement underplayed the Sino-Paktacticalconnection as China bid to hold India even as encouraged United States to connect Chineselooking for her collaborationin opposition to anordinaryhazardemanated from Pakistan by mode of “Islamabadhold up for some terrorclusterstrengthen the idioligicallyfoundation, logisticallycapability and monetaryassistance for all Islamic terrorist’sgroup”. Though, the limitations of China’sspeculation in Pakistan likewise other stateswherever Chineseinvestors make an attractiveevaluation.

5.7.2 Table-4: China’sexternal Investments, 2005-2011(26)

S.No Name of Country Investment in US $ Billion 01 Turkey 0.75 02 Pakistan 0.76 03 Philippines 1.02 04 Hungary 2.11 05 Afghanistan 3.27 06 India 3.22 07 Nigeria 5.44 08 Peru 7.18 09 Total All 310.10 Countries

5.7.3 Worldview of China

There was made aninfluential and significantconclusion by China in belatedly 70’s underneath Deng Xiaoping to withdraw from internationalinfluencepolitical affairs and contemplate on construction her economy by restricted deregulation and enhanceddomination. She followed a policy of non-argument and hadadministered to decreasevariance with all neighborors in her recreation to continue a stable locality.

Inside an agepopulace and immature west regional confront China;intended for the later animposingapproach is previouslyin progress to assistbuild up a overpass with the Western China and CARsrequirements to stayArunachal Pradesh and Aksai Chin difference with Indian at low down pitch along with India’s official 154 deportment is as wellcomparable, but its the India’s media that remnantsrelativelyantagonistic toward Chinese.

26) Lisa Curtis & Derek Scissors, “The Limits of Pakisytan-China alliance”, heritage foundation, 19 January 2012.

In the meantime, US-Indiapremeditatedcooperation is lookingcautiously by Chinese,whereasresidualdisbelieving of India’sSecurity Council proposal. China’srequirementsnonviolent and stable Afghanistan along witha very chary of penetration of three tendencythinkedferocious in their estimation, ethnic separatism, terrorism and religious extremism.(27)

5.7.4 Terrorism and Dynamics of China-Pak-US:

China anticipated United States to alleviate the safekeepingcircumstances in Afghanistan earlier thandeparture,while she is not tending to get implicated in the Afghanistansettlementprocedure due to her disinclination to be observed as supporter to any splinter group,other than she is eager for rebuilding, as is obvious from her 4 billion US dollarspeculation. Chinese are lookingsuspiciously to any enduring U-S basis in the Afghanistan. In the opinion of Masood, “string of pearls” similaritycredited to China for holding India “is a narrative” for the reason that he argues it is counter-instinctive to visualizemarketableharborshave been urbanized for plannedambition.

Resting onthe other side, Pakistan appearsenthusiastic to have tacticalmaritimecollaboration with Chinese. Sino-Pak premeditatedassociation have been build on beliefjoint respect non-intrusion and categorical assistance, hold up by well-likedphilosophy and fasten in the consciousness of the bothpopulace, is touching from power to strengthensubsequent a distinctiveroute. Nevertheless, in the similarcircumstanceallowing forSino-Pakas well as US- Pakrelationships as zero sum should be unsuitable,as no one couldfill up the holemissing by an other. (28) ETIM danger to China is anextremelysolemnconfrontsalong with Pakistan is cooperate with each othercompletely at each level to contradict, it have been foiled a lot ofintimidation bids in the offring duringintellectualcollaboration and mutualinstrument. Uyghur Diasporas,which woulddraw their Turkic ancestry to Central Asia, bebroadening in Turkey, USA, Germany etc and hadshaped ETIM as their confrontationaldivision. Chinese see this as a grimsusceptibility and requests to secure her westborder that maygroundsinteriorcommotion.

5.7.5 China’s Primary Security Concern Terrorism:

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Contemporary defense strategy of Chinain printed in March 2011, is accessible publically namedChinese National Defense 2010, (29) evidentlymention her professeddanger from terror as a principalfoundation of distress. 27) Masood Khan Pakistan’s invoy to China, Lecture to National security & War course, NDU on 26 September 2011, as recorded by the researcher. 28) State council of the People’s Republic of China, “China’s National Defense in 2010”, 31 March 2012. 29) Beatrice Leung, China’s religious freedom policy: The Art of Managing religious activy the china quarterly, No 184, December 2005, 910.

“safetyterrorizationcaused by such globaltackle asfinanciallack of confidence, nuclear proliferation, terrorism, insecurity of information, Climate change, Natural disaster , trans-national crimes, and community’sphysical conditionsconcernbe on the receivingsuperior.”(30)

In view of Chinese premeditatedphilosophyall along with customarysource of intimidation such as hegemony, internationalauthoritativepolitical affairs and armed forces interventionism, a group of non-conventionalsources of intimidation have taken place, such like “terrorism”,togetherwith globalsafety and to Chinesenationwidewelfare.

5.7.6 China’s Approach toward Extremism:

ETIMdanger is innermost to Chinesecombatin opposition to terror, which it resolutelyconsider is jeopardizefinancialexpansionharmonyamongstnationality and societalconstancy in the boundaryregions. Though this did not meant that Chinese had set in relation tocrack down on all types of spiritualappearance and autonomy, relatively, it hadcomprehend in the wake up of 9/11 assault that if religious military are ambitious to distraction and radicalism, the consequences are disastrous. so, Jiang Zemin documented in December 2001, state council’s and Politburocombinednationwide Religious Work gathering that beliefcan act as a stabilizepower in culture with constancy being the fundamental percept of Chineseapproach.(31) The social gatheringconceded that its majorliability of cultivation the revolt had now stirred on to “stabilization” as well as “Managing” throughoutinstructions and other standards of statecrafts.

It realized that boxing up and about of eachlook of spiritualliberty in the informationsera and globalization would be contradict industrious,therefore the requirement to revitalize China’straditions and communism as a contradictheaviness to spiritualprinciples being required in the presentsurroundings of selection and individualism.

Whereas spiritualadherents are figuredat merely 100 million in Beijing, power of their actions in harmony to partly policies, by ways of lawfulpolicyonly, is not completely achievable and the need of the hour is a mix of creating magnetism for the customarysocietalideology and armed forcescontroltodeter any objectionablesurfeit.

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30) Shahzad, op. cit, 206-208. 31) Interview Faheem ul Hassan, op.cit.

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5.7.7 ETIM Proliferation:

Al-Qaeda offered a great dealdesiredfiscal support to Central Asia’s Islamic militantas well as Chechan, Uzbek, Tajik fighters and Chinese (east Turkestan). (32)Through the regulation of Taliban, adeclaration was known to the China that ETIM will be permitted forpeacefull life in Afghanistan;however it can not be allowable to promptrevolution in Xinjiang as the China’shorror. (33)

In the consequences of Talibanupheaval, this Central Asia’s Diaspora stirred to Pakistani tribal regions, generally to South and North Waziristan in FATA and several even developed in Turkey. Concerning FATA, Pakistani firmsdetermine to onslaught on all overseasmilitant, particularly the ETIM is adequately reflecting in China’sbureaucratcomeback that positivelydiscarded the claim of ETIM foundation in FATA whereas lauding Pakistani Counter Terror attempts in the wake up of 30-31 July 2011 assaults by terrorists in the region of Xinjiang. As a result it is extremelyimplausible that ETIM hadany plannedexistence in FATA at the instant,even thoughpersonality hidings cannot be feint out. Therefore, it providesachance to trunkprospectregroup of this activistassociation in FATA by way of tactical CounterTerrorcooperationflanked by Pakistan and China,with noprobability of an animosityarise out of the terror of ETIMtraditionalpaw marks in Pakistan.

5.7.8 Development of Underdeveloped Chinese Western Regions:

The same asearnings of given thatenhanced socioeconomicalopportunity in abandonedareas, in array to refuteproductivefoundation for radical narratives in regions like Xinjiang, Chineseareenterprisingenormousgrowth in her West hinterland. It had beenprovided achance for Pakistan to connect her possessundersized Gilgit-Baltistan region more familiarly with China’senlargement attempts by means of risingbusiness and financial interdependencies from first to last an enhancedcommuniqué and commercecommunications.(34)

Chance also rested with Pakistan in emulate China’sreplica of concentrate onradicalism by charitableenhancedfinancialincentive to underprivilegedregions of South-Punjab, FATA, Interior Sindh, Balochistan and KP, throughoutequallyfavorablebig businesscooperation in zones like gas& oil , trade & energy corridors, mineral development, agriculture, ports and shipping, hydroelectricity etc.

32) Richard Boucher US relations with China & discussions about Pakistan, India & Afghanistan, remarks to the Press Beijing, China, 12 December 2008. 33) Ye Hailin speech at ISSI, op.cit.

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34) Comment &b analysis Thar-Coal mining Chinese group looses interest. Accessed on 30 December 2011.

5.7.9 Global and Regional insight on Sino-Pak Counter- Terrorismcooperation:

Sino-Pak cooperation in combatto terrorism is a globalresponsibility as well. The United States hadpreviously been encouraged China for enlargement its role in internationalCT efforts. International supremacy would receptiondistribution of his globalaccountability of combating the threat of terrorin the badland boundaryregion of Pakistan and Afghanistan by China, which in their estimation has so far shied away from this responsibilityin spite of its rising geo-political control. The local stake-holders, i.e Afghanistan, India,Iran, GCC, Turkey,etc, will also like China to participate a muchconfident role in the International operationin opposition to terror.

Pakistan’s financialproblems are also well recognized vis-à-vis the sheer size of her disputes and this is extensivelyreceived in the area as well, at period with atypicaluncertainties like that of India. The influence that China takes pleasure with Pakistan and the significance of PakistaniCT campaign to stabilize the area are the two mainlyimportantfeatures that can move the neighbouring states,dissertation towardnudge these premeditatedassociatesfasten on the CT plan.

5.7.10 Balancing Sino-PakCTPerception

Chinese Academy, Ya Hailin of social sciencesduring his aforesaidconverse on ‘China AND South-Asianrelations in aninventive perspective’ at ISSI on 11thJanuary 2011, replied aninquirycorrelated to broad approach to deal with terror, i.e, China’sreadiness to spend in the freshlyprotected terrorhorizontalregions of Pakistan such as Swat, becausemean of de-radicalization by givingfinancialchances. Hailin is very franked in his answerby stating that China’s admittance had anenormousleftover for speculationjust about the world other than its priorityisambitious purely on productionvalue; if China’sproductions are persuaded about the profit of herspeculationin a protected and secured business surroundings, they willexperienceconfident to spend but on the oppositespeculation cannot be compulsory into adverseconditions. The conclusion in October 2011 by China’strade group Kingho to take out from its determined 19 billion U.S dollar 20 years project of rising Thar coal scheme is the currentexemplar of Hailin fear. It reveals the confront in engagement China’sassistance by means of looking for their shortestspeculation in Pakistan as well asgeneratingoccupyingchances for Pakistanirapidly increasinginhabitants that is probable to fall prey to radicalism and terror exceptgiven with appropriatefinancialprospects.

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5.7.11 Conclusion &Suggestions:

China and Pakistanhad enjoyed sixty years of plenteousaffiliation that has steadilydeveloped into a tacticalcorrelation. Its distinctiveroute is exciting in Global political affairs. In spite ofmultifaceted geo-political compulsion, both states hadfruitfullycultivated there position, particularly in post 9/11 era of volatility and uncertainty. Extensive hazards of terror and its propagation had been involved in determining the security guidelines of both states, togetherinside and on the exterior. Inference of the interior energetic of Pakistan and China, the localsafetycircumstances and the internationalgroup of actors‘tacticalbenefit, deserve a reassessment of the welfare and securityproportions of Sino-Pak alliance in array to harmonize it with household,local and internationalgrowth. Counter Terrorismcooperationmaterialized as anextraordinarilysignificantsurface of these harmonization attempts, which has largeprobablefairlyparallel to the yetrisingcooperation in the countryside of protectionmanufacture and, to a fewdegree, in communicationsgrowth.

Counter Terrorismcooperationrequires not be there in the kinetic spheremerely. It as well had the traditions and ways of roundaboutloom, by speaking tothe basic reasons of terror that recline in socioeconomicaldeficiency, political and radicalization dis-empowerment. Kinetic appliance for Counter Terrorism all together is also vital to generate therequisitecircumstances for the non-kinetic way to employment. The “obvious,grasp and put together” policy of Counter Terrorism in Pakistan is typicallycaught up in the “grasp” and “put up” stages which entailedcapabilityconstruction of LEAs for ‘ hold ’ the unoccupiedregions and FDI concoctionfor ‘build up’ the seizedregions in array to strengthen political economic movement that can in twist,fetch normally in community dynamics. In mountain bike with ambassadorialinitiative to become stable Afghanistan, China’s non-invasiveassistance to Pakistan in LEAs capabilityconstruction and in provision of socioeconomicalchances, grasp significantlyundertake in plummetingintimidation. Local constancycan be facilitating resultantly as well as Chinesewould be seen satisfying her much- requireedglobalobligation. Development and constancy in Afghanistan and Pakistan could be in row with herstrategy of non-intimidating,jointlyhelpful and supportivegrowth,as wellinspectionmanipulate of additionallocalcontrol in the area. Though, Pakistanican only get advantage from such indulgence if it can be organized its interiorpolicy on surefooted foundation, persuasivesufficient for its premeditatedassociate, Chinese to provideunwaveringcounter terrorism assistance.

Subsequent toresearchof the objective and subjectiveinformationevaluated in this study, following can be recommended:

i) All provincial and federal governmentaldepartmenttogether with defense, economic, commerce, intelligence, communication, industry, livestock, agriculture, water and power, petroleum and natural resources, ports and shipping, 160

culture, tourism, youth affairs, education etc, mustharmonizerelevantpursuitlooking for China’ssupport and tradepartnership through Foreign Ministry wherever aninfrastructure of co-optspecialist, Sino-Pak cooperation council, must be shaped to coordinate the anecdotalcollaborationproposal in array to synergize their profit for significantpremeditatedachievements. Combatingintimidation muchefficiently, through means and waystalked aboutovercan be the initialintentional objective of this council,accordinglyphilosophical of the most criticalnationwideprecedence at hand over.

ii) There are no wide-rangingCTguidelines within Pakistan which affect its capability to influence China, its premeditatedassociate for much efficientassistance in the modes and fieldsrecognized in this research.Therefore,requirementfor reinvigoration NACTA to become the central point of the state in a entireof the Govt approach to combatintimidation.

iii) Foregone end of the strugglein opposition to terror could be towardconcentrated on the root-grounds by taking awayauthentic socioeconomical and political grievance, particularly in the terrorhorizontalregions of FATA, KP, Balochistan, Punjab and to a little degree.

iv) China’shelp, in socio-economicalstrengthen as a form of combating terror is not approachingexcepttradecircumstances improvement. In array to consequence this development, concentratedstrugles are wanted to give securedsurroundings and tradegraciousdomination,tending toward China’swellbeing as a well-measuredpremeditatedoption, provided thatadditionalenticement to FDI in mineral growth, infrastructure and communiquéprojectat Balochistan as well as in setting up of competitivebeneficialindustry in south-Punjab, KP, FATA and Interior Sindh with completeparticipation of local inhabitantscan be pursueded.

v) Combined Counter Terrorismaerobics are a very helpfulmethod of armedmediation and mustcarry on to develop in possibility.

vi) Looking fornoticeable China’smartialassistance in brawlin opposition tointimidation could be counterproductive;capabilityconstruction of LEAs complicated intelligence/ Counter Terror hardware and combinedintellectualperformance in both states is suggested to be required,subsequent toharmonization at nationwide.

vii) With Chinese economical and diplomaticassistance, localco- optmethodrelatively than a contendingmethod, can be pursueded muchdynamically to effortlessness Afghan embarrassing situation, with adjoiningstates having shorteststake in Afghan’sconstancysustaining an Afghan-owned and Afghan- ledsupportingsettlement.

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Chapter-6

Future Aspects of Sino-Pak Trade Relations

6.1 China as the Emerging Market:

If one explores the emergence of Chinese economy in the world arena,we see a unique and the well thought out strategy to enter the global forum not only in political might but also in its economic agenda. China has a strong socialist underpinning, a system which evinces stringent regulations and firm controls. The Chinese economic model followed the far sighted and extremely judicious approach of export promotion. They have proved that export is the engine of growth, taking the world markets by storm. For decades China operated as a closed economy and had opened its doors to the outside world very methodically and gradually. Thanks to Deng Xioping, for exposing the country’s international borders to trade by coining the term “SEZ” Special Economic Zone. SEZ’s; by policy and design, offeredgratis or little tariffs and taxes, overseas investment,encourage, new management expertise,introduce contemporary technologies and furtherflexiblepolicy with the objective of raising an export tiltingfinancial system.

Four SEZ’s were created during Deng Xiaoping’s time and were positionedall along the coastline that had easilyy admittance to sea transportation. A hugepaceahead, as ingredient of the unlockstrategytie together was the declaration in 1984,so as to the experiment of the SEZs could be comprehensive to hugeregionswithin the state and thirteen coastal seaport cities could be unlocked with particularspeculationincentive for overseascombinedundertaking. The fundamental objective of these SEZ’s and unlocks cities had been to encourageoverseasspeculation in a variety of industries with privilegeddealings and incentive to foreign investors, more flexible labor markets and less bureaucratic control. Economic and technologicalregions were established in these coastline cities with a vision to build uptalentedtrade and machineryconcentratedindustry.

These coastal areas were all confered with encouragingcircumstances and particular status that was favorable to the enlargement of an exportstiltingfinancial system. Chinaeseenlargementplanintroduce in these coastal regionsbeconsequently, a normaleffect of the earliertrialsundertake to attainmorefinancialexpansion. This happened under new financialconditions that had necessitate the contribution in the globalseparation of labor, utilization of globalmarkets and possessions, and at the similarinstanceorganization of marketplacefinancial system. The fundamentalpoint of view of the China’smanagementthough, was that the SEZ’s could stay the base of the coastal enlargement within the structure of the restructuring and open guiding principles. 162

Shenzhen SEZ-China’s showcase is a typicaldemonstration to the achievementof well planned economic vision. This underdeveloped fishing village has transformed itself. No interference of Govt in tradeorganization,consent to setup twigs ofinsurance companies and banks, liberty to do business in overseas exchange as well asauthorization to remit takings, exclusion from tariff on supplies and above the entire a very small tax fee have been integral in contributing to the success of these SEZ’s. The country has a dominating centrally planned system and Laissez Faire economic system based on socialist values. But although it is a socialist regime, the SEZ’s abides by its conventions of a free market system, where there is relative freedom in terms of legal obligations, laws of repatriation and foreign investment.

Pakistan couldget from Chinesemomentousachievement in the initiation of special economic zone. Chinesefirstly setup four special economic zones i.e; Shantou, Shenzhen, Zhunai, Xiamen and the 13 unlock coastal cities. These financial zones had undergone firmdevelopment, achieveenormousaccomplishment and have accumulatedskills in their ground-breaking and probing work. They have completelysubjugated the compensation of their immediacy to globalmarket like Taiwan, Macau and Hong Kong. A huge number of Hong Kong entrepreneurs hadtransfered their manufacturingamenities to the SEZ and it is expected that these are in the southern regions of China, description for given that employment to over five million citizens. Our gratisfinancialregion,shapedapproximately two decades beforeclose to Karachi, is possible to undergo from disregard if no instantconcentration is given towardimplementing new guidelines, law and policy. Here, we couldlook for experts from China.

Question arises, whether Pakistan can create something similar, emulating the Chinese model? By default we are at a strategically advantageous location on the map. Our placement allows us to be at the gateway to the Central Asian Republics. Given the geographical advantage, can we create SEZ’s here?

Why can’t we, in the Pakistani economic landscape follow a similar example of offering tax holidays, rebates, custom duties relaxation in the free zones, set up production facilities in those areas at relatively cheaper costs, boosts our export volumes and earn a significant amount of foreign exchange based on our enhanced export volumes, attract foreign investments and partner with well endowed overseas investors? Will someone be ready to invest in the country in the present situation? There are long-term risks associated with investing in the Pakistan. Before anything else we need electricity and gas to run the plants. The SEZ scheme is sure to fail the government does not legislate to ensure uninterrupted supply of gas and electricity and above all stabilize the law and order and security situation to the proposed economic zones.(1)

1) Siraj ud din Aziz, “Pakistan-China a withering friendship”, Handbook of Pakistan-China relations, 2015.

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We cannot attract investment without offering investor’s modern infrastructure and assuring them of policy continuity.

If we really address these issues, the SEZ’s could be put up by the federal Govt or any provincial Govt or by a private developer. The provincial and federal governments could also set up special economic zones in cooperation with private developers.

It may be a “polygonalfinancial zone” in which all zonesenterpriseisnecessary to be helpfullypossess by national, inhabitants, or companyentity of one or more fastidiousstates.

These SEZ’s need to shift from being mere processor’s of raw material. In fact they need to enhance the value addition to the goods. When selling to overseas markets in the textile industry. It’s just not the spinning yarn, thread or wool we need to export but it must be processed in to fine, export quality finished goods, so that the final value it fetches bring in greater foreign exchange into the country. We need to formulate concrete SEZ’s laws and modus operandi to give it a final shape, allow solid incentives for developers of SEZ’s and also the entrepreneurs setting up their industry here. It is time we seriously evaluate our opportunities and strengths and substantially execute plans for the prosperity of the country.

6.2 Yuan Going From Strength to Strength:

Nobody hadanticipated a cloggeddetermined on Taoist and Confucius values, bygrowinginhabitant’s census, especiallyunadventurous socio-economic policy, to createamanifestation on the international let onlydevelop into anintimidating and analarmingattendance to pretense a danger to the world’s superpower. However China is not justcreatinginfluence on the map with its function as a globeindustrial unit but its money is also garnerconsideration. The Renminbi or Yuan is accuratelyattaining currency! Previously, when Hu Jintao Chinese President visited America, he divulged on the teaching to be strained from the worldwidemonetarycrisis in 2008. He smileonseveral of proposals Chinese had taken in align its macro-economic and financialpolicy, a reasonablefinancial policy and technicallygreaterdevelopment in the state. While the substitute for Euro are being required, assumption such as Yuan being dowel or stretchedprincipalcontrol and illiquidity of principalmarketplacescold notgripgreatposition. Yuan is receivingall the rageoutstanding to a lot ofgrounds. Shareholders and middledepository are gazing up to China’sfinancial system and they desire a part of this risinghuge, redistributionfinancialenlargementstatistics of 10 % and further for three instantly decades. In view of IMF, its financialproductiononly could be 9% of the globewealth. The dowelling of the money, in new words, had been a good thing in masquerade; it stay behindinsulate from haphazardmoney fluctuations owing to the crisis that had contaminated the mainlyeconomy. (2)

2) Siraj ud din Aziz, “Pakistan-China a withering friendship”, Handbook of Pakistan-China relations, 2015.

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The China however is in nowsprint to adhere the globemoneyguild. Approximately two years before, Chinapermittedmanynationwide corporations to export their goods for Yuan. The CDB all togetherinitiated the machinery of replacingthe Yuan for nationwidecurrency of other states. The level of exchange expansion had been not anythingundersized of overwhelming in 2010; it amplified by twenty times as in 2009, to achieve some 200 billion USD. Though it had not been greatlycompare to the exportsprofits of 1.5 trillion USD, but it had been an imperativeshift towards creating the Yuan liberallyexchangeablemoney.

The exchangeablefeature is being assisted by Chineselabors ofachievinginternationalwallop by encourageoverseas trade settlementin Yuan and by inkingmutualexchange with other states. The unitedswapassets of North East Asia and South-Eastern Asiacomprise of Malaysia, Singapore, Taiwan, Thailand, Korea, Japan and Hong Kong are anoverwhelming 7.8 trillion USD. If these statesmake a decision to shift just five percent to Yuan, after that we are giving the impression of a considerable pie of 390 billion USD.

6.3 Lack of Trade Ties with China:

Having recognized the course that Chinese are settingits driftobviouslyindicated that in the elongated term, it will act Pakistan a globe of goods to provide a boost up to its tactfulrelationships of over sixty years with PRC. It is anaffluenceof opportunity for both thestates to correspond in stipulations of savings and discoveringtradeopportunityjointly. Sino-Pak trade be at a ridiculouslyworthlessfigure of 1.8 billion US $ in 2002. Present 12 billion $yearlybusiness between China and Pakistan is estimated to enlarge to 20 billion $ according to Ahsan Iqbal Federal Minister for Development and planning. Pakistani exports to Beijingrise by 37 percentas imports from Beijingraised by 25percent. The aim of 15 billion US $ marked by the ending of 2012 is in view and it is consequentlyvery important that monetary and financial planners start to receive stock of the risingauthenticity of Yuan the same as a currency of worldwidebusiness and resolution.

Definitely, 6th traders in our schools talking in smooth Chinese could go a lengthy way but it is elevated time we do much than paying lip overhaul in locationChina’ssavingsregionswhereverextraordinary tax concession could be accessible. With incarceratedcontrol, tax concession, small cost work and contactto vast marketplaces, the China’sdepositor coulddiscover Pakistan the the largest partlucrativesituation to empower.

Chinesefinancial system is balanced to exceed that of the United States by 2025-30. Pakistan has tosupport its financialrelationshipsaspreviously much view had been misplaced. Chineseare not one of Pakistani export marketplace. It perform not even number in the apex ten exportstargets of Pakistan. By admiration

165 to the import, Chinesehaveturned into one of the top five trades inbasis of Pakistan. Chinesesupply the mass of low-pricedprofitablepossessions all over the globe and for Pakistan also, in spite of a generalinclination for western stylecommodities in Pakistanimarketplaces. (3)

Arguably, human society has evolved towards greater civility in the last 100- 200 years, but the quest to own and capture economic assets has not diminished. The only difference is the format adopted and its related distinctive manifestation. The British invaded and ruled Sub-Continent through the corporate entity “The East India Company”. Sir Thomas Roe did not come to the court of Emperor Jehangir, to merely deliver a message of goodwill of the Royal Court, but had a greater economic and political agenda to initiate.

The rest is history! The current war theatres globally are representative of the new methodology adopted to pursue the old principle of deriving the local populace of its economic assets, for enrichment of the aggressor.

Politics and economics are so closely intertwined, and any nation that wishes to progress, has to necessarily develop policies that are complementary to political exigencies and economic well being. Any forward looking nation cannot afford to have mutually exclusive political and economic policy. It is indeed unfortunate that Pakistan’s foreign policy and its economic pursuits have largely remained out of step with each other.

Pakistan’s foreign policy architects must realize that younger political leadership is emerging inside China, who may not have similar ‘sentiment of attachment’ with Pakistan, as did the previous generation of leaders. In view of this ‘the deeper than oceans and higher than the Karakoram’ friendship would remain a mere rhetoric in the coming future where , out of the 500 foreign corporations operating in Pakistan only 60 are of Chinese origin. On the contrary, Indian companies have begun to be paid attention by the opportunity Chineseoffer in currentdays. Its elevatedlevel and littlepricesurroundings, joined to international markets, industriouswork force and the occurrence on China’sshore in hugestatistics of internationalcustomershadtempted a minute but firmtributary of Indian depositors in varioussegmentstogether with IT, banking, pharmaceuticals, wind farm equipment, tyre manufacturing and auto components. China and India are truly living up to the formation of “Chindia”. Already the volume of Sino-Indian trade is over 4 times the volume of Sino-Pak trade. Currently Sino-Indian Trade ($49.5 billion) and Sino Pak trade ($12 billion). India and Chinese hadguaranteed to enlargemutualbusiness to 100 billion $ by 2015.

Pakistan is blessed to be geographically placed at a strategically advantageous crossroads; it can serve as an important conduit for trade between the CAR countries, the Gawadar port which can be utilized for trade with landlocked countries and China itself accessing the Persian Gulf waters.

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3) Siraj ud din Aziz, “Pakistan-China a withering friendship”, Handbook of Pakistan-China relations, 2015.

Hence, it is significant that our initiatives must be propelled faster, to garner greater economic benefits. Pakistan must look to new markets of Indonesia, the Mekong delta countries, the emerging Golden triangle, the countries of Central Asian Republics, South Pacific, and Northeren African countries, in addition to strengthening ties with China, Korea, Hong Kong and Taiwan.

Although the global financial crises and its fallout does not impact Pakistani financial sectors, but its ramifications on the economies of USA and Europe, will in the medium to long term have telling effects on our own economy and in particular our exports. In fact, the demon of attrition of demand for Pakistani goods and services is surfacing now. The rapid depletion in our foreign exchange reserves, due to host of elements has made our leadership a Christopher Columbus of sorts, with a differing distinctive features, that he was exploring without an iron begging bowl!

Fact leads to the consequence that Pakistan did not entirelycomprehend the prospective of its comradeship with China. It would have achieveda great deal than what it really had so far. There is no institute so far in Pakistan which absolutelyfocuses on China. In educational field, there is supplementaryscarcity and even very essentialregions are previouslyunfamiliar. Consequently, the populace of Pakistan recognizesminuteregarding China’s people and society.

The feeble economic bonds cannot be strengthened with mere political level meetings between the two political heads. The need of the hour is that the population of the two countries must integrate at all levels to bring mutual prosperity. The masses need to amalgamate their resources, skill and talents irrespective of profession, doctors, students, lawyers, bankers to elevate the social fabric of the two countries to supplement the existing financial sector through exchange of information consequently revolutionizing both the economies by doing away with the restrictions of autarky and self sufficiency.

Co-operation in banksystem is solitaryregion that Pakistan hadexcessivelyderelict. Presently only two Pakistani banks hadasubsistence, at the delegatebureau level in China. The presentation in encouraging business services justifies no statement. We have to seek a complete branch permit for our bank in China, and all together, we have tomake an impact upon our China’sassociates to ascertain a wider banking existence in Pakistan. This willappreciablyassist in encouraging Sno-Paktraderelationships. Operating our bank branches in China would facilitate multitude of transactions in Pakistan’s favor. It could actually reverse the trade surplus which goes completely in favor of China. Chinese corporation, International trust, banks, andSpeculation Corporation and other non bank economicinstitutionhave to be convinced to set up workplaces and operation in

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Pakistan. Pakistan has toproposestrikingincentive to these organizations. Our delegation in Beijing shallorganize its efforts towardconstructionof deepfinancial ties instead of just focusing on political links.

China and Pakistan had the prospective for collaboration in engineering, chemical, rolling stock, construction and in communications such as ports, roads, housing and bridges. A number ofworks of the economiccorrelation between both the countries are reciprocated trade, joint ventures, mutual investments and loans/ aidsgiven to every one. Captivating intodescription these inconsistent, modernSino- Pak monetary relationsappearrelatively under progress. In spite of the forces- tacticalcorrelation between both the states is in good quality, the financialmeasurement is not as gifted.

It is very accurate, that China has been extremely instrumental in its environment in many mega projects related to the development of Pakistan. Setting up of Heavy Mechanical Complex in Taxila is a prime example. This proved to be an industrial catalyst for the country. Also, the construction of the Karakoram Highway spurred the economic activity in Gilgit-Baltistan area while simultaneously facilitating the bilateral trade volumes between the two countries. China’s support has also been Key in the completion of the nuclear reactor at Chashma with the energy capacity 330MW.

However, it’s lamentable to note that our Chinese counterparts are being victimized brutally by Islamic terror in Xinjiang wherever Uighar separatist are skilled by the Taliban and by Pakistan baseclothes which are very energetic. Xinjiang is significant to China not just geologically since it as a doorway to Central Asia, however also inexpensively since it is wealthy in innatepossessions like gas and oil. At the moment about ten thousand employees from China arebusy in 120 projects in the Pakistan. However China has expressed serious concerns at a public level about the increased levels of killings and kidnappings of its people. The Chinese ambassador in Islamabad in Islamabad has urged Pakistan to take effective measures to safeguard the interests of Chinese people. There has been a deplorable rise in cases of Chinese workers being targeted in Balochistan by the militants. The iconic Gawadar port construction has become hostage to the debilitating security concerns and the prevalent threats to Chinese laborers working on site.

The Pakistan’s foreign policy specialists must rapidlyapproach to provisions with the reality that Wen Jiabao; the Premiercan not encompass any particular pro Pakistanithoughts. Definitely it is true that China’s think tanks still rank Pakistan as the friendlystatus, up till now over the last two decades Chinese hadappeared to get on anessential role in internationalfinancial system and political affairs. Even as Pakistan couldcarry on to anticipateplentifulassistance from Chinese, in the currentconditions, our overseasagencybe thankful totolerate in mind that Chinese have its individualjustifiableextended term benefits in the area.

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6.4 Pak-China Expanding Energy Co-operation:

China has emerged as one of the mainassociates in the power sector enlargement in Pakistan and hadpreviouslytaken onnumeroussuperprojects; with the severalare the development/conciliation stages.

In view of the appraisal of the Water WAPDA, Pakistan is facingrigorouselectricscarcity of 4500 MW approximately. (4) Pakistan hadurbanized apowersafety Action project (2005-2030) to meet up the necessities of “Pakistaniidea2030” for consistentpower supply and to guarantee that powershortage does not turn out to be a restraint in its long-standing socio- economic expansion. The chiefobjectives of the accomplishment plan are to increasepower supply throughout all possessionsas well as oil, hydropower, coal, gas, nuclear energy and renewable energy such as solar and wind. It was intended to optimize consumption of the original resources of country to decreasereliance on importfuel. At present there are five main hydro-power production projects at Pakistan named as, Mangla with 1000 MW, Tarbela with installed capability of 3,478 MW, Chashma with 187 MW, Ghazi Barotha with 1,450 MW and Warsak with 240 MW.

Furthermore there arenumerousslighter hydel projects which havemutual installed capability is approximately 108 MW. Currently the thermal energy added up to 64 % of the wholeelectricity production and hydal energyproduction is only 34 %, while the state has sufficient water capacity to produce 54,000 MW of power, which can be far supplementary than what it necessitatednow a days.

The entiremain energy utilization is anticipated to lift up 7 times from 55 MTOE in 2005 to 360 MTOE in 2030. The necessity for energy productionwill raisemore 8 timesupto 162,590 MW which was 19,540 MW throughout the same. It had been documented that Pakistan is successively out of affordable and useablepower and competent use of power is enormouslyessential for it.

Although humanizingcompetence, a mainswing was intended towards nuclear energy, coal and renewable energyfor anextendedduration. Pakistan is sanctified with 54,000 Mega Watt hydro-powersprospective but in the previous sixdecades the state has just subjugated 6500 Mega Watt of its fullprospective. Presently Pakistan is droping 13,000,000 cusecs water annualy which openlyflow to the sea from the river. (5)

The whole invested necessities in the power sector throughout the subsequently 25 years had been expected at 150 billion USD (50 billionUSD in the public division & 100 billion USD in the private division).

4) Mehmood ul Hassan Khan, ‘Pak-China cooperation’, The News, March 9, 2009. 170

5) www.wapda.gov.pk/

Theseworkings out to yearlynormal of 6 billion US $ (4 billion US $ in the private division and 2 billion US $ in the public division) and call for a doubling-up of the currentsavinglevel.

In view of thecredentialsgeared up in April, 2008 by the WAPDA, the administration hadintended to create the building of eleven dams at varioussites with 11,170 Mega Wattcapability of producing electricity within the next few years and detailed engineering designs were to be completed shortly.

These dams consisted of Kohala Dam project on Jhelum river at Kohala with 110 MW installed capability to produce electricity,Keyal Khwar Dam on Keyal Khwar river at Patan with 122 MW installed capability, Spat Gah project on Spat Gah river at Patan with power productioncapability of 610 MW, Dasu Dam project on Indus river at Dasu with 4000 MW installed capability of power production, Bunji project on Indus river at Gilgit with 5400 MW power productioncapability, Palas Valley on Chor Nullah at Patan with 621 MW install power production capability, Basho Dam project on Basho river near Skardu with 28 MW power productioncapability, Phandar project on Ghizar river at Gilgit with installed power production capability of 80 MW, Golen Gol project on Golen Gol-Mastuj river at Golen Chitral Mastuj with total 106 MW installed power productioncapability, Lawi project with 70 MW power production capability at Darosh-Chitral on Shishi riverand Harpo project withn 33 MW power productioncapability on Harpo-Lungma river at Skardu.

According to official sources detailed engineering work of Thakot plan on Indus river at Thakot with 2800 MW installed capability and Patan project at Patan on Indus river with 2800 MW installed power productioncapability were expected to be completed by 2010.(6) However, the work on these projects could not be completed in the stipulated period and most of the projects are behind schedule.

The Neelum Jehlum hydel construction project would be completed in November 2016, with a capacity of generating 969 MW approximately, which is equal to Mangla Dam. The feasibility and technical studies of three power- generating sites of Khawar power project were reportedly completed in 2010. The feasibility report and detailed technical engineering designs for Diamir-Bhasha Dam have been completed and the construction is expected to be completed in 2016 generating 4500 MW of electricity. Some of the significantplans which havebuilt with the fractional Chinese supportare given below.

6.4.1 Diamir Basha Dam

A completemanufacturingplan as well as credentials of tender of the versatile Diamer Basha Dam had been finished and all learning and information hadbeen evaluated by an intercontinentalboard of specialists.

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6) www.wapda.gov.pk/

Concerning the manufacture of Diamer Bhasha Dam, China hadapparentlygranted to entirelyinvestment the 8.5 billion US $plan. Lemhyer, a German Company had issued finishingoutline of the dam into which the corporation hds expected the expenditure of dam at 8.5 billion US $in opposition to the previous project expenditure of 6.5 billion US $ in the year, 2005. The govt requiredsetting up the buildingefforts on Bhasha Dam in the year, 2009 other than the plan had been deferred due to economichurdles. CWE Chinese Corporation is the majorcorporationhanded over to finish the plan.

Pakistan twisted to Beijingconcerning the finance of the plansubsequent to the World Bank refusal to adjoin the plan in the 1.4 billion US $support for the fiscal year 2008-2009. The World Bank loan rates were toohigh, where as Chinese willgive loan on lesser rates. So Pakistan hadput forward the outline of completemanufacturingproposal of the dam and in reply; Chinese hadapproved to givefinance for the supposedscheme. The China’s govt hadopened to giveexpert labor for the building of the Bhasha dam since it had a group of 17,000 expertlaborers which hademployed on the Thri-Gorges Dam at China. The govt owed Rupees 200 million in PSDP 2008-09 for Diamir Bhasha Dam. Though, the govt did not release any money for the Diamer Bhasha Dam in 2012.(7)When Pakistan approached for financing, the Asian Development Bank (ADB) had reportedly linked Aid Memoir for US $11.8 billion Diamir Bhasha Dam with the consensus resolution by the National Assembly in favour of the Dam to have across the board ownership in the country. A fact-finding mission of the ADB conveyed this to Pakistan’s Economic Affairs Division (EAD).(8)

The ADB in the subsequent meetings with the government did not give any assurance to Pakistan for financing the Diamer-Bhasha project and conveyed to Pakistan that it would extend a credit line for the project only if the World Bank would joint it, which had conditioned its funding with a No Objection Certificate (NoC) from India. Pakistan is facing serious problems in financing for US $ 12 billion Diamer-Bhasha Dam project, as the World Bank refused to extend a loan for the project, calling it risk financing.(9)

China seems to be the only option other than generating internal resources. Currently the Three Gorges Corporation of China extended an offer for 100 percent funding for Diamer-Bhasha Dam worth $11.8 billion that will have the capacity to store 8 million acre of water and generate 4,500 MW of electricity.

7) Ejaz Kaka Khel, “Public sector development program 2012-2013”, The Daily Times, August 26, 2012. 8) It was reported in The News on June 6, 2009. 9) Imran Ali Kundi, ‘Asian Bank un impressed by Diamir Bhasha Dam’, The Nation, October 21, 2012.

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6.4.2 Neelum Jehlum Hydel Power Project (NJHP):

Thisis situated in the locality of the capital of AJK at Muzafarabad.A Neelum- Jehlum Hydro-powerplan hasestablishedthe capability of 969MWs. The plan will generate 5.15 billion watts of electrical energy. The expenditure of the plan is expected at Rupees 130 billion (2.16 billion USD). It is estimated to be finished in 8 years approximately 93 months upto 2016. The buildingagreement was granted, on 7thJuly 2007, to M/S CMEC- CGGCgroupof China. The buildingcontract was inked on 19thDecember 2007 and the memo of inauguration was issued on 30thJanuary 2008.(10) The labor on this scheme is progressing satisfactorily and on time. The early completion of the NJHP assumes immense importance in order to neutralize Indian designs of utilizing Jhelum water for the under construction Kishanganga Hydopower project being build upstream in Indian Occupied Kashmir.(11) NJHP: on June 14, 2014 Chinese experts connected the 10 Km long under ground tunnel coming from Jhelum river side with the tunnel connecting power house with almost 100 percent perfection.

6.4.3 Kohala Hydro-Power Project:

Sino-hydro Company, a Chinese corporation, hadas wellexposedattention in speculation in Pakistan throughconstruction of Kohala Hydropower 1,100 MW project. The corporation was previouslyconcerned in the building of the Dam, Gomal Zam likewise the Dubair Khawar and Khan Khawar hydro-power plans in Pakistan. A final feasibility study was completed in December 2008 by joint venture of national and international consultants. Private power and infrastructure Board (PPIB) issued letter of intent (LOI) to the China international water and Electric Corporation (CWE) on January 15, 2009 for updation of feasibility completed by WAPDA consultants. Detailed engineering design and tender documents were completed in November 2009 by the same consultants. In February 2011, the legal formalities were completed and the project handed over to CWE.

A joint meeting of PPIB, WAPDA and auditors appointed by PPIB was held on 13 September 2012 in PPIB office, Islamabad to discuss and resolve the outstanding queries regarding expenditure incurred on preparation of feasibility study and detailed engineering design of Kohala Hydropower project.

WAPDA has set up its final demand to PPIB for release of total amount incurred on preparation of feasibility study and detailed engineering design of Kohala Hydropower Project. A meeting was held on 1st Jan, 2013 with reference to PPIB in the office of Chief Engineer Dasu to settle the disputed claims/costs.

10) www.wapda.gov.pk/ 11) Munawar Hassan, ‘The work on Neelum Jhelum Hydro power Project halted’, The News, August 11, 2012.

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The supplementaryprojects which are built with the China’s support are: Allai Khwar Hydro-power projects with the electricity production capability of 121 MW at anexpenditure of 121 million US $, by Electric power Construction Group and Guangxi Water. Allai Khwar Hydropower project power house is in commercial operation since 25th March, 2013. The power house has supplied 963.329 MKWh to national grid upto 30.06.2014; 130MW Dubair power station and 17.4 MW Gomal Zam Dam at an expectedexpenditure of 71.3 million US $ and US $190 million respectively by Sinohydro, Gomal Zam Dam is a multipurpose project of WAPDA in Dera Ismail Khan. Presently work is in progress. The total expenditure incurred on the project since commencement up to July, 2013 is about Rs 16,038.283 million; Jinnah Hydro power station with the capacity of 96 MW at an estimated cost of 128 million US $ by Dongfang, CMECC, MWH, electric power construction and Guangxi water Group. This project is 99.97% complete by now; 37MW Khan Khwar power station with an estimated cost US$86 million by Sinohydro. Power house is in commercial operation since 8th Nov, 2010 and it has supplied 852.491 MKWh to national grid up to 30.06.2014; Mangla Dam expansion, estimate 240 million US $ by CWE. The Chineseworldwide Electricity and water company hadvowed to spend 1.7 billion US $ in hydrp- power production in Pakistan. (12)

Moreover this, Pakistan and China had an energetic programme for national nuclear collaboration under acontractinked between both the states in 1986. Chinese hadassisted Pakistan to construct Chashma-I and Chashma-II nuclear electricityproductionamenities with a capability of 325Mega Watts. The capability of these plants can be improved and China and Pakistan have duly knowledged the international Atomic Energy Agency (IAEA) for the expansion.(13) China has also agreed to add two more units (Chashma 3 & 4) of the same capacity and the civil work on these two power plants. It is expected that these power units will become operational by 2016. Pakistan hadproposals to keep addition to its nuclear electricityproductioncapability and intended to increase the generatingcapability to 8,000MW in ten years.(14) In addition to this the government has begun work on two 1,100 MW plants (Kanupp-II and Kanupp-III) in Karachi whose ground breaking ceremony was performed in November 2013.

In the previous visits to China by the President Zardari, Chinese support for energy production continues a chronicsubjectthroughout the negotiations with the China’sgovernment. (15)China has reaffirmed its support on the energy sector to Prime Minister Raja Pervez Ashraf during his first visit to China in September 2012. Chinese power desires are estimated to produce multiple in the prospect and protected deliver of power is one of the main objectives of Chinese present energy and foreign policy in array to maintain its financial development and achieve its nationwide enlargement objectives.

12) www.wapda.gov.pk/ 13) Muhammad Saleh Zaafir, ‘NAG’S not needed for Pak-China N-plan’, The News, October 20, 2008. 174

14) Farhan Bukhari, “China aiding Pakistan’s Nuclear ambitions”, CBS News, October 16, 2008. 15) Pakistan-China ink pacts, The News, October 16, 2008.

The limitedenvironment of gas and oil possessions and its risingutilization by rising big country like India and China has started a contest for powerreserveachievement. As the mainmanufacturer and chiefcustomers are situated in Asia, consequently Asia is gradually becoming a chess-board for powerplayoffs. At the instant a bighunk of China’spowerpossessions (45%) arrived from the Middle-East and in the course of sea. oceanlane of communiquéare progressively moreflatteringsusceptible for Chinese as the Unitef States and India seek to get charge of safety of the SLOC and canblock it at aninstanceof crisis or conflicts. consequently it is very important for Chinese to enlarge its reliance on the land-based courses for powerbring in. Pakistani TEC is solitaryfeasiblealternative for Chinese to get around the extendedocean route.

A constructioncontract on Energy collaboration was inked in China on 20th February 2006 between Natural Resources of Pakistan and the National Development and the Ministry of Petroleum reform Chinese Commission. (16) In pursuance of this contract, the initialpowermeeting was apprehended in Islamabad from 25th to 27th April 2006. The meeting was attending by a hugefigure of Chin’spowercompanies, financial institutes and their counterparts from Pakistan. Subsequent to two days of strongdiscussions, the meetingdetermined that both states will improveobtainablepowercollaboration and expansion, in the below:

1. Speed up gas and oil searchingaction in Pakistan. 2. Startlearning to constructapower corridor for Chinese to contact the gas and oil possessions of middle and west Asia, counting the growth of oil refinement and storage space in the coastal regions of Pakistan. 3. Utilize Pakistani lignite and coal resources for rising domestic power supply and for energyproductionthroughout cleaner coal technology. 4. Encourage enlargement of renewable power resources, capabilitystructure in hydro-carbon study and expansion. 5. Promote private division as well as monetaryinstitutes of both the states to contribute in powercollaboration to understandmutualventure and speculation. (17)

At the powerproduction meeting, a drawing of the projected 3300 Km lengthy karakoram oil pipe-line was as welloffered by the Pakistan.This involved a 30-inch width pipe-line from Gwadar to Chinese Khunjerab, transient through Awaran, Khuzdar, Pir Muhammad, Shikarpur, Kundian , D.I Khan, Tlagang, Mianwali, Fatehjhang, Ghaib, Haripur, Patan, Dasu, Mansehra,Chilas, Gilgit, Bunjil, Sust and the Khunjerab bypass.The projected pipe-line can be capable to grip 12 million tons of oil annual and might expenditure between 4.5 and 5 billion US $.(18)

16) ‘Pakistan-China energy forum held in Islamabad’, May 3, 2006. 17) Ibid.

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18) Fazal ur Rehman, ‘Prospects of Pakistan becoming a Trade & Energy corridor for China’, Strategic studies, bol.XXVII, No 2 Summer 2007.

The meetingpowerfullysuggested institutionalization of power-related collaboration between both the states. Likewise their proposals, practicability study for a variety of plans have since been tapered out.

Pakistan and China have formed a Joint Energy Working Group (JEWG) to institutionalize powerlinkedcollaboration between both the states. So far two meetings of the JEWG have taken place; the first one in Beijing in August 2011, and the second one in Islamabad in May 2012.(19)

6.5 Strategic Conventional Military Co-operation

Both Pakistan and China see each other as strategic allies. For the former, China has evolved into an indispensable ally, especially in balancing the India factor, exacerbated in the wake of the Indo-US strategic alliance and in the phase of an increasingly un reliable US. For China, Pakistan has also served as a member of important strategic objectives, beginning with the access provided for China to the Western world during the period of the Cold War. Now Pakistan provides a bridge to the Muslim World of West Asia, especially the energy-rich Gulf states and Iran. As the present Pakistani ambassador to China, Masood Khan put it: “We are as wellaninstrument for Chinese to achieve out to the Muslim’scommunity.”(20) Additionally, even though the Sino-Indian relationship has been growing, especially economically, Pakistan does offer China a useful counterbalance to Indian hegemony in South Asia–a means to indirectly check India’s growing presence and influence. Also through Pakistan, China can attempt to limit US influence in the region, especially post 9/11. Although both the US and China regard Pakistan as a strategically important state, the manner in which the two have dealt with Pakistan is very different. While the US has proven itself to be an unreliable ally, often targeting Pakistan (especially in terms of terrorism and on the nuclear issue), China has rallied to Pakistan’s support, especially in times of crises. For instance, after the controversial Abbotabad raid by the US, with Pakistan’s credibility in question internationally, it was to China that the Pakistani leadership turned, with Premier Gilani visit to Beijing the same month (May 2011). Chinese Premier Wen Jibao called for Pakitsan’s “sovereignty,regional integrity and autonomy,” to be cherished; and he guaranteed the Pakistani leadership that China would continue to be a friend despite a fluid international environment.(21) In a joint statement on this occasion, China acknowledged Pakistan’s efforts and sacrifices in fighting terrorism while Pakistan stressed that it will in no way permit its field to be utilized for aggressive a further state but would carry on to hold up global co-operation in the field of counter terrorism”.(22)

19) ‘China to setup two wind power projects’, Dawn online, May 8, 2012. 20) China Daily, 13 August, 2011. 21) China Daily, 19 May, 2011. 22) “China applauds Pakistan role in the war on terror”, Dawn (Pakistan) 21 May, 2011. 176

The most significant area of co-operation in the Pak-China relationship has traditionally been military co-operation.For Pakistan, post-1965, the US had proved to be an unreliable ally and China offered a more viable option in terms of the acquisition of military hardware and technology transfers. In 1966, Pakistan required $250million worth of weapons from China, including F-6 fighter planes, T- 59 tanks and anti aircraft guns.(23) These military supplies continued and the list expanded over time to naval vessels, surface-air missiles (Anza-2) and Red Arrow ant- tank missiles. At a time when the US had cut off supplies to Pakistan, Chinese weapons systems helped keep the Pakistan military sustain its strength. From 1978-2008, Pakistan had received $7billion worth of military equipment from China.(24)

Equally important, the military relationship with China had a critical modernization component which allowed Pakistan to keep its three services updated. Chinese investment came into Pakistan’s defense industries and communications infrastructure and joint ventures also evolved. The latter led to the two countries producing fighter planes such as the FC-1. The latest venture has been the JF-17 multi-role combat aircraft which will allow Pakistan to move away from its F-16 dependency–the only area where Pakistan is still dependent on strategic weapon supplies from the US. The two countries have also co-operated in developing the K-8 Karakoram advance training aircraft, as well as the production of the Al-Khalid tank, Babar cruise missiles and AWACS.

As the present US-Pakistan relationship deteriorated, especially in the post- Osama raid period, China expressed its support for Pakistan by bringing forward the delivery date of 50 JF-17 aircraft to bolster Pakistan’s air defense as well as agreeing to deliver 36 CAC J-10 multipurpose fighter aircraft.(25)Pakistan is also planning to purchase six new submarines from China.(26)In the field of space technology also, China helped launch Pakistan’s first communications satellite (PAKSAT-IR) in August 2011.

Naval military co-operation with China has also helped build up Pakistan’s Naval capabilities. China has upgraded the Karachi dockyard and already supplied three of four frigates which comprise the Pakistan Navy in the addition. Like most of China’s weapon transfers to Pakistan, technology transfer has been a substantial component.

23) Ahmed Farooqi, rethinking National Security of Pakistan: The price of strategic Myopia (Hampshire, Asghgate publishing, 2003). 24) Bruce Reidel & Pabneet Singh, “US-China relations: seeking strategic convergence in Pakistan”, Foreign policy at Brookings, policy paper, January 2010. 25) Rajashareef Jetly, op.cit. 26) “Pakistan moving closer to China: US congrational report”, The Nation (Pakistan) 28 October, 2011.

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Nor is it just a matter of joint military production and sale of weapon systems. The Pakistan-China strategic military co-operation also comprises of high level military delegation exchanges and joint military exercises. Pakistan has also been providing China access to its US-acquired weapon systems.

6.6 Nuclear Co-operation

Nuclear co-operation between Pakistan and China has been and continues to remain highly contraversial in Indian and Western circles, especially the US, despite the US itself contravening its obligations under the Non Proliferation Treaty by signing the nuclear deal with the India. The Pakistan-China Comprehensive Nuclear Co-operation Agreement was signed in 1986 for an initial period of thirty years to be followed by an automatic extension for five years each time unless either side gives a notice of termination. It became operational in November 1986 and is intended for peaceful nuclear energy co-operation.(27)Article-II of the Agreement states that the two sides will cooperate in “design, construction and cooperation of nuclear research and power reactors, associated facilities and other fields as may be mutually agreed upon.” The four Chashma power plants are also part of this agreement. Even though the Pak-China nuclear deal was signed before China acceded to the NPT (which it did in 1992), the Chashma power plants provided under the agreement, are focus to IAEA protection. When Beijingtied the NSG in 2004, it informed it of its peaceful nuclear co-operation commitments with Pakistan. It is important to remember that the NSG is a Suppliers’s Cartel and not an international treaty organization. Equally important is to recall the NSG country- specific exception made for India at US insistence in 2011, so as to allow NSG members to import dual use nuclear technology to it despite NPT provisions to the contrary (NPT Articles I and II). Even earlier, NSG guidelines were violated by Russia in 2001 to accommodate transfer of nuclear fuel to India despite 32 member states stating that this was against NSG commitments.(28)

More to the point in terms of international obligations is the fact that all the Chashma plants, as they become operational, are subject to IAEA safeguards–as required, given Pakistan and China’s IAEA membership and China being a signatory to the NPT.

27) Syed S H Bukhari & Ateeq ur Rehman, “Pak-China Nuclear deal & international fictions”, Berkely Gournal of Social sciences, Bol 1, issue 3 March, 2011. 28) Raffaello Pantuci, “China’s Afghan Dilemma”, Survival, Bol 52, No 4, August-September 2010.

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Unlike the Indo-US nuclear deal, Chinese civil nuclear co-operation is transparent and has no military nuclear spin-offs, given the IAEA safeguards umbrella which allows for no exit provision in the safeguards agreement blueprint which contains an exit clause for India.

However, there is the military dimension of strategic co-operation between Pakistan and China but in the nuclear and missile field, if there was such cooperation, it ended after China acceded to the NPT and later became part of the NSG. Since Pakistan in neither a signatory to the NPT nor a member of the NSG or Missile Technology Control Regime (MTCR), it has broken no international obligations in missile co-operation with other countries. Post-1998, Pakistan has put in place export controls, including on missile technology in keeping with MTCR controls and China has also reiterated time and again that it is abiding by MTCR rules.Despite all this, the Clinton Administration imposed sanctions on China in 1993 for allegedly transferring some M-11 missile equipment to Pakistan but these were removed later for political reasons!

Pakistan’s nuclear weapons and missile development has been largely indigenous, including its cruise missile development–although some Chinese scientific inputs may well have been there in the early years.

6.7 Other Areas of Strategic Co-operation

The Pakistan-China strategic co-operation is not just about conventional weapons production, development or civil nuclear co-operation. It extends to other areas as well, including the sensitive issue of terrorism. This is an issue that has gained importance as extremism has risen in Pakistan. For China, the issue centres on the Xinjiang province bordering Pakistan where the major ethnic groups are the Muslim Uighers. There have been violent incidents that have caused international embarrassment for China. But Pakistan has consistently seen to it that this issue does not become a means for undermining its critical relationship with China. During the Musharaf regime, strong action was taken against the separatist groups and important leaders of the militant East Turkesatan Islamic Movement (ETIM), like Hassan Mahsum were eliminated.(29) Also, joint anti-terror exercises were held by the Pakistan and Chinese forces between 2004-2011, the first one being held in Xinjiang; and Chinese forces captured as many as 10 ETIM militants with the help of the Pakistan military in July 2011.(30) In 2007 China and Pakistaninked an expatriationagreement which come up into force in January, 2008.(31)

29) As sited in Jetley, op.cit. 30) “Pak-China sign extradition Treaty”, Daily Times (Pakistan) 12 December, 2007. 31) There were four major terrorist attacks between 2004-2008 against Chinese Nationals in Pakistan.

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In December 2011, Pakistan and China signed three Memorandam of Understanding to bolster military co-operation, communication and intelligence sharing to eliminate terrorism. On May 22, 2014, Chinese President Xi Jinping and President Mamnon Hussain agreed to strengthen co-operation in counter terrorism efforts.Pakistan’s mainstream religious political parties have also interacted with the Chinese to reassure them that nothing would be done to harm Chinese interests.

Qazi Hussain Ahmed Jamaat-i-Islami previous leader, leada delegate to China in the month of February2009 for a week extended visit on the incitement of the China’s Communist Party. As well Pakistaniestablishment hadassumed that at the back the embattledattack on China’snational in Pakistan. Presentlt were Uigher nationalistrudiments.(32) Such attack hadelevatedinquiry about Pakistan in China and are observed as pains to destabilize the Sino-Paktacticalcoalition, which is why previousPremier Shaukat Aziz had confirmed that the murder of China’snational in Pakistan be “aglobal conspiracy”.(33) Unfortunately, with the Taliban and Al Qaeda presence in Afghanistan and Pakistan, this issue of extremism will continue to remain an area of concern for China in its relationship with Pakistan as well as Afghanistan. However, the joint military exercises and technical co-operation between Pakistan and China, specifically in relation to anti-terrorism have established a formal structure to effectively take up and deal with issues relating to terrorism in a cooperative framework. This has been a critical step to prevent long term damage, not only to the military-strategic partnership between the two countries, but also to the Chinese economic investment in Pakistan.

6.8 Present Situation & Future Course

Official and civil society circles in Pakistan have not fully understood the changes that have taken place in China over the last few decades. At a very basic level, the old Chinese leadership that had seen the special relationship evolve with Pakistan is now gone and in its place is a new leadership which is aware of China’s history but has also seen China move into the international mainstream with growing economic ties with the world, especially the US, ASEAN and India. In other words, Pakistan is “not needed” as the opening to the rest of the world. Under Deng Xiaoping in 1978, a new pragmatic approach replaced traditional idealism in China’s approach to the world. As part of this new approach, China adopted a more neutral stance towards South Asia, especially towards the dynamics of the Pakistan-India relationship. Certainly, one can discern a shift in China’s approach to Pakistan but both countries are still coming to grips with the perceptional shifts needed.

32) “Killing of Chinese conspiracy against Pakistan”, Daily Times (Paksitan) 09 August, 2007 33) Prime Minister Rajiv Gandhi visited China in December 1988-The first by an Indian Premier in 34 years!

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For instance, with the advent of Deng and the reformists, there was a toning down of the declaratory hold up to Pakistan on the Kashmir conflict. As well it becomesmarked that Chinese would not forever side with Pakistan in the laterquarrel with India. It was the time when high level visits of Indian leaders to Beijing took place.(34) On Kargil, also the Chinese position left some Pakistanis wondering about the future of the “special” strategic Pakistan-China relationship. However, the Soviet invasion of Afghanistan again brought China and Pakistan close together once again within the parameters of traditional politics. Through Pakistan, China provided covert military supplies to the Afghan Mujahideen to the tune of $200 million.(35)

In 2006, China introduced the concepts of “Harmonious Society” and “Harmonious World” in its discourse on future policy and Congress at the 17th Communist Party, these thoughts were institutionalizing as underlying China’s domestic and foreign policies thrust. Under Deng, China sought to downplay its leadership role that was actually emerging in the international system. However, post-Deng, Jiang Zemin moved towards proactively interacting with the international comity of states in order to develop China as a power in order to build a new international order. This developed further under Hu Jintao when China adopted a proactive foreign policy as its pre-eminence in world politics grew. Central to this approach was to seek lowering of tensions with neighbors and to create a strategic environment in China’s vast neighborhood. The nation of upholding a “region of stillness” in the region of Chinese was dangerous to this new policy”.(36)

Pakistan also saw a strategic shift in its external policy when its military leader dragged it into the US strategic loop post-9/11- a relationship that never stabilized and continues to be erratic, with each side perceiving the order as unreliable. However, Pakistani leaders realized early on the need to sustain their strategic alliance with China despite the new “romance” with the US. However, perceptual gaps continue to prevail both in China and Pakistan about each other. For instance, Pakistan does not comprehend why Chinese had not subjected any declarationreproachful CIA murmurattack for violating Pakistani sovereignty in spite of Pakistanibureaucratprotest to the United States. Once more, the China did not recognize why Pakistan issue no announcementreproving the July 2011 riot in Xinjiang when they had done so in the case of Tibten riots in 2008.

34) Fazal ur Reahman, “Pakistan’s relation with China”, strategic studies, Bol.XIX & XX No 4 & 1, Winter- Sopring 1998. 35) Fazal ur Rehman, “Traditional & Emerging areas of strategic cooperation between Pakistan & China”. 36) “Pakistan-China energy forum held in Islamabad”, Press release, Embassy of the People’s Republic of China in Islamabad, 03 May, 2006.

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Yet, the Pak- China relationship still has inexplicable elements to it which have continued to survive the realism in China’s policies and also the new “alliance” with the US that Pakistan ventured into after 9/11. For instance, in the immediate aftermath of the Osama raid by the US, it was the Chinese who issued strong declaratory support for Pakistan. Nor the China-Pakistan relationship directly dependant on the India factor as many had assumed. The increasing rapprochement between China and India has not diluted the substantive nature of the China-Pakistan strategic partnership - albeit the declaratory posturing may have been toned down. For instance, in the Pakistan-India 2002-2003 military stand-off, China’s “neutrality” helped in the lowering of tensions as it allowed India to be more confident of China’s “neutrality” in the Pakistan-India dynamics. Yet, this “neutrality” has not stood in the way of the continuing strategic-military co-operation between Pakistan and China – as well as the growing economic co-operation between the two sides in the critical areas of energy, mineral exploitation and communication systems. An increasing focus on economic ties has added to the overall strategic depth of the Pakistan-China relationship. A complete FTA was inked in 2008 permitingboth sidesextensivemarketplaceentrance into other marketplaces.

The development of Gwadar port, again with Chinese assistance, will give China a strategic energy corridor and access to the Persian Gulf–with Gwadar being only 180 NM from the Strait of Hormuz which is strategic in nature.

Nor have the multi-layered strategic military ties diminished, despite the changes both countries have undergone. In fact, the joint production of the muti-role combat plane, the continuing joint military exercises in Chinese territory and China’s continuing nuclear energy co-operation, all reflect the stability and all-encompassing depth of the Pakistan-China strategic partnership. Emerging areas of co-operation in this partnership are in multiple issue areas. For instance, there is co-operation in counter terrorism, including joint military exercises and intelligence sharing alongwith the Chinese outreach to the mainstream religious parties and their leadership. There is also a growing common perception on Afghanistan, not only in terms of desiring long term stability but also seeking energy through the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. Operational accord of TAPI gas pipeline project signed on July 3, 2014 agreeing to the major points of sale purchase agreements of 1,735 km of the TAPI gas pipeline project. China is also investing in mineral exploration and development in Afghanistan. The energy sector remains crucial for both Pakistan and China and the latter is increasing its investment in Pakistan’s energy sector beyond nuclear energy and in the generation of hydro electric power.

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In 2006, a framework agreement was signed in Beijing on bilateral energy co-operation, followed by the first energy forum in Islamabad the same year.(37) It was here that a proposal for a 3,300 Kilometers Karakoram oil pipe-line was set up by Pakistani Govt. This need a 30-inch width pipe-line from Gwadar at Balochistan to Khunjerab and it will be talented to grip 12 million tones oil annually the price being estimated from $4.5 to5billion USD.

While the durability of the Pakistan-China relationship is not in question, what is still baffling is whether this relationship follows in the traditional mode of realism and realpolitic or is there something intangible that underlines it and ensures that it adjusts to new global realities while retaining its strategic nature. After all, why do all Pakistani leaders, on coming to power, still visit China immediately or soon after assuming office? Why do the Chinese still give supportive statements about Pakistan when the latter is under siege as happened in the Abbotabad raid case? Why does china continue its support for Pakistan in the civil nuclear field despite pressure from the NSG and targeting by the US and India? These questions continue and the one point they all stress is that the Pakistan-China relationship may be part of traditional global politics; there is now a strong intangible underpinning to it that is not so easily explained.

Perhaps the best way to explain this unique strategic partnership is to point out two crucial facts: One, the Pakistan-China relationship is not burdened by a shared history and colonial exoerience-as is the Pakistan-India relationship with all its conflicts and interplays. Two the Pakistan-China relationship is not burdened by a shared religious–social heritage with all its expectations–as are Pakisatn’s relations with so many Muslim states. That is why these two countries have managed to evolve a unique strategic understanding that has evolved and grown as both countries have adapted to the constantly changing international environment.

6.9 China Pakistan Economic Corridor (CPEC)

6.9.1 History of CPEC

China–Pakistan Economic Corridoralso well known as(CPEC) includes a composite of infrastructure planswhich are presently under processall over the Pakistan. Total cost at 46 billion USD, the expenditure of CPEC venture hascurrently been enlarged atvalue 62 billion USD.

37) Fazal ur Rehman, “Prospects of Pakistan becoming a Trade & Energy corridor for China”, strategic studies, Bol.XXVII, No 2, Summer 2007.

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Pakistani infrastructure has been quickly moderenized and strengthened economy by the CPEC, it includes modernized transport,various energy projects, and Special Economic Zone.(38) It became partially operational when cargo transportation was carried to Africa and west Asia from China through Gwadar in 2016.(39)

All over the Pakistan a hugenetwork of Railway lines and Roads have been established under this project. Bedraggled transport networks have been estimated a loss of about 3.5% of our annual GDP by the Government. Under this project Gwadar and Karachi Sea ports have been moderenized as well as in Western China and Central Asia. Lahore and Karachi have been linked through 1100 kilometre long motorway under CPEC Project,(40)as well as Karakoram Highway has also been reconstructed from Chinese Borderto Rawalpindi. A Railway network has been constructed from Peshawr-Karachi and also been modified to allow the train to travel at a speed of 160 km/h by December 2019.

China’s Southern Xinjiang Railway will also be connected to Pakistan’s Railway Network after upgradation. Appoximately an amount of 11 billion USDis necessary to enlargetransportcomplexand it would be invested by subsidize concessionary loan.

Pakistan’s energy short comings have been met by constructing a speciall infrastructure by private companies; it will cost about $33 billion. It helped accomplish energy sortages in Pakistan, 4500MW has been added through this project and about 2% of the annual GDP is consumed.(41)At the end of 2018 thorugh early harvest projects which is a part of CPEC 10,400MW of electricity will be generated.

Pipeline for the transportation of Oil and liquid natural gas will also be included in the project; it will cost about $ 2.5 billion which included pipeline from Gwadar to Nawabshah through which transportation of gas will be made from Iran.

For the production of electricity world’s largest solar farms have been established, electricity is generated through fossil fuels, wind power and through hydroelectric in these projects.

38) Economic corridor “Chinese official sets record straight.” The Express Tribune 2 March 2015 39) Ramachandran, Sudha (16 November 2016). “CPEC takes a step forward as violence surges in Balochistan.Retrieved 19 November 2016. 40) ”Karachi to Lahore Motorway project Approved” Dawn. The Dawn Media Group.2014 Retrieved 5 September 2014. 41) Kugelman, Micheal (9 July 2015). “Pakistan’s other National struggle. It’s Energu Crisis”. The wall Street Journal. Retrieved 11 December 2015. 184

Like the Marshall plan launched by USA after war in Europe, the CPEC is associateda potential impact on Pakistan.(42) It has been estimated by experts that about 2.3 million jobs will be created in the year 2015-2030 and 2-3% countries economic growth under this project.(43)It has also been estimated that 17% of Pakistan’s GDP in the year 2015 will be equall to the value of these projects to the foreign FDI in Pakistan since 1970.

A corridor was planned between China and Pakistan at Islamabad in 2013 extended from Chinese border to Pakistan’s Gwadar deep sea port, reconstruction of Karakoram Highway was also highly motivated which dates back to the year 1959. Construction of Gwadar deep sea port was started in 1998 and it was highly interested by China in 2002 and was completed in 2006. There was resulted contravene between the Pakistan state and Taliban’s due to the fall of General Pervaiz Musharraf and the construction of Gwadar port was terminated.

A hurdle was created as the Strait of Malaccawhich resulted cut China off from Middle East by the United States and its allies. Due to this hurdle China made links with Sri Lanka and Pakistan and had decided to build a secondary itinerary to Africa and Middle East, “The China-Pakistan Economic Corridor (CPEC)”.

On 22 May 2013, Li Keqiang the China’s Prime Minister was invited by President Asif Ali Zardari at Awan-e-Sadar and the ongoing CPEC project was proposed by the Pakistan’s Peoples Party and the heads of all political parties were accompanied. The economic corridor was agreed between Asif Ali Zardari, the Pakistani President and Li Keqiang, the Prime Minister of China.

China-Pakistan economic corridor was to be developed the long term plan which will further enhance mutuall connectivity between both the countries. The ceremony of signing the documents of CPEC was held at Aiwan-e-Sadar and Chinese Premier Li Keqiang and President Asif Ali Zardari as the representator of both the countries were signed. There was made various and extendedtenurecollaboration between both the states in manifoldregions after inking the valuable documents by the Chinese Premier Li Keqiang.

Pakistani President Mamnoon Hussain made a visit to China and discussed the plans for an economic corridor in Pakistan In February 2014.(44)

42) Muhammad, Salim (6 November 2016). “Marshall plan for Pakistan”. The news on Sunday Retrieved 22, January 2017. 43) Saeed. “Big Chineese Pakistani project Tries to overcome Jihadists Droughts and Doubts.” The wall street Journal.ISSN 0099-9660. RETRIEVED 2016-06-10. 44) Tiezzi, Shannon (20 February 2014). “China, Pakistan Flesh Out New Economic Corridor”. The Times of India.

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After two months, Nawaz Sharif, the Prime Minister of Pakistan meet with Chinese Premier Li Kequiang in Beijing to talk about futureprocedure, and was decided to complete the project during the Nawaz government.The China also announced and financed to about $ 45 billion for infrastructure and energyproject in Pakistan as component of CPEC in November 2014.

6.9.2 Agreement of CPEC

In April 2015, when Xi Jinping made a visit to Pakistan he stated "This is my first visit to Pakistan, although I believe as if I am visitingmy own home of brother." China and Pakistan madeacontract to beginfunctioning on the 46 billion $contract on 20th April 2015.It has been estimated that it is about 20% of ourannual GDP it includes "Early Harvest" projects which costs about $28 billion and will be completed up to the end of 2018. (45)

It has been flecked at that time as a gesture of friendship, the Capital of Pakistan with catchwords and billboards as "Sino-Pak friendship is upper than the mounts, deeper than the sea, as sweeter like honey and much strong than Iron" Chinese frequently reiterate the phrase to coin their strong relationship with Pakistan. (46)

6.9.3 Early Harvest CPEC Projects

CPEC consist of several projects in energy and economic sectors, the detailed list of the realy harvest projects which will be completed up to the end of 2018. Like part of the "Early Harvest" plan of the CPEC, over 10,000 megawatts of electricity-generating capacity is to be developed in 2018 - 2020. Although some "Early Harvest" projects will not be complete by 2020, the Govt of Pakistan plans to add 10,000 MW approximately of energy-generating capacity to Pakistan's electric grid by 2018 through the completion of projects which complement CPEC. Although not officially under the range of CPEC, the 1,223 MW Balloki Power Plant, and the 1,180 MW Bhakki powerplants are also under construction,(47) which along with the under-construction 969 MW Neelum–Jhelum Hydropower Plant and 1,410 MW Tarbela IV Extension Project will result in an additional 10,000 MW are to be added Pakistan's electricity grid in 2018 by a combination of CPEC and non-CPEC projects. A further 1,000 MW of electricity will be imported to Pakistan from Tajikistan and Kyrgyzstan as part of the CASA-1000 project, which is probable to be completed in 2018 lately.

45) “Ministry of Planning, Development & Reforms” (Press release). Pc.gov.pk 46) Tharoor, Ishaan (21 April 2015). “What China’s & Pakistan special friendship means”. The Washington Post. Tetrieved 22 April 2015. (47) "PAKISTAN PM Nawaz inaugurates Balloki power project, which would add 1223MW". The News Teller. 10 November 2015. Retrieved 10 March 2016.

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Table-4: List of Early Harvest CPEC Projects

S.No Energy Projects Capacity Location 1 Pakistan port Qasim power 1,320 MW (2X660 MW Sindh project plants) 2 Thar-I Project 1,320 MW (4X330 MW Sindh plants) 3 Thar-II Peoject 1,320 MW (2X660 MW Sindh plants) 4 Sahiwal Coal Power Project 1,320 MW (2X660 MW Punjab plants) 5 Rahimyar Khan coal power 1,320 MW (2X660 MW Punjab project plants) 6 Quaid-e-Azam Solar Park 1,000 MW Punjab 7 Suki Kinari Hydropower 870 MW (expected Khyber Pakhtunkhwa Project completion in 2020) 8 Karot Hydropower Project 720 MW (expected Punjab completion in 2020) 9 China Power Hub 2X660 MW Balochistan Generation Company 10 Thar Engro Coal Power 660 MW (2X330 MW Sindh Project plants) 11 Gwadar coal power project 300 MW Balochistan 12 UEP Windfarm 100 MW Sindh 13 Dawood wind power project 50 MW Sindh 14 Sachal windfarm 50 MW Sindh 15 Sunnec windfarm 50 MW Sindh 16 Matiari to Faisalabad 660 Kilovolt Sindh and Punjab transmission line 17 Matiari to Lahore 660 kilovolt Sindh and Punjab transmission Line

6.9.9.4 Alternate route to Central Asia

The various heads in Central Asian republics have expressed their desire to connect their transportation systems to the CPEC project by China. Prime Minister of Pakistan, Nawaz Sharif visited to Kazakhstan in August 2015, the Kazakh Prime Minister Karim Massimov, conveyed Kazakhstan's want to link its road network to the CPEC project. During the November 2015 visit of Tajikistan President Emomali Rahmon to Pakistan, the Tajik leader also expressed his Govt want to join the Quadrilateral Agreement on Traffic in Transit to use CPEC as a medium for imports and exports to Tajikistan by circumventing Afghanistan; the request received political backing by the Prime Minister of Pakistan.

With the beginning of CPEC infrastructure related projects, transit times between Kashgar and Pakistan's coast will be mainly decreased, which in turn will 187

also reduce transit times to the Kyrgyzstan and hydrocarbon-rich Kazakhstan through existing overland routes already. The Chinese Govt has already developed the road meets to Kashgar to Osh in Kyrgyzstan through Kyrgyz town of Erkeshtam while a railway between Urumqi, China and Almaty, Kazakhstan has also been finished as part of China's One Belt One Road proposal. Numerous land crossings already exist between Kazakhstan and China as well as. In Addition, the Chinese

Govt has declared plans to make railway track from Tashkent, Uzbekistan, for Kyrgyzstan with onwards meets to China and Pakistan. Further, the Pamir Highway already gives Tajikistan approached to Kashgar to the Kulma Pass. These crossings complement the CPEC project to gives Central Asian states approached to Pakistan's ports in deep water by completely bypassing Afghanistan – a country which has been ravaged by civil war and political instability since the late 1970s.

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CHAPTER-7

Conclusion

China and Pakistan have developed a model relationship that is subjective primarily by pragmatic manifestation and the extended experience of working jointly. It has experienced changes over because the post-cold war era has changed the international and regional enviorement. China trail a foreign policy with a global outreach but go on with an essentially region-focused policy by Pakistan. Both sides are maintain strong autonomy for their interface with the have a rest of the world but they have found it useful to maintain a multifaceted and mutually advantageous bilateral relationship that is based on the principles of , mutual respect ,monarch equality and non-interfering in each other’s interiorassociations. In spite of periodic changes priorities of policy for their foreign, both countries actuallytrust that they need to work jointly and matually. China has made the most important contribution to building economic and industrial infrastructure of Pakistan’s and, including the defense.

This association will continue for the relationship but they are probably to face problems on some specific matters that can provisionally slow down the interaction. However, as the free relationship from any ideological pretentions, Pakistan and China can adjust to the changing regional and global atmosphere.

The main threat for the relationship is not the growth of the Sino-Indian relationships but two sets of progressfor Pakistan. First, how far Pakistan can contain the proliferating terrorist and hardline Islamic groups that not only challenge the writ of the Pakistan but also practice their religion based,narrow –partisan agendas the neighbouring statesoutside. If these partly or totally offer foreign policy on priorities, Pakistan will find it tricky to pursue positive relationship with the rest of the world. Second, attention on prority is required on restoring confidence in economy of Pakistan and calming its helpfulfriendship with the international affairs so that it pull towards for investment and trade and there is a big movement of people, goods and services across its territorial boundries.

Active bilateral and Good for relation between Pakistan and China serve the interests of these countries but this relationship does not prevent the need of agood and active relaitionship with the respite of the world.

A framework for good working, for the mutuallink is given by the Pakistan and China Treaty of Good Relations, friendship and Co-operationthat signed in April 2005 by the former Prime Minister of China Wen Jiabao and Prime Minister Shoukat Aziz former of Pakistan. In Janury 2006, this treaty became ative and effective. It not only talks about developing and consolidating mutul relation on the five principles of peaceful basis for coexistence but also needs that no contracting 189

party will unite any coalition or union that infringe on the autonomy, territorial integrity and security of the second. It also proposed that the territory of a contracting party will not be for used thes group against the other contracting party. Pakistan and China have agreed significant strides in their mutul relationand this trend is expected to start, although its pace may vary eventually.

Since the examination of after – 1978 marketsreorganizationera there has been marvelousfinancialtransform in China. Per capita incomesriseupto US$3,650 by 20092 and in the procedurelift the nation to corerevenue status from a meager one on such a level “[a] reduce in the number of poor of this degree over such a smallera is devoid ofchronologicalmodel,” as well-known in a World Bank report. In the route of his growth, China’s proportion of Global GDP has prolonged to 9.5 % by 2009, up from 1.8 %in 1978. (1) Such a greattransform in such a small period of time in a state, with its populace and geographic size, desiresdominant tools to achieve this result. Fortunately it had two assets that became the basis of its financial transformational development. One; thehugebusinessoriented6 (exclusive of Japan and South Korea), with the principal and motivation to investment in its state of beginning. The order was having local enterprise (“TVEs”). The worth of the two is reflected in the fortune of its both rich provinces Guang-dong and the start on FDI reserves. The latter’s prosperity was basefirstlymost importanton its dependence on TVEs.(2)

Like other countries seeking encouragement in how to develop their economy, China implementpolicy that take into account its personalstrength and weak pointalthough learning from other states that precede it on the pathway to financialgrowth. It was lucky to be situated in the locality of states with the uppermost rate of improvementamongrisingstates in the post World War II period, which urbanized by fundamentallyapply a mix up of alikepolicyundertake with personellcharacter, characterize, as the “East-Asia Wonder” by the World Bank.” In East-Asia, various (Japan, Taiwan, South Korea, Hong Kong and Singapore) urbanized earlier and others afterward. Those which developed earlier had lessmonetarycompetitor and lesser populations than those that follow. Possibly, accidentally they have been also capable to attainupper per capita income than the grouping that urbanizedafterward, which also classically had bigger populations than the earliergrouping in the area. This groupingintegrated Malaysia, a multi- ethnic Muslim state like Pakistan which share its British royallyinheritance. As a much lesserstate by inhabitants than Pakistan, Malaysia’s development was achieved with a fewerpowerful set of paraphernalia in its preliminarystep of development than China, though it now appear to have hit anobstacle and wantsadditionalreform to persuademoredevelopment. (3)

1) China Daily, “NBS; China accounts for 06% of World’s GDP in 2007.” October 27, 2008. 2) Staff reporter. Critics worry gian gus growth has too much government. Want China times. May 21, 2012. 3) Since the Asian financial crises its GDP has halfed. Wing Thye Woo. Understanding the middle income trap in economic development July 21, 2012.

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For Pakistanthis indicates its requirement to esteem its volume and the spiritedsurroundings in craft its policy. (4)

The most powerful tools consumed by Govt of the China have been the facilitating of marketing in the countryside sector, both for the the rural industrial and agricultural economy and project sector of the TVEs (which out their latent profit- making potential). The welcoming of foreign investment directly (frist from its Diaspora) in the manufacturing division, economic decentralization with greater autonomy provided to regions and local Govt of country and the creation of regional / metropolitan local systems of governance. In these factors have interplayed with each other, as about 70 % of Govt expenditure for China is at sub-national stage. While, there is better discretion provides to sub-national Govt from the end of the planned centrally, the central Govt still has an active role in applying reforms.

Whereas, the average of sub-national expenditure for China is much greator than in other parts of East Asia region, it is one of a lot of countries where decentralization has taken root. As Roland White and Paul Smoke of the World Bank stated in the chapter free East Asia Decentralizes in the report East Asia Decentralizes: “A primary transformation in the structure of Govt has been taking place across East Asia. Before 1990 mainly countries of East Asian were highly centralized; today sub-national Govt have come out as the fulcrum for much of the regional development.”

7.1 Financial Development a Primary Focus

That for economic change was explains by Premier Wen Jiabo in his stated World Economic Forum Summer Davos event held in Tianjin in 2008: “the country was in a backward and closed or semi-closed state with the economy on the brink of fall down.” (5) Hence, from its beginning the prime focus of the reform process has been on development of economic. The focus is reflected in stufffor establishment of Special Zones for Economic, the designation that raises some cities above others such as the sub-provisional cities, which in some respect give them the same powers as provinces over their economics. This also includes the opening up of coastal regioins for investment, given local Govt discretion over spending and planning. These SEZs gives local discretion of Govt over planning and spending. They also include the western program for development with the aim of spreading development and reducing poverty/ inequity throughout the country (even in remote mountainous areas away from population centers). (6) While these policies are described as reflecting “Socialism with china characteristics”, it is practical to make the more inclusive for dynamic economy. 4) Note; Malaysia and Indonesia also relied on being oil export countries. July 22, 2012. 5) Full text of Chinese premier Wen Jia Bao’s speech at 2008 Summer Davoce in Tianjin. Xinhua.net.com 27 September, 2008. 6) The poverty reduction for ethnic minorties in China with support of UN is an example. UNDP poverty reduction for ethnic minorties July 20, 2012.

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There is an economic price to pay if the paybacks for economics engagement are constrained to a limited part of the population as this decrease economic size, a plight of mainly developing countries. A heritage of Govt owning companies has meant that all governments are more involved for in economic development directly in their relating areas. Govt involvement has also paid off as demonstrated by the spectacular success of the TVEs. More active involvement has given provisional and local Govt insights about successful enterprises for directly that they continue to successfully apply today.

Looking further on, in between cooperation for China and Pakistan is bound to develop their friendship will grow with each passing day.

1. We must valuable and forward time-tested all-weather friendship and continue get deeper our strategic cooperation.

We should always treat China and Pakistan relations from a long-term viewpoint of height of strategic, and continue to maintain common exchanges of between leaders of our two countries for visits. Our two Govts must available good programme and carry out cooperation, on main issues.

2. Developed economic and trade cooperation realize beneficial and energetically win-win outcome.

As the population of Pakistan and China countries totals 1.5 billion, there is big cooperation for potential. Chinese enterprises can play a great role in allround cooperation with development of Pakistan for information and scientific building industrial and high-tech parks and technologies, improvement for household appliances and automobile in order to promote Pakistan Govt socio-economic for development.

3. Attach importance and great for cooperation in the people to people links and areas of culture.

We must strengthen exchange in the region of culture, education, youth and media develop cooperation in people links of our countries, strengthen development of people of our countries Pakistan and China, strengthen growth of human beingpossessions and proficientguidance, enlarge the span of sending juvenile students and visiting scholars to each other and pay special facus to developing a tourist market. Holding activities of national festivals like monthly cultural, film weeks and tourist years will well and strengthen exchanges, friendship and understanding in various social circles especially the youth groups, and will develop a social foundation for friendly cooperation between our govts for the sake of handing down friendship Pakistan and China from generation to another generation.

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4. Strengthen international cooperation and safeguard the common further more interest for Pakistan and China both sides.

Pakistan and China are cooperative partners indispensable to the world stage. The significance their cooperation and coordination in regional and international matters have gone outside the mutual and regional scope. Both sides should links special substanceof promoting democracy in international relations, globalization for general and common development, safeguarding each other’s sovereignty and security and fighting terrorism, and to developing regional sub- regional cooperation (such as that evident in SAARC, Shanghai Cooperation Organization, ARF, Dialogue on Asia Cooperation, ASEM, Cooperation in Indian) in order to defend the largely interests of our two countries and other developing countries. Both sides should work together to gives the diversity of the world and diversify development models, work to construct a pleasant world of permanenttranquility and universal development and make greater contributions to peace and development of the world as well as the progress of mankind.

I am fully confident of the viewpoint for the developing Pakistan and China China relationship.

At the invitation of the Govt of Pakistan, my wife Prof. Deng Junbing and I, former counselor of the Chinese embassy in Pakistan, together with Mr. Lu Shulin, former Chinese ambassador to Pakistan, Mr. an Qiguang, former Chinese consul general to Karachi and Prof. Tang Mengsheng, Director of the Center for Pakistan studies at Peking University visited Pakistan from in February this year.

This visit has made a deep impression on me.

First, the friendship of Prime Minister Syed Yusuf Raza Gilani of Pakistan, Chairman of Senate Naiq, Governor Punjab and Foreign secretary. It is indeed a manifest manifestation of Pakistan friendship with China that we, a non-Govt academic delegation, were welcomed by the Govt of Pakistan and given an unexpectedprotocol.

Govt of Pakistan and its leaderships, and people attach great value to Pakistan and China friendships.

Govt of Pakistan and its leaderships and military force officials praise with one voice Pakistan and China friendship, and sincerely thank China for its valuable and support for earnest aid.

Third, the Govt of Pakistan and people keenly looked forward to deepening and expanding all-weather strategic partnership between Pakistan and Chian countries.

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Together, with the additional secretary of the Foreign Ministry ofPakistan, the Islamabad Council of the World Affairs, the institute of strategic learning the Institute of Regional Studies, the Islamabad Policy Research Institute and ideas on at presentsituation of Afghanistan, Pakistan and US relations and Pakistan and Afghanistan relations, and discussed the ways to strengthen and deepen Pakistan and China friendships. I gave a speech on China and Pakistan relations at the Pakistan National Defense University (NDU), and exchanged views with participants.

I fully agreed with them that in the difficult and changing international and regional matters, Pakistan and China should stongthen strategic coordination and communication over global and regional matters of jointly concern with a broader region. In this regard to the present situation in Afghanistan and the pressure confronted by Pakistan, China and Pakistan should have more cooperation and consultation on Afghanistan issues.

Fourth, Pakistani friends put forward many helpfuland valuable proposals on pragmatic cooperation in between Pakistan -China.

Pakistan and China should additional strengthen cooperation in energy and build an economic corridor so as to solve problems of shortage of power in Pakistan. More Chinese enterprises should be confident to go to Pakistan and build factories and industrial high-tech parks with own investment to improve infrastructure of Pakistan. The Karakoram Highway should be mainted and improved as early possible for transportation. As there is great potential for growing Pakistan in main crops such as wheat, rice and cotton etc, China experts should cooperate with their counterparts of Pakistan.

We strongly deem that with its solid foundation and clear orientation, strategic parternership and co-operation in between Pakistan and China has great promise for development and insfrastructure.

7.2 Experimentation as a Tool for Policy and Institutional Innovation

A distinguishing attribute of the procedure has been a confidence on the value of policy carrying out tests.(7) It has proven to be an important key to ability of China to expertise policies that have worked within situation, as it was treading a path no other Communist country has done before it. Since the onset of the transformationera, the state has been in theprocess of constant testing in and institutional reform. This is a main factor in its capability to keepactivedevelopment. Typically reforms are applied in trial areas and then expanded to other areas.

7) Sebastian Heilmann, policy experimentation in China’s economic rise. ST Comp int Dew June 2008.

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Sometimes the initiative is guided by the central Govt, other side it is simply a local proposal. An early example of this experimentation is the change from communal farming tried by Xiaogang village in Anhui region. This also earnings diversity in development for encouraged.(8)This achievement has led Justin Yifu Lin and Yan Wang of the World Bank to monitor: “The Chinese experience demonstrates the advantage of and experimental evolutionaryand main bottom reforms over the comprehensive and top and down, big bang access”

7.3 Cross Pollintation through Transfers and Inter-System Aid and Support

Another distinguished attribute of decentralization for China is personnel transfers and aid from one provisional or local Govt to another region with in country. This is used to help and get better local conditions in the target. This can take place in an internal region and intraregional context. Examples of this are personnel transfers from the wealthy southern part of Jiangsu to the careworn northern part of Jiangsu, aid and knowledge given by Changjiang village in Jiangsu to Xiaogang village of Anhui Province(9), and from Shanghai to Xinjiang.

7.4 Performance Measurements as a Management Tool

Harmonizing the use of experimentation for policy as a tool is the use of measurement of performance that begin son after the reforms began. Sub-national administrator are estimated by the central Govt depended on the range of criteria. Over time the program has estimated and become more complex and sophisticated. Like main innovations it started at the local Gov level, termed as the objective responsibility system. The program set objectives and held officials responsible for fulfillment. What was unpaid at first and lacked standardization became more institutionalized in 1990. Officials have understood its value in implementation of policy and it has also been used to shift officials in the systematic wastefulness. Central and provinces Govt have used tool for this function. Jiangsu which has had a persistent north/ south inequity predating the reforms, exacerbated by the south wealth, has used this tool to select competentheads for its less developed in the north region (the part cut off by the Yanstz River and for the main part left out of the open access policy). Presently some of the examples are Shaanxi region/province which is using it to efficiency track of cleaning polluted rivers; while Nantong is using it to track performance of goals assess individual managers and organizations.

Targets set in the national 05 year program are handed down to provincial Govt, which add their own aim and pass them on to the next level down (usually the prefectural level).

8) The example, “South Jingsu model” and “Winzhu model” in Zhejiang. Zhijki Wang Jin chuan Shi. With the case study in Zhejiang and Jiangsu.economy and society.org. 9) China today, “A modern former”, China today,com September 16, 2011.

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They add in addition targets and pass them on to the next level down (typically the country Agencies with liability for policy for achievement in different sectors are also in usefor the process. Prefectural level cities estimated the units under their supervision and develop league tables identifying the leading performers. Initially the system focused on meeting targets was related to the economy. The incentive for meeting targets is tied to promotion and transfer within the civil service.

Since the beginnging for 1990, the central Govt has become increasingly implicated in the development to encourage standardization and more clearly specified measures of performance, moving the system from one that was almost entirely input based to one that increasingly measures outputs. However, many targets still carry on to focus on input, ven thorough sustainability and social goals are now included. Improvements in the plans have meant that the targets have become measurable, specific and concrete. The process is still developing as inefficiencies have affected value, overall performance and disincentivised collaboration to solve extraterritorial problems. (10)

7.5 Decentralzation as a Tool for Fast Growth

In contrast to East Asian countries, it has been noted, “Where the central Govt was de facto the only state with any significant power of its own, China’s developmental reform was from the outset accompanied by the delegation of central authority and initiatives for promotion of local areas. One key consequence of such a difference is that, while the East Asian NIEs’ development trajectory was heavily geared for sectoral policies for the goals target, China’s path to date has been mainly regional in nature.”

In terms of decentralization for Pakistan, the most radial changes in China relate to the position of local Govt in development. However, a corollary of that is how local Govt areas are planned. Unlike, local Govt of for Pakistan have been the core sub-national unit in China’s economic increasement and structure has been an vital part of their role for development in economic. Even Malaysia, with a fraction of the population of Pakistan, without s dynamic local Govt sector, demonstrates that a nation I ill serve when failing to recognize the role good it can play in its economy. In Pakitsan’s neighborhood, the idea of learning from China’s fiscal decentralization has already been lift up in Sri Lanka.(11)

10) The Burgeoning cross boundary in collaboration for economic development may counter the later problem as the interest of the partners are in improved performance. July 02, 2012. 11) Dr Laksiri Fernando Senior Political Science and public policy University of Colombo writing in the Asian Tribune in November 21, 2010.

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7.6 Efficient (De Facto) financial Fedralism

Financial devolution has replaced a federaleconomicexecutive system in the post- Mao age. There have been two phases in this transform and owing to insufficiencies in the customaryfigure, more reforms are being measured. The first stage includes a financial contracting method and prevails between 1978 and 1993. Since 1994, anexciseallocation system has been operational. Financial transfers from the federaladministration to the province and from the province to the local administrationcomprise the principalincome sources for the secondarystage of administration. The excise allocation reforms of 1994, defineexcise as central monies, communalmonies and local monies.38Because there is no exactfederal managementstrategyregardingspendingcoursework, there are upto the prudence of each level of administration. As a consequence, the higher level managementprescribes the project to the level instantaneouslyunder it. 39

Under the exciseallocationorganization, the federaladministrationkeep hold of about a third of the consolidate revenues accumulated from sub-national government and after that province’s to local administration follow a hierarchical prototype with exceptions in a small number of cases.

7.7 Comparison of China’s FTA with Pakistan & ASEAN

China had signed FTAs with eight states and region, comprising ASEAN, which had become ready from January 1, 2010. ASEAN and taxremovalcover 90% of commoditiestradeamong China and ASEAN states. Under this FTA, the normaltax rate of China intended forsupplies from ASEAN would exist 0.1% instead of 9.5%. If any one wants to compare Pakistan’s FTA with China and ASEAN, the result would be find that the objectsenclosed under the China-ASEAN FTA at 0 %tax put ASEAN at abenefit as on the similarobjects there are duties on export from Pakistan, portrayal Pakistanigoods less gorgeous for China’sbuyer.

Similarly, China had given dispensation of 0 %tariff to 33 less developingstates of the world. These statesconsist ofthree from South-Asia that is the Bangladesh, Maldives and Nepal and 26 from Africa. The imports included agricultural goods,textile andmarinegoods and mineral deposits, etc. The lessonsconcluded that the Pakistan is evidently at a disadvantage with condition to its opponent.

Besides, there are a variety of non-tariff hurdles as well to Pakistan’s export to China. Although they are not Pakistaniexplicit but these have a blow on Pakistaniexport to China. For quotation just one example, Pakistani mangoes could notgo into the country through Chendu, the fourth major city of China, have two flights from Karachi each week owing to the protocol of the harborentrance.

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Looking forward, collaboration between Pakistan and China is bound to amplify and their friendship will rise with each passing date.

1. We have to value and carry further time-tested all-weather friendship and carry ondeepen our strategic collaboration.

We should always care for China-Pakistan relationships from a long- term viewpoint of strategic height, and carry on to maintain frequent interactions of visits between leaders of our two atates. Our two governments should make good policy for and carry out collaboration, on main issues.

2. Expandingfinancial and trade collaborationvigorously and comprehendvaluable win-win consequences.

As the inhabitants of our two states totals 1.5 billion, there is great potential for collaboration. China’s enterprises could play a better role in all-round collaboration with Pakistani development of information and scientific technology, constructing industrial and high-tech parks, development of home appliances and vehicle in order to uphold Pakistani socio-economic expansion.

3. Attach big and significant to collaboration in the regions of culture and people to people contact.

We have tomake stronger exchange in the regions of culture, education, youth and media developingcollaboration between people of our two states, strengthen development of people of our two countries, strengthen development of human assets and skilled training, develop the scope of sending young students and visiting scholars to each other countries and pay uniqueconcentration to rising a tourist market. Holding actions of national festival like cultural months, film weeks and tourist years will make stronger exchanges, understanding and friendship between varieties of social circles particularly the youth groups, and will build up a social base for friendly collaboration between our two countries for the sake of hand down Sino-Pak friendship from one age group to the other.

4. Further Strengthening Global Cooperation and Safeguardening the Common Interess of Both Sides.

Pakistan and China are supportiveassociatesessential to the world stage. The importance of their harmonization and collaboration in local and globalrelationships has gone outside the mutual and local scope. Both sides should fastenparticularsignificance to promotedemocratic system in globalrelationships, globalization for general preference and ordinarygrowth, combatingviolence, defenseof each other’s dominion and security, and to rise regional and sub-regional collaboration (such as that manifested in SAARC, Shanghai

198 collaborationassociation, ARF, ASEM, conversation on Asia Co-operation, Co- operation in

Indian Ocean) in order to guard the overall wellbeing of our two states and other risingcountries. Both sides must work jointly to uphold the multiplicity of the world and varyprogressmodel, work to construct a pleasant-sounding world of permanent peace and common expansion and make largerdonations to peace and growth of the world as well as the improvement of mankind.

I am fully confident of the prospect for the risingSino-Pak traderelationships. At the invitation of the Pakistani government, my wife Prof. Deng Junbing and I, former counselor of the Chinese embassy in Pakistan, together with Mr. Lu Shulin, former Chinese ambassador to Pakistan, Mr. an Qiguang, former Chinese consul general to Karachi and Prof. Tang Mengsheng, Director of the Center for Pakistan studies at Peking University visited Pakistan from 21 to 26 February this year.

This visit has made a cavernousfeeling on me. First, the friendship of Pakistani Prime Minister Syed Yusuf Raza Gilani, Chairman of Senate Naiq, Governor of Punjab and the Foreign secretary. It is really an obviousexpression of Pakistani friendship with China that we, a non- government academic delegation, were invited by the Pakistani government and given an unexpectedwelcome.

Pakistani leaders, government and people attach largesignificance to Sino-Pak trade relationship. Pakistani leaders, government and armed officials eulogize with one voice Sino-Pak friendship, and honestly thank China for its valuable support and earnest support. Third, the government of Pakistan and people excitedlylook forward to deepen and growing all-weather strategic relationship between our two states.

Jointly, with the additional secretary of the Pakistani Foreign Ministry, the Islamabad Council of the World Affairs, the institution of strategic studies, the institution of Regional Studies, the Islamabad Policy Research institution and thoughts on contemporary situation in Afghanistan, Pakistan-US relations and Pak- Afghanistan relationship, and discuss the ways to strengthening and deepeningSino-Pak trade relations. I delivered a speech on Sino-Pak trade relations at the National Defense University of Pakistan, and exchange views with participants.

I wholly agreed with them that in the complex and varyingglobal and regional circumstances, Pakistan and China should make stronger strategic communication and co-ordination over international and regional problems of common concern with a broader hallucination. With regard to the

199 contemporarycircumstances in Afghanistan and the force confronted by Pakistan, China and Pakistan should have newdiscussion and co-operation on the problem of Afghanistan.

Fourth, Pakistan’s friends put forward many importantproposals on realisticcollaboration between China and Pakistan.

China and Pakistan must further make stronger energy collaboration and construct an energy corridor so as to resolve Pakistan’s trouble of energyscarcity. Furthermore China’s enterprises must be encouraged to go to Pakistan and constructindustrial units and high-tech industrial parks with their own savings to get better Pakistani infrastructure. The Karakoram-Highway must be revamped and improved as soosn as possible. As there is largeprospective for rising Pakistan’s major crops such as wheat, cotton and rice, Chinese experts mustassist with their Pakistani counter-parts.

We powerfullyconsider that with it’s a rock-solidunderpinning and clear direction, strategic relationship and collaboration between China and Pakistan has enormousguarantee for growth.

7.8 China Discover Pakistan an Open for Trade at primaryIndustrialized Fair

Lahore: “China’scorporations had been consideredchanging their manufacturing units to Pakistan,” told Pervaiz Malik on Saturday, Federal Minister for textile and commerce.

He talked to the media at the inductionceremonialevent of the opening Chinese Exhibition, 2017 of Mechanical and Electrical Machinery.

He told that Rs-180 billions package of textile is presently being evaluated by his department on the route of Shahid Khaqan Abbasi, the Prime Minister. “In fact the pack up is being evaluated to take awaysignificantproblems in it earlier than it could be appled in true letter and spirit,” elucidated by the Prime minister.

The Exhibition consisted on three days has paid attentioncontribution of as 200 Chinese business personnel, on behalf ofa number of industrial divisionsmechanized electrical, mechanical as well as other sort of machines, comprising electric automobile.

“The reply of producers from Pakistan, distributors along with general patrons to our goods areactuallyastonishing”, Jack Xie,the Director ofMarketing the Changzhou Keytech Vehicle Company Ltd, supposedwhereastalking with Dawn. “Thus keeping in view the comment, we are taking into account to furthermoreset up 200 our manufacturingcomponent in Pakistan so as to proffer our commodities to Pakistani on chargeesless expensive than China.” His corporation

has show-cased a variety ofminute electronicautomobile, loaders, motorcycles as well as rikshaws etc.

In view of the expo organizers China-Pakistancombined Chamber of industry and commerce (CPCCIC) along with the E-Commerce entrance the three daysoccasion in the foremost of its category since it has fetched Pakistan to China.

“The plan to carryspeculation in machinesdeveloped had really been drifted in the China’s symposium last year in which it was determined to reposition China’sdevelopingamenities to Pakistan,” supplemented by Mr Xie. He told the occasion has facilitated China’scorporations to locatedualbusiness enterpriseassociates.

Numerous local corporationshad also contributed in the occasion.Huge touristrevenue was observeed at the stalls which show-casing, motors, electronicautomobiles, rikshaws, equipment linked to energyconduction lines and telecommunication sectors. “We produce transmission lines (cable) conductors, insulators and toweralong with in Pakistan we are consideringhigh-qualityreply really,” supposed Mr Lee, Project Manager of the Shandong Qixing Iron Tower Coy Ltd. He told his corporation had been planned to launch a plant in Pakistan almost immediately.

In view of the organizers argue, over 10,000 people, counting Pakistani and Chineseupper level machinesproducers, entrepreneurs,businessmen, and shareholderscontributed on the initial day of Exhibition. “As severalof 100 stalls have been setup by China’smoderncorporations and approximately 200 personnel of the China’s machinery production haddeliberatelybeen travelled to Pakistan to discovercooperativeventure and corporationpotential with our machineproduction. A number of consultancy companieswhich have also setup their stall at the Exhibition to help the investors,” explained by a representative from the organizers.

7.9 Trade Balance Tilts Further In Beijing’s Favour

China is emerging as the main trade partner of Pakistan in 2016-2017, though exports to Beijing have been waning for the last four years. Exports to China equaled to just 15% of imports from the same country, according to statistics release by the State Bank of Pakistan (SBP).

China’s products are replacing local commodities and becoming a leading force in the domestic market, statistics shows. Exports to China are geting lesser to $ 1.62 billion in 2016-17 from $ 2.69 billion in 2013-14. Imports from China

201 in disparityraised to $ 10.53 billion in 2016-17 from $ 4.73 billion in 2012-13, an enhancement of 123 %.

Four years back Pakistan exports to China were 45 % of imports from the bordering country. The part felt to just 15 % in 2016-17. The govt.argued that

China-Pakistan Economic Corridor (CPEC) associated imports are behind the lift in overall imports. However, trade statistics shows imports from Beijing have been enlarged each year as Pakistan constantlyfails to grow exports to China. The ministry of commerce never announces any strategy or plan to explore the Chinese market for Pakistan’sgoods.

“Not merely are China’sgoodswhich are replacing Pakistani goods in the domestic market but also the Pakistani goods like ceiling fans are no longer Pakistani most parts like copper winding are imported from China but fans are sold as Pakistani goods,” told Rashid Aziz, a merchant of ceiling fans. Local markets have been swamped with smuggled China’sgoods which are sold explicitly. Imported and smuggled Chinese commodities have entiredominance in the local market hurting enduranceforecast of local products like furniture, tiles, glass items, wooden goods, fans, iron’ cotton finished products, and steel products etc.

No official estimationisobtainable as far as the market volume of smuggled Chinese goods is concerned. But natives in local markets consider the value of smuggle commodities can be privileged than that of official import. The official figure of imports from China is also doubtful by self-governing economist. They say Chinese exports to Pakistan are about $ 5 billion upper than the figure which is published by the Pakistan.

7.10 Exports to Beijing are heavily concentrated in cotton and rice

The invasion of inexpensiveimport from China had left an undesirable impact on the homeproduction as medium and small size industries (MSEs) are loosing land to goods from Asianchiefeconomy, in viewof a currentstatementavailable on the State Bank of Pakistan’s website.

As endorsedby two officials of SBP, the statemententitled “Dynamics of Pakistan’s Trade balance with China” declared the mutualbusinessequilibriumremaindertiltedto the China. Pakistaniamount of mutual business extended and reaches13.8 billion U.S dollar in 2015-2016, up from 2.2 billion U.S dollar in 2004-2005. Though, Pakistani export to China boosted from $ 0.4 billion in 2004-2005 to 1.7 billion U.S dollar in 2015-2016.

“Import from China had grownspontaneouslyenlargedfrom 1.8 billion U.S dollar in 2004-2005 to 13.9 billion dollar in July &May 2016-2017”, alleged the statement. According to the excisedecrease modality of Chinese, a small number of Pakistanicommodities having comparativelybigger export potential for visage high 202 tax rates moreovergetting no special consideration on Chinesepresentinventorytold the statement.

For example, Pakistan’sdry fruits have a tax rate of about 25 %, partially- mincedorcompletelypulverized rice/broken rice 65%, foot wear wood metal/base toecap 25% and men’s garment of cotton 16%, it had been told.Ascompared toobjects, in which lack ofviablebenefitlike as digital cameras,telephone sets, electrical machines and toys were incorporated in the taxremovallisting of China.

The statementtold Pakistanioutskirts of inclinationbattered due to Chinese free trade agreements (FTAs) with other statesparticularly with members of the organization of south-east Asia’s Nationwide.

It recommended that Pakistan must seek the similarstage of taxconcession on its exports to China as enjoyed by its competitor from East-Asian states. “This may give our exports an equivalentchance to contend with the competitorgoods in China’s markets”, told the report.

Due to low-pricedinformation from China local industrialization of electric machinery, ceramics, bicycles,paraphernalia, ply board, chip board and a number of other small sizeindustries had been affected. “Though sufficient data is not obtainable in support of the case, the invasion of import consumer possessions and non-availability of their local alternatepresentsadequateproof that local SMEs are behindapproximately in the household market”.

The statementsupposed, Pakistaniimpending export regions remain partial because Chinese out paste it in approximatelyits entiremainmanufacture sector. China currentlyoccupies the biggest share in Pakistani total import 29% and is followed by the United Arab Emirates 13%. The main items of imports included high-tech machinery, electrical equipment, nuclear reactors, organic chemicals, iron and steel and syntheticfilament. In fact, more than half of Pakistan’s imports of electrical equipment and machinery are from China.

After the FTA in 2007, the top import from China electrical, electronic equipment increased by 68% of all imports that product from the rest of the world. The exports of Pakistan to China which are greatlystrenuous in rice and cotton, amounting for 75% of the country’s total exports to China have beenamplified from $358 millions in 2006 upto $968 millions in the year 2016.

7.11 The new Silk Road and the Sea

The imaginations of people have been captured from the tales of the old Silk Road for centuries across the world. The ancient China has been linked from East to West through a network of trade routes, around the world for two trades of Silks, spices and other trade good in the history. The trade routes are a complex of roads 203 and wagon routes which were early the rough routes, commenced from the Han dynasty (207 BC – 220 AD). These roads are intersecting the Central Asia, India and currently Pakistan. At present we can see the leftover some of these routs in the regions of Baltistan, Gilgit and alongside the Karakoram Highway.

Now a day’s a new “Silk Road” has been commenced to connect the China through Pakistan to the Arabian Sea, towards the west corridor which ends at the province of Pakistan “Balochistan the Gwadar” and in the East at Karachi. The China-Pakistan economic corridor (CPEC) will be constructed at an amount of $ 46 billion. The CPEC project consists of a network of roads and railway lines, oil and gas pipelines, the CPEC will be shortened the distance for the transportation of gas, oil, goods from the Europe, which cuts the cost of common transportation. The CPEC will enormously be beneficial for the Pakistan properly managed.

The project of CPEC is controversial within the Pakistan among the provinces a well as all over the world. There is a high level of political debates between the Federal Government and the provinces regarding the routs, solid benefits for Pakistan, Pakistani jobs and the clarity of the agreement with China. It is enormously surprising. It is the largest project which came to Pakistan and each province desires the high benefits for itself. No doubt it can be said that overall benefit will go to the nation, this is the real matter. China is the investor in the CPEC project and all the debates are of constructive in nature, not destructive and outcomes will be achieved for Pakistan as well as the China.

Security is a challenge and highly concerned. For the protection of Chinese engineers, contractors as well as the infrastructure during the construction, a special task force has already been scheduled. The main focus of CPEC project is to unlock the sea route to the Europe and other markets as well. There will be a great risk without the safekeeping of majorport and Pakistani regional waters. The security of the ports and regional waters along which the sail ships from and to Karachi and Gwadar will be predominantly to the upcoming entity of the trade route.

In the field of international maritime security, the Pakistan Navy had a great experience. It had already played various roles in the two vitalmissions forces as the marine security operation through the Arabian maritime is protected, joint Task Force 150 (CTF-150) which is aninternationalalliance naval task force. It has based in Bahrain and monitor, inspection board and to hurdle suspicious shipping as a reply in the international War on Terror in the Arabian ocean, it will enhance in the African region and in the Indian Ocean.

The Combined Task Force 15 (CTF-151) has been established in 2009 and is aninternationalnaval task force which will protect the piracy attack in the coast of Somalia and the Gulf of Aden. Its main mission is to secure the navigational freedom and to build the capability for the counter piracy of armed robbery at the sea.

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There have been conducted Maritime exercises with the China’s Navy, which created a great attention in the CPEC security and for the protection of mass investment. This will also improve the capability of Pakistan Navy and as wellbuild the relations to the Foreign Maritime existed Task Force commitments.

The CPEC project is an extended term project which will acquire few years to be effective and wholly operations and to receive the whole benefits for the China as well as the Pakistan as the partner and the investor. If the CPEC will truly fulfill the potential and became the latest “Silk Road” and Pakistan gain the vast economic chances, than the Pakistan will also spend in its own prospect. For the successful and secured nation state equipped and resourced and the maritime security and operations will take their place as mandatory component which is included in all discussions.

7.12Factors inhibiting development in Trade and investment cooperation There are a number of factors which are inhibiting the preferreddevelopment in mutual trade and investment co-operation: Some of these are given under:

1. The chiefcauseall for low-altitude trade which could be accredited to non-complementary and the realityis that China has been contending in almost all major sectors of Pakistan’s exportable commodities.

2. A prolong factor which persist even today has been the business of Pakistan’s community’s constrictedimage which has been remained sheltered onto their recognized export destination such as the Western Europe, US and the Middle-East. Pakistan’s exporters have barely made solemnefforts;moreover to expand the base of exportable possessions or explore other market, particularly in Eastern Asia, for attractive the level of their export. This mindcomplex with the Western-markets, which obtainedcomparatively high income limits, and a non- innovative export move toward, has continually been deflation Pakistani exportsprobable for the China’s market.

3. The safety ofsurroundings in Pakistan, particularly in two of its west- provinces isdeterring China’s private sector reserves. Over partially a dozen unluckilyincidents in which Chinese employees and peoplemissing their lives have impacted the image of Pakistan as an investment goal for the Chinese business society. Insurroundings of deteriorating law and order situations, ensure the defense of the Chinese workforce is a serious challenge.

4. China is prompt integrating into the international economic system and its business, investment and fiscalcollaboration is now gradually more being driven by market services, and not by the directions of the state machinery’ it used to be the case in the ancient times. Corporation and industries are creating their decision 205 purely on commercial feasibility and productivity of project rather than instructions or directions from China’s Govt. In spite of this, the China’s Govt. has been charming the China’s private sector on long-standing basis, which is significant for sustainable economic and businessrelationships.

5. As well, creating the Pakistana’s private sector more ground-breaking and down to business is vital to create any substantialconsequences without which it may even misplace the present level of business to more spirited and hostile market forces. It cannot be seen to occur in animmense way, although the government in Pakistan is to patronize the private sector and the function of the public sector is being shortened to makeenablesurroundings for the private sector endeavours.

6. Pakistan’s exports towards China are centered mostly on cotton wool and cotton textile. There is agrowingtendency in the seafood exports and pelt. This potential can only be realized by revamp the dealing outtechnology and produceglobally acceptedexcellence. Pakistani should seek China’s help to meet Chinese standard of seafood import.

7. Although most of Pakistani imports from China are valuedfurther, more than 85% of its exports to China are raw supplies, such as cotton wool and material, and chrome and copper ores. For instance, gold and copper from the Saindak Copper-Gold scheme is exported to China.

7.13Suggestions to Improve Bilateral Trade Relations

In my modest but vigorous point of view, it looks to me that we have to build some type of a reliable declaration which will efficiently defend us in opposition to these hazards. An outline correspondence to the Security Council, stipulated that is departing to be the meaning of creating this announcement, is under research in the assignment perceive sound and will shortly put forward to you.

I could reassure you that, in constructing this proposal, I am not at every oblivious of the complication of the current circumstances and the fragility of our affiliations with China, by as a lot apprehensive and cautious consideration as I am capable to material, I believe that a proclamation, which evidently affirmed our pledge in Kashmir, would not essentially involve us with China. On the opposing, it might nevertheless be that China would not counter harmfully to an announcement from Pakistan inquiring the extremely foundation of the position occupied by India concerning Ladakh.

I am captivating the freedom of building this proposal to you as, in my consultation here; I had established a large worry in case the current Indo-China circumstances allow the consciousness to resolve that Pakistan does no longer 206 believe itself apprehensive with occupied Jammu and Kashmir. It is of course, just one feature of the issue and it is intended for you to outlook it in the better viewpoint which would acquired the approach of the US. Currently moments, though, this feature appears to be quite significant in it. I make expectation that you would not wits my captivating a chance to compose this proposal to you.

There are a number ofproposalsfor improvement of the trade relationship which are given as under:

Presentlythere is requirement to recompensesmallbusinessamount and Pakistan’s trade shortfall. Intended for this point, openhanded Chin’ssupport is necessary to construct infrastructure and to getself-reliance. No hesitation, the the majority of the helpprovided by Chinese was either in the type of interest -free loans or grants, which lead Pakistan to finisha number ofmainplans.

Diversification in exportedcommodities is criticalwith efficient trade policies. It willimprove the proficiency and put right the trade disparity with Chinese. It is not feasible for Pakistan to raise its sell abroad to china exclusive ofgettingmodification in its possessions.

Discovery of new regions is essential for attractive trade dimensions. There is vastfreedom for speculation and combinedventure in fabric, oil exploration, leather and fisheries. The fabricspecialists opined that rising China’sspeculationall along with improved friendly and quotamanner of the purchaser, Pakistaniyard goodscansimplyexpand. An additionalprospective is the industry of polyester fiber which is a worthsupplementaryproduction though it industrialized in 1982. The capability of the export was 300,000 tons annuallyupto the year 2002. This regionrequiresmutualventure of both statess to make stronger the financial system.

It is the requirement of the present age that the industry and trade go in hand for appropriateworthadding up. For this intention, timely steps andantagonisticmarketpractices can play a vitalfunction to get the preferredconsequences. The schedule of conversation, with Chin’scounterpartmustfocus on looking forassistance in upgrading of valuegoods, contemporary equipment and plants, raw material of superior feature, proficient skills, trade ethics, swift and well-timed decision andencouragement of mutualbusiness enterprises.

Chinese never connectsstring with its supportto Pakistan and this strategy is helpful for Pakistan in raising its sell abroadwith no any complianttranscription or limit on localor provincialsafety policies.

Several Chin’s entrepreneurs are spendingthroughout the globe but South- Asia is further in requiring of asset owing to the smallstage of businessexpansion of

207 the localnation. The amount of the FDI is extremelysmall in the area. The statesrequirecreating their rulescomplimentary to Chin’s investment.

Localswap programmes are essential for the encouragement of localcollaboration in business. These willgivechances for the states to procure each other’s goods. To initiate the merchandise, exhibition and fairmust be prearranged

at the localstages. To get the preferredconsequences, contribution of dealers and shareholdersmust be ensuring.

With nogrowth of bank facilities, tradeand economiccollaboration is hard in the currentsituation. Banking connects are inadequate and opportunity of the new- fangledtwigs of nationwide banks is the requirement of the age. Pakistan, China and other statesmustbelieveconcerning the general banks or mutualfinances.

An agreement on transportationinterchange was inked between Pakistan, china, Kazakhstan and Kyrghyzstanin 1995 but that was not implementingtimely. The contract comes intoforce in October, 2003 subsequent to eight years owing to negligibleproblemssimilar totransportationcost and route permit. Such deliberatespeeds of performance of policies impedelocalcollaboration and have to be restricted in prospect. Other is extension of such contracts for the remuneration of other land-locked states of the area.

The county is affluent in mineral deposits like copper, gold and expensivegemstone. Chinahas almost 171 mineral depositswhich have been discovered, and are 12 percent of the world’sentirety mineralspossessions. Enormous powerassets are also originated in Pakistani province the Balochistan: the position of Gwadar deep seaport. The consumption of innatepossessions willaugment the localimprovement.

It seems that China owes equal or perhaps greater credit for maintaining this durable partnership. From the very beginning, it pursued ties with Pakistan from a long-term perspective while keeping in view the permanent factor, geography. Beijing demonstrated patience, restraint, and non-interference; and took an inclusive approach to establish links with Pakistani polity and society regardless of their political, religious, and social orientation. Even though China was a big donor, and in that capacity could have exerted its influence on Pakistan but it did not. There is hardly any publicity available evidence that demonstrates Beijing ever dictating a course of action, pressure, or use of sanctions to compel Pakistan to adopt a certain policy. Instead, China treated Pakistan with equality and respect. Even on the sensitive issue of terrorism (attacks on Chinese workers in Pakistan and some Pakistan-based militant groups’ links with Xinjiang separists), which directly affected China’s prestidge and internal stability, Beijing showed maximum restraint. In the economic and defence sectors, China not only provided assistance sufficiency. Whether these characteristics were part of China’s overall foreign policy

208 or manifested in economic relations with Pakistan alone could be measured by studying China’s ties with other countries. For Islamabad, these features distinguished Beijing from Pakistan’s other allies.

However, the above structure of the relationship existed from the early period of the relationship until recent times. During this phase, the overall trade relationship was moderate, smooth and stable, and carefully protected by the top leadership of both countries. This phase seems to have come to an end with the advent of new Chinese leadership under Xi Jinping, and the launch of CPEC in around 2013. The trade relationship has reached a crossroads where it can either grow exponentially, or dilute to a normal state-to-state relationship. China’s promise of unprecedented economic assistance, inclusion of CPEC in its Five Year Plan and unprecedented engagement demonstrates Beijing’s heightened interests in Pakistan. This may also modify China’s hitherto non-interference policy pushing Beijing to take more active engagement with Pakistan. On the ither hand, Pakistan is facing a myriad of challenges; the country has a weak leadership and deteriorating law and order situation. To what extent Pakistan is ready to exploit this huge opportunity presented before it remains to be seen. On the other hand, if China finds its investment at stake, it might review the structure of its trade relationship with Pakistan.

Some other aspects of the trade relationship also need attention. Irrespective of effusive rhetoric, the relationship remains far below its actual potential. The strategic dimension remained dominant; especially from the Pakistani side whileeconomic, trade, and people-to-people contacts remained low. Within modest trade, the balance of payments, since the 1970s, has tilted in favour of China and is unlikely to change any tme soon. Although China has been reiterating the imporatnace of trade and economic ties, hardly any progress has been achieved in this regard. One of the reasons behind limited economic and trae ties is the fact that Pakistan has only regarded China as strategic ally, and paid less attention to studying China’s economic progress, especially since the reforms and opening up, and how to benefit from it. Even in the age of CPEC, this seems to be the dominant perspective in Pakistan. Until recently, lack of expertise and major studies on China showed Islamabad’s casual approach. In a globalized world where regional connectivity, trade, and economic interdependence are superseding strategic considerations, if Islamabad had not paid attention to changing realities and continued with its current approach, it might have slowed down the pace of relations. A change in Pakistan’s policy is particularly important since the concepts of ‘connectivity’, ‘trade’, and ‘economic cooperation’ is at the center of China’s ambitious ‘one belt, One Road’ initiative.

It is also argued that the relationship was started almost on equal footing but has been loding itd traditional balance. China’s rise to a great power status is almost inversely proportional to Pakistan’s weakening power – internal and

209 external. As a result, Pakistan has become a junior partner, while China is taking the driving seat in determining the future direction of the trade relationship.

Furthermore, it appears that China and Pkistan’s claims of having an ‘all-weather’ friendship are relevant to their bilateral arena. It is correct that Pakistan is the only country out of China’s other allies with whom Beijing’s ties have remained stable. Similarly, no country – big or small – and from the Muslim bloc or the West could supplant China’s lace in Pakistan’s foreign policy. However, if the durability of relationship is indicative, this is limited to China-Pakistan relations. A cursory look at the world scene shows that there are other examples of durable state-to-state relationships. For instance, US relations with its allies in Europe such as Britian, in East Asia with Japan and Taiwan, and in the Middle East with Israel have been equally consistent since their inception. The level of US commitment and assistance to these allies is not lesser than that of China’s to Pakistan.

To sum up, a holistic approach, taking all factors together can help develop a better understanding of the China-Pakistan realationship. Nothing is permanent in neither international relations nor the Sino-Pakistan entente. Given the trajectory, mutuality of interests based on geography, and accumulated ‘trust’, the relationship is most likely to grow further. If CPEC is implemented as conceived, it will take the relationship to new hights.

Chinese investment in CPEC is the major in the history of the both countries and is analytical of the high stake Beijing has invested in Islamabad. It is a vitalconstituent of China’s OBOR program, and serves China and Pakistan’s financial and strategic intrest.The project of CPEC can potentially harmonize Chinese moderenization of its West region to neutralize separatist’s tendenacies all the way through the financialsupport of the Xinjian while gaining shorter admittance to the Indian deep-sea, the Gulf, the Middle East and away from. The CPEC comes into view to be the most effectual way of diversifiying China’s exports and power imports. For Pakistan, it will be about an unprecedentend stage of investment principal to infrastructure expansion and employmentconception. Pakistan mightcreate revenuesthroughout the royalty of it earn. Tactically, Chinesesponsorship will improve Islamabad’s organization in localpolitical affairs. The CPEC envisages a degree of Pakistani amalgamation with China. At the instant CPEC has commercial worth. Though, its tactical aims cannot be ruled out in the long-run. Given the reality that Pakistan is steadily loosing its traditional importance vis-à-vis China, the accomplishment of CPEC will decide the future directions of Sino-Pak trade relations.

210

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Bernstein, Rivhard and Munro, Ross h. (1997a) ‘the Coming conflict with America’, Foreign Affairs, March/April 76(2): 18-32.

(1997b) The coming conflict with China, New York: Alfred A. Knopf. Bilver, S. (1998) ‘East Asia in Russa’s Foreign Policy: a New Russo-Chinese Axis?’, The Pacific Review, 11 (4) 485-503.

Pakistan Federal Government and Foreign Publications / Documents

A Review of Foreign Economic Aid to Pakistan, Ministry of Finance, Government of Pakistan, 1962.

Economic Survey of Pakistan 198081, Finance Division, Government of Pakistan.

Foreign Office Year Book 2004-05, Ministry of Foreign Affairs, Government of Pakistan, Islamabad.

Pakistan Economic Survey: 1963-64, The Economic Advisor Wing, Ministry of Finance, Government of Pakistan.

Pakistan Economic Survey of 1979-80, Finance Division, Government of Pakistan, Islamabad.

Encyclopedia and Year Books

Rafique Akhtar (ed) Pakistan Year Book, 1976, East & West Publishing Company, Karachi.

222

Pakistan Year Book, 1969, National Publishing House Limited, Karachi.250

Pakistan Year Book, 1981-82, East & West Publishing Company, Karachi.

Newspapers/Magazines/Journals

Daily Times, Karachi.

Dawn, daily, Karachi.

Morning News, daily, Karachi.

The Frontier Post, daily, Karachi.

The Muslim, daily, Islamabad.

The Nation, daily, Lahore.

The News, daily, Karachi.

The Pakistan Horizon, Quarterly, Karachi.

The Pakistan Times, daily, Islamabad.

Quarterly Chronicle and Documentation, the China Quarterly

Chronology of Events, Pakistan Hroizon, Pakistan institute of international Affairs, Karachi

Press Clippings, Institute of Regional Studies, Islamabad

AFP

Asia Times

Asian Recorder

Associated Press of Pakistan

Associated press, The Aviation week and Space Technology Business Recorder, Karachi

China Daily, Beijing

223

CNTV

Daily Times, Lahore

Deutche Presse-Agentur

Economic Times the Bombay

Express Tribune, The Karachi

Financial Times, London

Foreign Broadcast Information Service (FBIS)

Indian Express, Bombay

Jang (Urdu Language Daily), Lahore

Japan Economic Newswire

Keesing’s contemporary Archives

Morning News, Karachi

National Archives, The Nawa-e-Waqt (Urdu Language Daily), Lahore

New York Times, The New York

Nucleonic Week, New York

Pakistan News

Pakistan Times, Lahore

Pamir Times

People’s Daily (both translated and online English version), Beijing

Press trust of India,

The Times of India,

The Tribune, The United Press international

224

Voice of America, Washington

Washington post, The Washington

Xinhua

Xinhua general News Service

Xinhua General Overseas News Services

Interviewees (Affiliations at the time of interview)

Acharya, Arabinda. Research fellow, S.Rajartnam School of international Studies, Nanyang Technological University, Singapore, February 2011.

Bajpai, Kanti. Visiting Professor, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore, February 2011.

Basrur, Rajesh M. Professor, S.Rajaratnum School of international Studies,

Nanyang Technological University, Singapore, February 2011. D’souza, Shanthie Mariet. Research Fellow, Institute of South Asian Studies,

National University of Singapore, Februry 2011. Fazal-ur-Rehman. Direstor, China Study Centre, Institute of Strategic Studies, Islamabad, April 2011.

Hussain, Riffat. Chairman, Department of Defence and Strategic Studies,

Quaid-e-Azam University, Islamabad, April 2011.

Masood, Talat, Lt.Gen. (Retired). Islamabad, April 2011.

Muni, S.D. Visiting Reasearch professor, Institute of South Asian Studies,

National University of Singapore, February 2011.

Rahman, Khalid. Director Institute of Policy Studies, Islamabad, April 2011.

225

Rais, Rasool Buksh. Professor, Lahore University of Management Sciences (LUMS), Lahore, April 2011.

Rizvi, Hassan-Askari. Former Professor, Punjab University, Lahore, April 2011.

Rong, Zhou. Bureau Chief, Gangming Daily, Islamabad, April, 2011. Shahab, Mansoor. Abbotabad, April 2011.

Yongian, Zheng. Director, East Asia Institute, National University of Singapore, Singapore, February 2011.

Zaki, Bo. Senior Research Fellow, East Asia Institute, National University of Singapore, Singapore, February 2011.

Shisheng, Hu. Director Asia and oceania studies, China Institute of Contemporary International Relations (CICIR), July 2015.

Aurangzeb Dr, Associate Professor, Pakistan Study Center, University of Peshawar, Khyber Pakhtunkhwa (former NWFP), Peshawar,Pakistan conducted on 6th December 2016.

Hilali Z.A Dr, Chairman, Department of Political Science, University of Peshawar, Khyber Pakhtunkhwa (former NWFP), Peshawar, Pakistan conducted on 7th December 2016.

Sarwar Adnan Dr, Chairman, Department of International Relations, University of Peshawar, Khyber Pakhtunkhwa (former NWFP),

Peshawar, Pakistan conducted on 6th December 2016.

Web Sites http://enwikipedia/org/wiki.special-Economic Zone www.boi.gov.pk www.ezboard.com

Federation of American Scientists

Institute of Asia Pacific Studies

Institute of Peace and Conflict Studies

226

Ministry of Foreign Affairs of the Islamic Republic of Pakistan

Ministry of Foreign Affairs of the People’s Republic of China

Pak Akhbar

Pakistan Aeronautical Complex

227