All-weather friends

President Hu's visit to Islamabad adds an economic context to China-Pakistan relations.

NIRUPAMA SUBRAMANIAN in Islamabad

WHEN Premier Wen Jiabao visited Pakistan in 2005, the welcome given to him was so overwhelming that a Chinese journalist based in Islamabad commented that he had not seen such a "people's welcome" even in China. Pakistan managed the feat of putting up an even more overwhelming welcome, if such a thing was possible, for President Hu Jintao when he arrived in Islamabad on November 23, directly after his India visit.

Always clean, Islamabad was spruced up even better for the visit. Larger-than-life portraits of the visiting President flanked by those of Pakistan President Pervez Musharraf and Prime Minister Shaukat Aziz hung at important intersections. Constitution Avenue, along which are located the country's most important buildings, including the President's House and the Prime Minister's Office, sparkled with special lighting. The state-run Pakistan Television ran wall-to-wall programming on the visit, including live coverage of several events.

Political observers say the only other international dignitaries to get such a warm welcome are top Saudi leaders. A 21-gun salute, brass bands playing the national anthems of both countries and the entire Cabinet and even members of the diplomatic community greeted Hu when he landed at the Chaklala air base in Rawalpindi, People lined the streets to watch his motorcade and some even showered flower petals as it swept past. The icing on the cake came later when Pakistan gave Hu its highest civilian award, the Nishan-e-Pakistan, for his "visionary leadership and splendid contribution in charting the course of China-Pakistan relations in the 21st century".

Pakistan takes its relationship with China very seriously. This year, the two countries are commemorating the 55th anniversary of their diplomatic relations. Musharraf visited China twice this year, once in February and then again in June, when he attended the Shanghai Cooperation Organisation meeting as an observer, along with leaders of India and Iran. There has been no dearth of exchange of delegations between the two countries in 2006. Hu's visit was described as the "high point" of the commemoration.

Since 1965, when China backed Pakistan in the war against India, if there is one country that Pakistanis have complete faith in, it is China. Pakistan has been China's invaluable ally on the international stage and a bridge to other Muslim countries, and, as Hu acknowledged in Islamabad, it has acted as a facilitator in the mending of ties between Beijing and Washington. It has been a willing market for Chinese goods and has cooperated on issues of concern to China. A border issue was resolved in 1963 when Pakistan ceded a portion of Pakistan-Occupied Kashmir in the Aksai Chin area to China. More recently, Pakistan clamped down on the Uighyur separatists operating on its territory bordering China's Xinjiang province.

Given all this, it is not surprising that when the two sides speak about their relations, they do so always with a poetic and hyperbolic flourish, such as "higher than the Himalayas, deeper than the Indian Ocean", to which now Hu has made a further contribution with "sweeter than honey". As Hu said, the two countries have nurtured their relations through all manner of changes in the international arena to remain "good neighbours, close friends, trusted partners and dear brothers", symbolising "an example of harmonious coexistence between countries of different civilisations".

But recent years have seen China forge new partnerships, and Pakistan has been conscious of the fact that its "all-weather friend" has been rapidly improving relations with India. For Pakistan, the first casualty of this new partnership was the support from Beijing on the Kashmir issue. Since the 1990s, China has adopted a neutral stand on this issue, which has helped to inject some realism into its long-standing ties with Pakistan.

Strategic analysts in Pakistan no longer think of the growing China-India partnership as a zero sum game with Islamabad. Some consider it a strategy by China to prevent India from being coopted totally by the United States. But most of them have been urging their government to add more content to its relations with a China that no longer wants to indulge its allies with handouts but is looking for beneficial economic alliances. The Musharraf regime is in agreement. At a joint press conference with the visiting Chinese leader, Musharraf remarked that the "21st century belongs to geo-economics", and predicted that the future of China-Pakistan relations was in strengthening "economic bonds".

"Trade, joint ventures and investment are the areas we need to focus fully so that our relationship remains long-term because this will bind us permanently and will be strength for political and diplomatic association and cooperation which at present [is] excellent. But [these bonds] will be cemented through economic relations," he said.

For now, Pakistan seems to have defined those economic relations as providing a market for China. During Hu's visit, the two countries took a major step in that direction by signing a Free Trade Agreement (FTA). At present, Pakistan produces nothing that China does not make cheaper or better, including textiles. Although bilateral trade is to the tune of $4.5 billion, Pakistan is labouring under a huge trade imbalance. Pakistan says the FTA will treble bilateral trade in five years, but what that means for the immediate term is that Chinese goods will have freer and easier access to Pakistani markets than before.

Ayesha Siddiqa, who writes on defence and strategic affairs, says Islamabad has resisted domestic pressures against the FTA because it feels that this is the price to pay in order to remain attractive to Beijing. But eventually Pakistan also hopes to attract Chinese capital into joint ventures and to bring some of its manufacturing to this country. Hu signalled a willingness to do that when he inaugurated the Pakistan Haier-Ruba Economic Zone near Lahore. The two countries have signed a five-year plan for economic cooperation, under which they will explore opportunities for investment.

Musharraf has spoken many times about building a "trade and energy corridor" to China from the Gwadar port in Balochistan, which is located near the Hormuz Straits, also known as the world's "oil straits". Pakistan reckons that instead of taking its oil supplies all the way by sea through the Malacca Straits, China would benefit by an overland route through Pakistan. Further, by developing special economic zones in Gwadar, Pakistan can attract China to set up export manufacturing units there so that products can be shipped out in no time.

China is noticeably quiet on this idea, even though it has sunk a lot of money in the Gwadar port project - nearly $200 million in the first phase alone - and is helping in the second phase too. During Hu's visit, an agreement was signed between the two countries for repairing and widening the Karakoram Highway, the overland link to China. It is too early to predict when or whether the "trade and energy corridor" will materialise, considering that it has many hurdles to cross.

Aside from the trade and economic agreements, China, an important supplier of weapons to Pakistan, has also tied up a "long-term" partnership for developing an Airborne Warning and Control System (AWACS). While China is still developing its AWACS technology, Pakistan recently concluded a $1.2 billion deal with Sweden for the purchase of these systems.

Analysts say the deal is important because China stands to benefit from Pakistan's technical inputs in the improvement of its weapons designs and point to earlier collaborations such as the JF-17 Thunder aircraft. This China-manufactured aircraft for the Pakistan Air Force is built on the old F-7 design.

However, a much-awaited agreement on Chinese assistance to build nuclear reactors in Pakistan did not materialise. Ever since India and the U.S. signed their nuclear cooperation pact, Pakistan has wanted a similar deal with Washington. But the Bush administration has repeatedly rejected this proposition. Islamabad's response has been to look to Beijing for assistance.

Pakistan says nuclear power is the quickest way to meet its growing energy needs. It has signed a nuclear energy cooperation pact with China for two 300 MWe nuclear reactors - Chashma I and Chashma II, which is under construction. After Musharraf's June visit to China, there was intense media speculation in Pakistan that he had tied up a new deal for six additional reactors.

Contrary to expectations, Hu's visit brought no announcement on this. Pakistan has not displayed any disappointment that the deal did not come through. The newspapers have been quiet on the issue. Privately, some analysts say the deal is still under negotiation; others say that the Chinese do not want publicity for fear of attracting adverse international attention. For all concerned Pakistanis, the silver lining and the last word on the issue is the fact that Hu said, "[I]n the future, we will continue to carry out [nuclear energy] cooperation [with Pakistan]".

More important, they say, is his statement that China shall continue to view its relations with Pakistan from a "strategic and long-term perspective".

"We are ready to work together with Pakistan to raise our strategic partnership to new levels," Hu said. For Pakistan, that was the most significant statement of Hu's visit for the reassurance implicit in it that unlike the U.S., China will not exclude Pakistan as it goes about reshaping the geopolitics of Asia.

But, according to Siddiqa, Hu also conveyed another important message to Islamabad when he praised the Pakistan-India peace dialogue and said his country was committed to a "constructive role". China has new priorities and an important stake in regional stability; it will not take on India over Kashmir, and Pakistan must play its part to maintain this stability or it will find itself left out.