Prime Minister Imran Khan is in China where he will also attend the opening ceremony of the Winter Olympics boycotted by the USA and its western allies. This would be a show of solidarity with China, Pakistan’s all-weather friend. The visit is also important as it marks the culmination of celebrations of the 70th anniversary of diplomatic relations between Pakistan and China. During his four-day visit Mr Khan will hold bilateral meetings with President Xi Jinping and Premier Li Keqiang. The two sides are expected to review the entire gamut of bilateral relations, with particular focus on stronger trade, economic cooperation and fast-tracking the CPEC.
Media reports tell of Islamabad seeking a $3 billion loan to stabilize its dwindling foreign exchange reserves. China has already placed around $11 billion with Pakistan in the shape of commercial loans and foreign exchange reserves support initiatives, including $4 billion in SAFE deposits. Federal Minister Asad Umar claims that unlike the past when Pakistan would only talk about Pak-Sino friendship being higher than the Himalayas and sweeter than honey, the PTI government is going to China prepared with a structured approach. Mr Khan’s rising tensions with the opposition, his recent difficulties with the establishment, the deteriorating state of the economy and his diving popularity with the electorate are factors which will figure in Beijing’s evaluation of his government’s request for more Chinese financial assistance and rejuvenated CPEC funding.
Pakistan also seeks an investment bonanza in half a dozen sectors. But investment is like the proverbial wind which ‘bloweth where it listeth’. The government is expected to tell the Chinese companies that it provided access to trade routes to the Middle East, Africa and the rest of the world– offering greater incentive in the shape of a reduction in freight cost. Seasoned Chinese investors do not need lectures from Pakistani officials when they know that Rs 230 billion in payments to Chinese power plants are still pending and the government is yet to open a revolving fund with deposits equal to 21 percent of power generation cost. Chinese investors also remain reluctant to bring in big money to Pakistan because of Islamabad’s inconsistent fiscal and energy policies, missing agreed deadlines to resolve issues and terrorist threats to Chinese in Pakistan. Unless Chinese strategic approach results in accommodating Pakistan’s economic and finance deals, the so called structured approach may not work alone.
