Economic investment by Chinese imperialists in Pakistan rises to $15 billion a year

The Chinese imperialists financed this deepwater port at Gwadar in Baluchistan province. The port is just 180 nautical miles from the Strait of Hormuz through which 40% of all globally traded oil is shipped.

[This article describes China’s growing economic stake in Pakistan. It also states that “in the second half of next year, American aid packages, in the wake of the beginning of the US troop drawdown in Afghanistan, will be reduced or even stopped,” and thus Pakistan is using China as a “hedge.” In reality, the US military is not leaving Afghanistan any time soon, and US economic and military aid to Pakistan will increase in order to prop up the economy and pressure the Pakistani government to undertake more aggressive military action against Taliban bases. Thus, Pakistan will continue to be heavily dependent on the US imperialists, with Chinese investments playing a secondary economic role.–Frontlines ed.]

Pakistan heads down China road

By Syed Saleem Shahzad, Asia Times

ISLAMABAD – Pakistani President Asif Ali Zardari has visited China on several occasions since taking office in September 2008, but these visits have been more ceremonial than of substance, in part because his Washington-backed government had gravitated so close to the United States orbit that even the Chinese envoy in Islamabad publicly complained.

The Pakistani military establishment’s pro-China lobby, highly influenced by now retired General Tariq Majeed, frowned on this tilt towards the US, and was especially upset that the Americans were allowed to establsh a naval base in Ormara in Balochistan province, and that US defense contractors were given a free rein in the country.

However, the post-Pervez Musharraf-era army was weak and didn’t have much choice except to turn a blind eye. This situation continued until 2009, by which time the army had regained its influence in the corridors of power and had begun to prevail over the country’s decision-making process.

Hence, Zardari’s scheduled visit to China on November 11 takes on a special significance. Notably, he has not sought the counsel of his pro-US envoy in Washington, Husain Haqqani, who has consistently advised Zardari to keep his distance from Beijing. Instead, the president on Monday held a long meeting with Chief of Army Staff General Ashfaq Parvez Kiani. Zardari will attend the opening ceremony of the 16th Asian Games in Guangzhou, as well as meet with his counterpart Hu Jintao and senior officials.

On the surface, the leaders will discuss the Washington-opposed plan for a fifth Chinese-built nuclear reactor in Pakistan. However, the underlying emphasis will be on new moves on the grand chessboard of South Asia.

“This is a time of strategic uncertainty,” a senior Pakistani strategic expert told Asia Times Online on the condition of anonymity. “Although there is a strategic alliance between the US and Pakistan, the recent visit by United States President Barack Obama to India, which aimed to benefit the American economy, was revealing of how economic and strategic ties between India and American will be in the future: when push comes to shove, the Americans will stand with India, not with Pakistan.”

This does not mean that Pakistan, guided by the military, is instantly going to fall into China’s arms and abandon the US, but it is certainly considering adjusting its current alignments.

“While the US has provided all sorts of financial and economic assistance to Pakistan in return for its services in providing NATO [North Atlantic Treaty Organization] a passage to Afghanistan and for fighting militancy in the tribal areas, America didn’t support Pakistan in regional conflicts with India,” the expert said.

“The US intervened to help resolve disputes between India and Pakistan, but in the end the formulas that emerged from Washington were aimed at creating a situation for dialogue and engagement – trade relations without any resolution of the Kashmir dispute.

The only [US] goal was that Pakistan-India trade would resume and that would give the Americans a corridor from India into Afghanistan, and finally that dispensation would take India, geographically, into America’s strategic loop in South Asia and facilitate India’s role to work as an American strategic partner in Afghanistan and all the way up to Central Asia,” the expert said.

A changing world

From January to November 5 this year, there were 15 major militant attacks in Pakistan, a dramatic drop from 209 incidents in the same period of the previous year. According to the Canadian Press, the chronology of events shows that the first half of the year was marked by a visibly anti-state insurgency, as was the case in previous years. The frequency of attacks and the dynamics of conflict visibly changed after September [1].

Only two major attacks have occurred since then. These included suicide bomber strikes against a Sunni mosque in Darra Adam Khel in northwestern Pakistan on November 5, in which at least 67 people were killed during Friday prayers. There was also a Taliban suicide attack on a Shi’ite procession that killed 65 people in the southwestern city of Quetta on September 1, beside two other minor incidents against shrines in Karachi and Pakpattan.

This indicates that from September the violence become sectarian, or centered on tribal disputes. The attacks by the Taliban and al-Qaeda that played havoc in Pakistan in 2009 have virtually come to a halt.

Asia Times Online has documented the development of ceasefire initiatives between Pakistan and the militants (See Vultures are circling in Pakistan September 28, 2010). These were brokered with various main groups and at present only fringe groups like the Lashkar-e-Jhangvi are left to carry out attacks, and even these are sectarian in nature.

On the other hand, attacks against Afghanistan-bound NATO supply convoys in Pakistan have increased dramatically, to the extent that they have become almost daily.

The “understanding” between the security forces and militants has reached the stage where militants have pledged they will release all prominent prisoners without demanding a high price. These include former Inter-Services Intelligence official retired Colonel Ameer Sultan alias Imam (known as the “Father of the Taliban”) and Aamir Malik, the son-in-law of former chairman of the Joint Chiefs of Staff Committee, retired General Tariq Majeed.

During Pakistan’s recent strategic dialogue with the US in Washington, Islamabad was directly urged to come out with a comprehensive action plan against the powerful Haqqani network in the North Waziristan tribal area. The network is a key player in the Taliban-led insurgency across the border in Afghanistan.

However, army chief Kiani is a fervent believer in dialogue with the network and sees it as a guarantee for peace in the future. The Americans have tried their level-best to reach out to the Haqqanis – Jalaluddin and his sons Sirajuddin and Naseeruddin – and the Taliban, but their talks to start talks have collapsed. This has been confirmed by Saudi and other officials involved in the process. Asia Times Online was the first publication to break the news of the failure, (See Taliban peace talks come to a haltOctober 30, 2010.)

Washington is still pressing Pakistan, though, to mount operations in North Waziristan, and is even prepared to use a stick if necessary. This could be done through international institutions in which the US has influence, such as the International Monetary Fund (IMF), the World Bank, the Asia Development Bank and the United States Agency for International Development.

The IMF’s assistant director for the Middle East and Central Asia Department, Adnan Mazarie, recently warned that if these bodies stopped their credit lines to Pakistan, it would go into default. The IMF is now warning that if Pakistan does not implement a “credible and irreversible plan to implement power sector reforms”, aid will be cut off.

China means business

Last Sunday, Pakistan’s Daily Dawn reported that Pakistan had set aside all competitive international bidding for the induction of power plants in the country and had decided to award a contract, without bidding, to a Chinese company for the construction of 1,100 megawatt hydropower project in Pakistan-administered Kashmir, at an estimated cost of US$2.2 billion.

Approximately 10,000 Chinese workers are engaged in 120 projects in Pakistan and total Chinese investment – which includes heavy engineering, power generation, mining and telecommunications – stood at $15 billion at the end of this year, up from $4 billion in 2007.

One of the most significant joint development projects of recent years is the major port complex at the naval base of Gwadar in Balochistan province. The complex, inaugurated in December 2008 and now fully operational, provides a deep-sea port, warehouses and industrial facilities for more than 20 countries.

China provided much of the technical assistance and 80% of the funds for the construction of the port. In return for providing most of the labor and capital, China gains strategic access to the Persian Gulf: the port is just 180 nautical miles from the Strait of Hormuz through which 40% of all globally traded oil is shipped.

This enables China to diversify and secure its crude oil import routes and provides the landlocked and oil- and natural gas-rich Xinjiang province with access to the Arabian Sea. With China formally in command of Gwadar port operations, it would, along with Pakistan, gain an important regional and strategic advantage.

Pakistan’s marriage of convenience with the US that began after September 11, 2001, with the US-led invasion of Afghanistan and the launch of the “war on terror”, has endured some rocky times.

Informed opinion in strategic quarters in Pakistan is that in the second half of next year, American aid packages, in the wake of the beginning of the US troop drawdown in Afghanistan, will be reduced or even stopped, and the US’s relations with India will bloom.

Pakistan wants to be ready for such a development, and is using China as a hedge.


1. On August 23, three bomb attacks in northwest Pakistan kill at least 36. On July 9, a pair of suicide bombers kills 102 people and wounds 168 in the Mohmand tribal region. On July 2, twin suicide bombers attack Pakistan’s most revered Sufi shrine in Lahore, killing 47 people and wounding 180. On May 29, two teams of seven militants attack two mosques of the Ahmadi minority sect in Lahore, killing 97. On April 19, a suicide bomber apparently targeting police at a conservative Islamic party rally in Peshawar kills 23. On April 18, two burqa-clad suicide bombers attack refugees lined up to register for food in Kohat district in the northwest, killing 41. On April 5, a suicide bomber attacks a rally of an anti-Taliban political party in Lower Dir district, killing 45. On March 13, two suicide bombers targeting army vehicles in Lahore kill more than 55 and wound more than 100. On February 18, a bomb tears through a mosque in the Khyber tribal region, killing 29 people and wounding 50 more. On February 5, two bombs targeting the Shi’ite Muslim minority sect in Karachi kill 33 and wound 176 and on January 1 a suicide bomber drives a truckload of explosives into a volleyball field in Lakki Marwat district, killing at least 97 people.

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