CHINA-PAK ECONOMIC TRADE CORRIDOR

CHINA-PAK ECONOMIC TRADE CORRIDOR

Abstract: The diplomatic relations between China and Pakistan were established in May 1951. The motto of Sino-Pak relation is that “our friendship is deeper than the oceans and higher than the mountain”1. China and Pakistan have maintained cordial relations for the last fifty-eight years. China’s spectacular rise as an economic giant and Pakistan’s downturn in the wake of the global war on terror provides hilarious complementarities for the future direction of bilateral cooperation2. A revisit of their relationship at this point would indeed offer an opportunity to revamp Pakistan’s economic development when Pakistan is going through the worst energy crisis, and its economy is in need of a revamp, improvement in its strategic relations with China can act as a breakthrough for Pakistan in the Shape of Pak-China Economic Trade Corridor.

Introduction: Pakistan and China ‘THE GREAT FRIENDS’ have a long past of cooperation with each other. China is a Communist country but although both have a severe sense of deep, sweet wishes for one and other. In 1963, Pakistan and China signed an agreement for settling of border issues and linked China’s province Xinjiang to the northern areas of Pakistan. The alterations in the international system positively affected Sino-Pak relations. The rigid relations between China and India on Tibet issue accelerated the war. This warfare, acts as a cause of cooperation between Pakistan and China to unite against the menace of India. China provided diplomatic and political backing to Pakistan against Pak-India war in 19651. China also wrote a rebuke note to India on Kashmir war. The leaders from both the countries sojourned each other and trussed mutual relationships. In 1950, the Treaty of Friendship and Cooperation was contracted between Pakistan and Chins. Pakistan always brooks against the regional hegemony against India, and thus executed China’s South Asia policy. Pakistan also is in the involution of China from challenging India against regional hegemony. China desires to advance economically. On 24 November 2006, Free Trade agreement was ratified between Pakistan and China2. The tariff was made to annihilate in agreement. They both had protruded free trade. China is recrudescing and making advances day by day, but Pakistan is facing trade deficit. Trade was anticipated to stumble 15 billion US dollars by 20143.Pakistan is proving hard. Pakistan and China are reckoned as all-weather friends. China is heightening economically against US hegemony. US is envisioned by Islamabad as distrust, and China as reliable. Both China and Pakistan have same foe. Instability of Pakistan is the only bone of contention between them because Chinese nationals are killed in Pakistan. Both are of reciprocal concept that external people are included in this to promote terrorism and create impedance between Sino-Pak friendships. China needs a stable Pakistan to scramble and develop its economy, China is 1

Mohan Guruswamy, Claws Journal, 2010, Pakistan-China Relations Higher than the s Mountains, Deeper than the Oceans, pp1 2

Michael Beckley, Yale Journal of International Affairs, 2012, China and Pakistan: FairWeather Friends, pp 8-25

boosting economically, but Pakistan is finding its gateway to rise in the economy. The instability and insecurity of Pakistan is a question against Chinese economic increment in this state. China and Pakistan are efficaciously working on the development of Gwadar port as it is the informant of Chinese economic well-being. The relationship between Pakistan and China basically become potent when Pakistan gave the authority of Gwadar Port to China from Singapore4. The KKH is being upgraded by China and Pakistan to make more nexuses for increasing transportation, trade and relations5. Pakistan and China view their political, economic and military cooperation as an instrument. The various investments by China in many zones have helped her to become selfreliant, but this has not enhanced Pakistan’s exporting position. At this time, Pakistan is confronting grievous energy and economic crisis, and melioration in strategic relations between Pakistan and China can execute in the development of Pakistan.

Discussion History of Sino-Pak Trade: Pakistan-China friendship is one shining lamp that has weathered all storms and continues to be an anchor of stability in a world buffeted by headwinds of one kind or the other. The establishment of diplomatic ties between the two countries in 1950`s, China and Pakistan has broken an all-season friendship that is based on equality, brotherhood and overall cooperation6. In past years, the two nations have carried out multidimensional cooperation in diverse areas. Despite the unstable international situation, the ChinaPakistan friendship has stayed solid and vivacious. Diminution in China-India relations, increased in the 1962 war, which provided more opportunities for Sino-Pak cooperation7. The border agreement was signed between them, and they ratified their first trade agreement in 19638. This was accompanied by the building of road from Chinese region Xinjiang to Pakistan’s northern areas. Afterwards that, China provided economic and political assistance to Pakistan during 1965 and 1971 wars9. This military assistance in 1982, further led to the foundation of the Joint Committee for Economy, Trade and Technology10. This availed China to sale M-11 missiles to Pakistan11. The corridor from Pakistan to Xinjiang passed to Gwadar Port, also increased trade. In November 2003, with the signing of the bilateral Preferential Trade Agreement (PTA), Pakistan and China engaged economically in actuality12. That Pak-China Free Trade Agreement covers trade in commodities and investment. More than three quarters of Pakistan’s exports to China are raw material in which cotton is accounting for 70% of commodities13. Pakistan was the only country at that time, which had the module of the Investment in the FTAs being commenced and instigated by China. China and Pakistan have bilateral economic cooperation in the conformation of the Economic Cooperation Group, Joint Economic Commission, Joint Investment Company and Joint Energy Working Group and so on Agreement on Expanding and Deepening Bilateral Economic and Trade Cooperation (February 2006), Free Trade Agreement (November 2006) and the extended Joint Five Year Economic Plan are also increasing the economic relation between China and Pakistan14. Till 2010, the target of the FTA was not accomplished, but in the next coming year bilateral trade increased. In 2006, China became the third biggest trading companion of Pakistan, accounting for 9.8% of

Pakistan’s import15. In comparison, Pakistan became 54th largest trading partner of China. Trade volume between China and Pakistan exceeded US$12 billion, with 48% augmentation in Pakistani export in 201216. In 2013, China became 2nd largest trading partner of Pakistan. Present, In South Asia, Pakistan is the only country with a free trade Agreement and currency swap agreement with China. For increasing the Trade, on 7 May 2013 People’s Bank of China (PBOC) and State Bank of Pakistan agreed on a currency swap agreement (CSA) which allows the both countries to trade directly without using US dollars17. In the back, Pakistan had also provided China with its first Overseas Economic and Trade Cooperation Area (OETCA) – the Haier- Ruba Economic Zone (HRZ). About 13000 Chinese people and more than 120 companies in Pakistan are functioning on energy projects and infrastructures18. On May 2013, the Chinese premier visited Pakistan and both countries concentrated on constructing an economic corridor19. In late years, land trade between Pakistan and China has developed progressively, but the percentage in growth of Pakistani exports on a yearly basis has been waning. The Khunjerab pass which connects the Pakistan with China is built on the Chinese side but not the Pakistani position. Karakoram Highway also fortified economic relations between China and Pakistan. China has initiated 22 major projects in Pakistan such as heavy electrical complex, heavy mechanical complex, tank rebuilding factory, automobile instruments, and aircraft rebuilding factory, Gwadar port, and Karakoram Highway and nuclear power plants 20. Recent years have witnessed a frequent visits between the leaderships of the two countries, further promoting cooperation.

Sino-Pak Relations: 63 years of Pak-China relation has been passed with the ups and downs in it. China and Pakistan’s cordial relations are based on mutual interest. Pakistan’s first endeavor after recognizing China in which Pakistan sustenance and speak in the indulgence of China was appeared in September 1950 when Pakistan joined India for the seating of China in UN21. Pakistan and China have explicated friendly relations and these relations are increasing day by day. Pakistan was the first, but the second commonwealth country to recognize the newly independent state, the Peoples Republic of China (PRC) on 5th February, 1950. Pakistan and China established their diplomatic relations on 21st May, 195122. When both countries induced their relations an odd thing happened. Both nations were completely dissimilar in their religious belief, culture and history, but this matter did not affect their dealings. During the period of the first decade of their ties, the relationship between China and Pakistan became to develop slowly because of their pursuits in different blocs. Both countries became members of different blocs during the cold war, and both were having unlike ideologies23. During the cold war China endured the Soviet Union because of the communist bloc, but Pakistan and United States (capitalist bloc) became close to each other for the intention of security. Although, Pakistan did not conjoin any treaty or accord with USA against China, but China was not felicitous with the behavior of Pakistan. In malice of the contradictions, both maintained and attained friendly ties with each other. China and Pakistan relations were positively affected by shifts in the international system. The warfare between China and India on Tibet issue caused both countries, China and Pakistan unite together for common menace24. This caused both the countries to come

tight to each other, and to clarify their misconceptions. The first invitation was given by Zou En Lai to Muhammad Ali Bogra in Pakistan to see China25. Muhammad Ali Bogra unheeded that invitation. Afterwards that, China invited Choudhry Muhammad Ali to visit China, but he did not visit due to some domestic troubles26. After that in 1956, Hussain Shaheed Suharawardy visited China. The chief of China visited Pakistan the same year in December. On 23rd October, 1956 the joint statement between both the countries furthered them to develop commercial and cultural relations27. The mutual interest between both countries was so vast that the change in regime and leadership did not bear on their relations. Thither are many cases of relation between both the counties. Firstly, China is counted as all-weather friend of Pakistan. Secondly, China is providing self-reliance to Pakistan by transferring of technology. Thirdly, China and Pakistan both have same counterparts, i.e. India, and fourthly, both are running together in retort terrorism efforts28.In the 1960s, Pakistan and China come closer to each other due to many dynamics such as New Delhi’s refusal to Pakistan’s proposal for a joint defense of a subcontinent, Pakistan’s disappointment with its western allies, and the US backing for India against China. Over the two years, when Pakistan proposed negotiation on demarcating the boundary, in March 1962 Beijing showed willingness to set the process in motion. On March 2, 1963 boundary agreement was ratified by Pakistan and China29. After signing the agreement Z.A Bhutto labeled the accord as a symbol of friendship and mutual cooperation30. With the developing deep relations, China began to support Pakistan in the issue of Jammu Kashmir. During Pak-Indian War (1965), China supported Pakistan politically and military31. In 1970s, PTV played a Pak-China friendship song on a daily basis32. In the same way, during the crisis of 1971, China provided political, economic, and moral support to Pakistan to deal with that situation. On the other hand, Pakistan also abetted China in breaking its segregation and building relations with the Muslim World. In the post-Deng period, China adopted neutral response towards Pakistan in Kargil War and Kashmir issue. When India and Pakistan became nuclear powers, by the end of 2001, China stressed both countries to solve Kashmir issue peacefully. Pakistan completed many mega projects with the help of China. Controversies are imposed on both countries by the US Governments like US had imposed sanctions on both China and Pakistan for their alleged relation during mid-1990s33. At that time, Pakistan claimed that China just coveted to help Pakistan and China’s support didn’t make a drastic alteration in its nuclear power. Pakistan and China also signed the Treaty of Friendship and Cooperation and Good Neighborly Relations. Relations of Pak-China and its growth depend on the convergence of their strategic interests 34. The alliance of Pakistan and China converted into a “Friendship deeper than Indian Ocean and taller than Himalayas” with the time35. Scientific and Technological Cooperation between China and Pakistan has been fruitful. Along with the sustained development of their friendly relations, Sino-Pakistani cooperation in science and technology has grown in depth, which developed from individual independent exchanges into inter-governmental cooperation like that of joint committee of science and technology36. Since signing the agreement on cooperation in science and technology in 1976, the Chinese and Pakistani Governments have held several meetings and signed many inter-governmental cooperation progress agreements on science and technology,

Being always friendly to each other, China and Pakistan have kept close contacts in the cultural field37. Since the establishment of Sino-Pakistani diplomatic relations, the two countries have sent cultural delegations and held exhibitions in different areas of both countries. In March 196538, the representatives from the Chinese and Pakistani Governments signed the cultural agreement in Rawalpindi and for the first time inked the plan of annual cultural exchanges for implementation. There have been 9 such plans signed between the two countries. This kind of Cooperations` gives strong support to both countries that both are standing at this highest peak of friendship39.

The Geostrategic Importance of Pakistan: Geostrategic location of Pakistan in this region at this spot is one of the divine factors which provides an edge to it. Pakistan is situated at the juncture of three neighborhoods, Central Asia, South Asia and West Asia40. It likewise provides the shortest route of sea access to Central Asian countries i.e. Kyrgyzstan, Turkmenistan, Uzbekistan and Kazakhstan, instead of West China41. Along one side of Pakistan there are Iran and Afghanistan, which are abundant in energy. As the essence of great powers, Pakistan’s neighbors are China and Russia, which are high on economy. Any alignment with these countries can offer benefit to Pakistan. Pakistan is the junction of many corridors for cooperation between these three regions. Pakistan is a hub and is located in such a geographic position which provides three ports, i.e. Gwadar port, Karachi port and Qasim port, for transportation42. Pakistan’s government mixed Gwadar Port with Pakistan’s province Balochistan, after purchasing the port from the Oman Empire in 195843. Pakistan is situated with landlocked countries which are fertile in resources. For importing of these resources, pipeline is developed in Pakistan. This line is a TAPI (Turkmenistan, Afghanistan, Pakistan and India) 44. Turkmenistan is the richest country in terms of resources in the CARs, so a pipeline link with the countries. Warm waters are not the part of all countries, but Pakistan has warm waters. Along one side of Pakistan there touches the Arabian Sea. Through warm water, trade is possible, and the country does not need to depend on other countries for trade. Pakistan has fertile lands for agriculture. It is situated in the area where there are all four seasons. All types of cultivation are possible. Pakistan’s province Balochistan is rich in minerals and resources45. US is interested in Pakistan because of the new Great Game. As Pakistan is located close to the energy and resources rich countries46, and US is lacking in Energy resources. Pakistan is the major route to the oils and energy resources. That’s why the eyes of several countries, especially Western countries are on Pakistan. China is the emerging super power of the world, but she doesn’t have any portion of hot waters which can be used throughout the whole year. China’s own port of Shanghai is at a distance of 16000 km which consumes too much time and money47. Therefore, Pakistan offers the shortest path for world economic trade to China. With the cooperation of Pakistan, China can engage herself in Afghanistan economize. Pakistan holds the potential to assist the landlocked and neighboring states in the region. Pakistan can be practiced as a “Wildcard” in the future due to varying regional and world dynamics48. With the construction of strategic communication and trade linkages between these three regions, Pakistan becomes an economic hub by giving a boost to inter regional economic trade49. Baluchistan has estimated reserves of 6 billion barrels of oil and

29 trillion cubic feet of natural gas50. With the membership and association of Pakistan with regional systems such as SAARC, ECO and SCO, Pakistan attains unique position to ease interregional cooperation51. Pakistan is a junction for multiple corridors of cooperation between this region such as energy, trade, tourism and transportation. Central Asia and Pakistan are central for world’s earliest civilization. Pakistan offers three major sea ports along the Arabian Sea like Qasim Port, Karachi Port, and Gwadar Port. If someone wants to access to Afghanistan and Central Asia for trade or any purpose, either go through Pakistan, China, Iran or Russia 52. For development of this trade corridor and transition of both Pak-China relation, position of Pakistan is very strong regionally for trade to international market53. It is indispensable with the policy makers of Pakistan to pick the right opportunity through professional precision by changing over the potentials of Pak-China corridor into substantial and sustainable socio-political and economic development54. This Pak-China Trade Corridor will be a corridor of opportunity for Pakistan to build herself a fantastic distributor of Asia.

Pak-China Economic Corridor: Over the past 62 years, Since the institution of diplomatic relations, the seed of China-Pakistan Friendship sowed by Mao Zedong, Zhou Enlai, Zulfikar Ali Bhutto And other leaders of the senior generation, has grown into a towering tree thanks to tendering by several generations of Chinese And Pakistanis55. After these old germinating seeds, both countries tries to strong their relations, but re-erected and massaged in General Pervez Musharraf’s era and park-China trade corridor idea was also conceived in a General`s period of governance56. Much attention was paid for this plan, but initially project was given to the Singapore Port Authority. Recently work has given to a Chinese company for the development of Gwadar Port and Pak-China trade corridor. Premier Li Keqiang was the first one from the Chinese side which started his work on development after the support of the President of China XI Jinping, and Pakistan President Asif Ali Zardari, and now sitting Prime Minister of Pakistan Mian Muhammad Nawaz Shareef is backing this development of trade and economic corridor 57. This long term strategic plan holds a multibillion dollar plan with a time frame of extending up to almost 2020-202558. It will connect Kashgar to Gwadar through the new and existing road networks of Indus and Karakoram, and further connecting it across the border with Central Asian states providing the cost and time efficient chain of supply for trade within the region.59Up to 3 billion people of the region are expected to earn benefits from this connectivity, it will focus broadly on economic and technical cooperation, trade linkages, development of industrial zones, construction of road and rail links, oil and gas pipeline and fiber optic cable projects, increasing social connection among people, exchange of political and cultural ideas and exchanges of expertise between government organizations and the economic benefits that will grow after completion of the project. The short term goals of this project are named an “Early Harvest” goals, and targeted as four to five year timeline, and the mega one will need twelve to fifteen years for completion60. Early Harvest goals are specific, and important in nature like; construction of rail track from Havailian to Abbottabad, to Xinjiang, construction of six line motorway between Karachi, and Lahore, Upgrading, and repairing of coastal Highway from Gwadar to Karachi, Construction of Airport at Gwadar, and mega transportation stand for shifting of goods to the western province of China from Gwadar through coastal Highway, and a motorway. In short, many projects are in progress worth billion dollars for the progressive development of economic, and trade functions in Pakistan with the cooperation of the Chinese government61. Joint economic commission of Sino-Pak is supervising these projects to complete

them on time and to transfer the essential benefits to the people of both countries in many sectors like industry, agriculture, health, energy, education and transport62. Mainly, the road from Gilgit to Khunjrab is the part on which trading transport wheel their vehicles and that road is named as the Silk Road, it is in a very poor and struggling situation which is very dangerous for loaded vehicles, and Chinese are building that part of the Silk road for smooth and curious travelling which is mainly hundreds kilometers, and reconstructing some kilometers which is connecting Karakorum Highway and leads to Khunjrab pass63. This road leads to open new trade avenues in Pakistan from central Asia and increases Chinese investment in this region. A revamp of the economic system will also recreate a social fabric of the nation64. China is much more master than Pakistan, and showed in 70`s how they she transformed eastern region of China into a new gloom, and era of developments covering all aspects; from engineering to technical expertise, and managerial expertise to social, and economic growth65. An eastern region of China immensely developed, and leaves a sense of loss, and disparity in the western part of China especially in Xinjiang province. Thus, the Chinese regime is paying double focus, and attention on western region, and Xinjiang (Kashgar). The program is to transform the western region as like eastern region, through the evolution of special economic zones at Kashgar and Horgus, and to make Kashgar regional Centre for economic action- a Centre for trade for regional, and international goods as easily as a logistic hub, by elevating the existing route network in the form of Silk route66. This would open new ends of the trade for both Pakistan and China, in the shape of Central Asian trade, this results fortress for economic growth, and will make for prosperity for under developing grounds of Xinjiang region, and itself in Pakistan as well. Pakistan’s importance in the development of Xinjiang province of China is really crucial, and this is time to test the remarkable relation which exists between both neighboring countries, both these countries are enormously important facilitating factors in establishing the special economic zones67. This project`s position is very unique according to the geography of the area. Connectivity through road network, rivers, and railways is perceived as an economic demand for developing service industries in both nations. A recent rapid increase in the trade relations between both nations has been gradually amounting higher ever; by the close of 2013 imports and exports to China were 9.2 billion dollars and 3.14 billion dollars respectively. Imports include transport equipment, Machinery, and applied bits and parts So, these are signs of transformation of friendly relations to the economic cooperation, Export items are as well ranging from textile articles, other exports such as metals, chemicals, vegetable products and base metals68. Persian Gulf states facilitate China`s 60% energy needs The growths of this corridor will cut back the distance for China to Persian Gulfs by several thousand kilometers 69. An amendment has raised in Chinese law about the corridor expansion and building and low interest loan policies are also introduced for businessmen who are interested in investment in this Master plan.

Below are the two Routes of Chinese Shipping. First one is Chinese Previous Route and the second one is Chinese Existing Shipping route.

The Global Trade of China – Shipping Route Existing: Europe – western China (19132 miles). Distance: Middle East -- Western China (12537 miles).

Long Distance- High Cost. The Global Trade of China--- Exiting Shipping Route. Distance: Europe---Western China (9535 Miles)

Pakistan------China

Saved: Middle East ---Western China (10242)

Economic corridor

Short distance and Low Cost.

Controversy

This is the picture of initial plan that Chinese government made, and gave to Pakistan that we want to made a corridor route like this, The positive aspect of this Structural corridor is that it will engage Balochistan, and the sense of Deprivation, and provincialism will bow down. Another factor of keeping this corridor in mind is that it will help to create industries in Balochistan, and on the route of corridor till Kasghar. Its an opportunity for Balochi People to make their province like Punjab. Balochistan is undeveloped Province of Pakistan like Xinjiang province of China. Pakistani government have to see the depth of this corridor and to learn from past mistakes of previous leader and should follow this path for making Balochistan like Punjab and other provinces of Pakistan. Pakistan have an opportunity to engage Afghanistan, Iran Turkmenistan, and Azerbaijan and will provide new dimensions for Pakistan and China on the name of Trade. It’s a controversy because Pakistan government bypass this Blueprint of Corridor and proposed a new one. Which is enlisted below.

This is the new proposed map of Pak-China Economic Corridor you can see that the whole corridor has changed its whole position you can notice a huge difference in first map this corridor was along Baluchistan and travelled over the upper boundary of Punjab and then after that Enters into Islamabad and after that towards KKH till Kasghar. But know it’s with coastal highway of Makran Cost then travels somewhere in some Parts of Balochistan, and sudden enters into Punjab from KHUZDAR. From this corridor travels within Punjab, and after that Reaches Multan, Lahore and again towards Islamabad. Prime Minister Pakistan approved this map of Pak-China Economic corridor. There is no positive aspect of this map although have many negative aspects like Balochstan will not be developed and sense of Provincialism and deprivation will be strong enough after this step of government that movements of separation of Balochistan will create again a revamp in Balochistan to separate them from Pakistan and it will be the fruit for BLA, RAW and other intelligence agencies which are involved in this separation. Punjab is almost developed province of Pakistan and did not need urgently more industry sector or

Economic Zones but Balochistan need this. This will help Balochi People to get rewards from his corridor and get a fruitful incomes for uneducated youth. Although it’s not confirmed what Chinese and Pakistani Government is thinking ado pot tis corridor making .Corridor developing is not in progress till now only Gwadar Port is in developing mode. KKH (Karakorum Highway), and Its Significance: China is included in those lands of the world that use geography for making decisions for its strategic benefit70. The KKH is 1,300 kilometers long, started from Kashgar in Xinjiang with Hasan Abdal in Islamabad71. The construction of KKH was done by Chinese natives and took about 20 years from 1959 to 1978. For its exertion in construction, is often called world’s eighth wonder72. The name that was first given to it was an Indus Valley road. The construction of KKH was done in two phases: first was overseeing the construction shingled road and second was upgraded it to highway specification73. Pakistan’s President General Zia-ul-Haq and Chinese vice Premier Kang Piao inaugurated this highway. After its completion, the highway was not opened for public for a few years. The KKH is a ‘strategic investment’ by China because it provided the safest and shortest link from its western province to the Arabian Sea. By KKH it takes less than 24 hours to reach Pakistan from the central state of China. KKH passes through disputed and sensitive areas, allowing the militaries of India, Pakistan, China, USSR and Afghanistan to meet within a space. Karakoram National Movement (KNM) and Balawaristan National Front (BNF) claim that to maintain KKH, build energy related mega projects, and extract mineral resources, approximately 5,000 Chinese soldiers and 10,000 Pakistani soldiers are present in Gilgit-Baltistan74. In July 2010, for upgrading and widening Karakoram Highway China and Pakistan signed an accord. In January 2010, due to land sliding near Atta bad village in Gilgit-Baltistan, damaged 19km of the Karakoram Highway75. For recuperating that damage and again increasing the regional trade, China and Pakistan signed an agreement worth 275$ million in December 201076. These further results in the future expansion of KKH (Karakorum Highway). KKH will connect this route to Indus Highway, boosting economic activity and creating economic integration of trade in the area. AKKH enables Pakistan to stay in contact with northeastern valleys of NWFP and GilgitBaltistan to counter the Afghanistan’s claim over NWFP and India’s claim over Gilgit-Baltistan. Extension of KKH relieved the geostrategic pressure that Pakistan has received since 1947. According to the 1966 Sino-Pak accord, Pakistan is able to acquire access to Chinese weapons through KKH77. Pakistan also used KKH for supplying high-tech weapons in which unexploded American missile is included, from Afghan jihad theatre in China for reverse engineering. KKH boosted the economy of Pakistan by increasing employment and tourism. KKH also provides more dependable and the shortest path to the hydrocarbon-rich Central Asian states, landlocked and the Indian Ocean and the Arabian Sea through Pakistan. In May200578, a quadrilateral trade agreement was signed between China, Kazakhstan, Pakistan and Kyrgyzstan. This agreement boosted the regional trade by using Karakoram highway. This Highway is the main windpipe of Pak-China friendship, and as well as for economic development, and trade corridor. Without

KKH this trade is nothing, Chinese and Pakistani government is working on strengthening this road of friendship and trade cooperation in a shape of FTA (free trade agreement)79and trade corridor .

Gwadar Port, Balochistan: Gwadar Port is located in Gwadar a city in Pakistan’s province Balochistan80. Pakistan purchased it from the Oman Empire in 195881. It is situated at the peak of Arabian Sea. The construction of this port was made by the financial aid from China82. The port was constructed in two stages. There was requisite $248 million for fulfillment of the first stage83, and $600 million were requisite for the accomplishment of second stage84. On 18th February, 2013 Pakistan gave the check of Gwadar to China from Singapore. China is well aware of the significance of Gwadar Port. The port can act as an energy transport hub by developing and securing crude oil pipelines. China privations a crude pipeline from Gwadar to its province Xinjiang85. Xinjiang is 2500km away from Gwadar86. The pipeline provides energy to China from African and Arab countries. China became the largest consumer regarding oil after USA in 200987. The consumption is expected to rise by 203088. 80% of the oil is imported in China via Africa and Middle Eastern countries89. The dependence of China on oil is expected to increase. China desires to use energy resources for economic wellbeing, and also does not want any trouble when USA will stop supplying energy resources. For this trade, and economic purposes China is going to build an Airport in Gwadar city, and Freight trains will run from Gwadar to Kashgar to boost up economic corridor

A Map Showing the Location Of Gas Pipeline From Gwadar To Xinjiang.

The port is basically a gateway between Central Asian states and Chinese province Xinjiang. China also wants the Gwadar port to be linked with KKH, in order to further enkindle the economic activities. The port provides the route to Gulf countries which are composed of 63% of world’s energy resources90. A railroad is expected to link Xinjiang with Turkmenistan, Afghanistan and Pakistan, with Gwadar Port91. The railroad between China and Pakistan will further decrease the distance between both countries. Due to this Gwadar port will supply with energy resources from the Gulf countries. This port also provides the foot of China in Indian Ocean and the Arabian Sea.

Pakistan a natural gateway to China: The strategic grandness of Pakistan is such that it is located at the juncture of three regions: Central Asia, South Asia and West Asia. Pakistan is positioned as a natural hub for economic activity in Asia. China is located in the east to Pakistan. The aloofness of China from its eastern seaport is 4500km. On the other hand, China’s aloofness to Pakistan’s Gwadar port is 2500km, which is much cuter the distance from China to its harbor92. China is lack of energy resources. Pakistan on the other hand, is situated approximate to the energy and resources rich countries which are CARs93. Pakistan is the major itinerary for oil and energy resources. Pakistan is the only country to furnish easy access to the Middle Eastern countries and to Central Asian states through its harbor. China has to cross into Pakistan for reaching resources rich countries. Pakistan is the easy way for Chinese trade in the Asia through Gwadar port. It is the solitary way for China to rise in economy against the USA.

Special Economic Zone: Gwadar port also has strategic worth like that of the Karakoram Highway. The geographically significance of Gwadar port is a blessing to the economic development of Pakistan. According to the survey, Gwadar port would generate billions of dollars in revenue and also increase the rate of employment for uneducated youth of the country94. The expected revenue from land to sea trade through Pakistan and gas and oil transit, or about $1,000,000 per year95. Pakistan has a golden opportunity by the Gwadar port to intensify commercial relations and trade with Central Asian Republics which has the world’s largest gas and oil resources. By the construction of new Gwadar deep sea maritime port, the distance between Pakistan and Central Asian states decreases by 500km 96. Gwadar port facilitates Central Asian states to transfer their energy resources in the world market and in return Pakistan receives profits in transit fees. Pakistan is using this port for energy and trade corridor with Central Asia, China and Afghanistan. This Gwadar city is going to be the next economic special zone in the world. This will help to have an eye on Indian surveillance in the Indian Ocean.

Areas of mutual interest: 

The development of Gwadar port upheavals the position of Pakistan in every realm. It is a fact that development of China’s western provinces cannot be done until the trade or transit corridors are developed through Gwadar97.

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The distance of China from Shanghai to Gwadar is 3000miles, while the distance from Shanghai to Melaka Strait is 9000miles. The port (Gwadar) can be used as energy and economic corridor mutually and for extending two-sided relations98. In 2013, China’s President Xi Jinping, adjudged the worth of the new regionalism and Central Asian Economic Past. There is a pipeline from China to Kazakhstan, there is also a pipeline being risen from TAPI, and there is also an imminent Iran-Pakistan pipeline. The revival of Pakistan in economy, energy, stability, and security is therefore right way linked with China99. Pakistan and China both are mutually hooked on each other in regards of the security and interest. Both have to face same foe. This is also a cause of mutual interest100. China’s province Xinjiang is a nexus between Pakistan and China, and on the other hand, Pakistan is a nexus between China and Muslim World. This is highly vital, because out of every 56 subjects in China, every 10 subjects are Muslims.

Political regional, and internal Challenges: Pakistan`s most imminent threat to itself and to trade corridor is her law and order situation and struggle of different kin groups to destabilize Pakistan to separate Balochistan from the land101. Balochistan itself has a large amount of minerals, petroleum, and gas resources. The Pakistani Government has to answer this most prominent issue and to memorize and remember about Balochi`s perspective; Sectarian violence, extremism, and terrorism are also at its peak in Pakistan102. Institutions of Government have to dissolve them to fully cash this trade corridor, and to gauge this mega master mind Project of Pakistan and China. To fully attract Chinese investment, the Pakistani government has to resolve these major concerning issues103. The Pakistani Government has to ante up his focus on the stings of corridor to make this deal and economic corridor fully functional. Indian, Iranian, American presence in an area of Balochistan is very dreadful for this corridor and also for the sovereignty of Pakistan, Since the 9 /11 incident, Iran and India cooperation have increased specifically in joint exercises of navy, and military in the Indian Ocean104. Indo-US friendliness, and US cooperation with India in Nuclear field105, on the other hand Indo-Iranian cooperation in Afghanistan, and central Asian states will be a cause of fear for Pakistan and China. Pakistan will not counter these challenges alone and may necessitate a boost and a reliable alliance to break the growing influence of these nations in the Indian Oceans106. Currently Afghanistan is in survival condition and transit its trade from Pakistan as Afghanistan came out of this war on terror and moves towards stability and repose in her land will also engage in Pakistan and China Trade corridor107.Pak-China economic corridor is the boulevard that could tolerate the volume to benefit from it in the same. American Armed forces extended their stay in Afghanistan, and Russian influence in Central Asian republics is one of those noteworthy elements which will hamper the growth of this corridor108. Afghanistan is indulged in a world war against terrorism, and is a center of commands of militants, the Afghan government is hostile towards Pakistan. Pakistan`s inter-services intelligence (ISI), suspects Afghanistan’s involvement in Balochistan, and other elements which are developing seed of destabilization of Pakistan109. At the same time, India is also getting all out efforts to win admittance to markets to Central Asian countries by

making arrangements with Iran in building of Chahbahar Port, competition is heightened in this esteem between Pakistan and India110. Iran is already hired in various projects like construction of a bridge over the Amu Darya, linking it with Chahbahar port and Anzob tunnel with Tajikistan111. This will affect Corridor`s Earing from CAR`s.

Dependence on China: Pakistan appreciates the affability which it receives from Chinese. China is becoming powerful in its neighborhood. Alliance with China can provide wellbeing in Pakistan. It can give Pakistan an ascendency in the whole world community. Pakistan is dependent on China in many aspects: economic, security and technical assistance, etc. Firstly, Pakistan gave the contract of Gwadar port to China, so China has constructed the port. Due to this construction there is a trade link between Pakistan and Central Asian Republics through Gwadar. Secondly, she also constructed Karakoram Highway (KKH)for trading112. This trade can provide great advantage of global economic development to Pakistan. It can give boost up to the economy of Pakistan. In that respect is also a Free Trade Agreement (FTA) between PakChina. Both Pak-China have aimed for achieving the trade target of $15 billion up to 2015113.Thirdly, Pakistan is struggling against terrorism. Thither is a tight cooperation between Pakistan and China in fighting against terrorism. It is likewise seen that both states are close to each other for counter terrorism. Alone Pakistan’s naval potential is not in a posture to make any challenge or threat to India, but together Pak-China naval capabilities could alarm India114China has supplied Pakistan with military assistance by providing fighter jets. The modernization of Pakistan’s military is based on China through the providing of M-11 missiles and by helping Pakistan in constructing Shaheen-1 ballistic missiles115, She has also provided Pakistan with the third generation of J-10 fighter jet in a dispense of around 62$6 billions116. China has cooperated Pakistan in the field of nuclear technology. She also provided self-military reliance to Pakistan. This transfer of technology to Pakistan is viewed as a mark of good relations between Pakistan and China. Pakistan is too hooked on China for the building and launching of satellites for discerning and promoting communication. While Pakistan is already enjoying the hosting of Chinese space communication at Karachi. Fourthly, Pakistan is also dependent on China for investment, because she has invested technically and provided material assistance for a nuclear power plant at Chashma in the eastern Punjab for construction of 12 small dams, and for plutonium reprocessing provision117. China has also signed a Memorandum of Understanding (MOU) for providing aid to Pakistan for the construction of hydropower projects for generating electricity. Gary Milhollin said, “There will be no nuclear program in Pakistan if China’s assistance isdeleted118.”

Conclusion Summary: Pakistan, China relations have been deepening on several fronts for the last 60 years. Now Pakistan and China are working and transforming their relations with good neighbors to worthy economic partners in Asian area. Trust relations have been established since 1950, but during last six to seven years, these relations are actually demonstrating that their friendship is more eminent than the mountains and more mysterious than the oceans. China is well aware of the importance of Pakistan`s geostrategic location, on the other hand Pakistan is passing through

a very severe survival conditions that’s why both ones decided to fill in this corridor as soon as possible. In this way Pakistani economic condition will be better enough to continue her journey again to reach fully developed country. On the other hand Chinese western province is also in sense of deprivation, and is an undeveloped region of china. In this way, Pakistan and China both can be beneficiary from this corridor. Pakistan has to form a fast gear towards completing, and attracting Chinese to construct this corridor as soon as possible because Pakistan`s economic revamp is related with this corridor`s development. This corridor will bring many fold of cooperation with each other, and the social-. Political advantages for both of them in the form of development of Xinjiang province and to eradicate the sense of deprivation, restiveness in Balochistan. To get this corridor good one for the benefits of both countries, the Pakistani Government has to answer the subject of law, and order in the country especially in the region of Balochistan. Sense of Peace in Balochistan brings prosperity, not just in Pakistan, but also in the whole neighborhood. The economic corridor that would connect Gwadar Port with western China as well as Central Asia will not only have immense economic value, it would also put PakChina friendship on even more stable ground. Granted the fact that Pakistan and China have no outstanding disputes, the economic corridor plan is in telephone circuit with the realities of the mutuality of the twenty-first century where economic complementarities between nations cement their relations. To disturb the function and completion there are several factors like hidden enemies in the form of proxy war, an internal security situation, and pressure of the big powers of world to defer and to delay this corridor on this edifice. The most salient threat to Pakistan is the ignition Port of Chabahar, and threatening presence of India in Indian Ocean, and neighboring Countries of Pakistan. Great Powers are also influencing this mega project with the help of Iran, and her most efficient and collaborated partner India. Pakistani policy makers and intellectuals have to take a very immediate step on these challenging facts of the cosmos, and regional power who are affecting the completion of this mega in its adjusted time frame. The free trade agreement is most successful between Pakistan and China. Free Trade Agreements (FTAs) are a common type of bilateral agreement between two or more states. FTAs facilitate the free stream of trade that investment and bring about closer economic integration between the binding parties by eliminating tariff/restrictions on each other’s good. More than 60% of global trade, at the moment, is being channeled through bilateral and regional trading agreements. This corridor is a win-win synergy situation in Pakistan and China from every angle and point of view.

Findings.  China and Pakistan both need each other for the fulfillment of their own specific   

interests. The diplomatic relations between both countries are of mutual advantage. The mega projects e.g. Kashgar Special Economic Zone and Gwadar Sea Port strengthen the economic and energy relations between both China and Pakistan. Pakistan is a link between the Muslim world and China. Pakistan acts like a gateway for China. The security issues which the Pakistan is fronting at present generate problems in the economic and energy relations between China and Pakistan.

      

On the other hand, India is establishing and refining Chabahar Port for counteracting the developing hegemony of China in the Indian Oceans. With the time, the economic relations between China and Pakistan are enlightening with the signing of new projects, trade agreements, military assistance etc. For the establishment of social and cultural ties with other, the media of both countries is presenting them as great friends, and economic, social, energy and trade Partners. Both countries also have some mutual interests, e.g. developing of the western province of China and Balochistan of Pakistan. The developed Pakistan is in the interest of China. Therefore, China is assisting Pakistan in every field. China is also refining its economic relations with India but most of the attempts failed because of regional competition, economic rivalry, territorial disputes etc. There is a need to know that in which direction the Chinese system is moving and operated.

Recommendations: Pakistan should strive for membership of the Shanghai Cooperation organization, and CAR`s (central Asian Cooperation) it will engage many countries of the Asian region to get meshed into this corridor and utilize it for its own benefits, CAR`s are most targeted regions for this corridor. This corridor will again reconstruct the old silk road to connect CAR`s and Asian countries with Gwadar deep sea port. Single of the most solid relationship building is joint exhibitions of different countries under one ceiling. Pakistan, China, and CAR`s should make a joint group to read these steps to start bilateral relations with each other, and identifies common areas of reciprocal involvement and industrial linkages to advance trade and inter-domestic relations. Competitiveness in export, and import market is very strong as soon as corridor becomes operational Pakistan will get entry in export market easily and open its exports to CAR`s, and too far beyond countries like Hong Kong, Japan, North and South Korea and other linking countries, and a trade deficit country will go forward as a balance trade country. Declaration of trade with corridor should be offered as tax free the most countries will become employed with this Pak-China corridor, and will be beneficiary from this corridor in the future time prospectus. Proper provision of law, and order, and security should behold on the roads of the corridor and should be world class to attract big buyers, supplier around the region. Local population should be regarded in this corridor and provision should be on this that this corridor`s benefits transferred to population of local fields and population for the better, and long term this success of this mega plan. Social, political and economic engagement should be offered and as well as vocational, and training workshops should be extended to encourage collaboration between local populations of both nations. Energy Projects Pak-China Economic Corridor will also initiate 19 energy projects of worth US$ to generate over 22,000 MW electri city both in public and private sector, which will hold up the industrialization in the Special Economic Zones (SEZs) being grown across this corridor, and will create

tasks for people of both lands. In summation of the above, when the wheel of economic activity will pick-up, investors of different nationalities will flock to the corridor and may tilt the foreign investments numbers in favor Pakistan. Laws need to be ordained to protect the envisaged benefits. Establishing Inland Container Depots (ICDs) The Pak-China economic corridor will bring huge volume of cargo to and from China & Pakistan and will require freight stations at various locations to bring port services closer to shippers in the hinterland through specialized railroad services and decongesting the cargo traffic. Transport Service Opportunities Transport companies can explore more avenues of concern and seek opportunities in the new markets through joint ventures and investments in this economic corridor. The cross-border trade between Pakistan and China would need a congenial custom policy and regulations so as to encourage the business community in the both the countries to actively take part in the maturation and maturation of this economic corridor. What is really important is to pay close attention to the challenges being posed to this project in terms of international resistance to this project through proxy wars, to counter them through policies which integrate the interests envisaged. Success will lie in the Pakistani government’s ability to contain along the most significant stakeholders in this equation including her neighbors. Pakistan will work towards his golden age after completion of this corridor, but maturity, and simplicity should be in our minds, and stakeholders pull in this trade, and economic corridor a symbol of revamp for Pakistan.

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