China-Pakistan Relations: The Eye of the Storm?

On May 6 and 7, Chinese Foreign Minister Qin Gang was in Pakistan, where he attended the China-Pakistan Foreign Ministers’ Strategic Dialogue as well as a meeting with Pakistani President Arif Alvi and Chief of Army Staff General Asim Munir. During the meetings, both sides reiterated their commitment to the China-Pakistan Economic Corridor (CPEC), a multibillion-dollar package of investments held up as “a prime example” of China’s global Belt and Road Initiative.

However, Qin did sound a note of caution: “[S]tability is a prerequisite for development, and security the foundation of strength and prosperity. As a good neighbor, good friend and good partner of Pakistan, China sincerely hopes that all political forces in Pakistan will build up consensus, [and] maintain stability… so as to bring the country onto a fast track of development and revitalization.”

On May 9, just two days after Qin left Islamabad, Pakistani authorities arrested former Prime Minister Imran Khan, setting off violent protests across the country. While Khan was released by order of the Supreme Court, he continues to face over 100 charges in various court cases. It is widely anticipated that he will be arrested again the near future – and his supporters might take to the streets again.

So much for political consensus and stability.

It is important not to overstate the impact Pakistan’s political vacillations have on the China-Pakistan relationship. In some countries, Beijing has to worry that political transitions will mean a major recalibration of the relationship – in South Asia alone, we’ve seen that play out in Maldives, Nepal, and Sri Lanka over the past five years. Not so in Pakistan.

One thing all Pakistani governments – and, perhaps more importantly, both its military and civilian leaders – agree on is the importance of the relationship with Beijing. The refrain that China-Pakistan relations are “higher than mountains, deeper than oceans and sweeter than honey” has been reiterated by all Pakistan’s political parties and its military officers.

Since the China-Pakistan Economic Corridor launched in 2015, Pakistan has gone through four prime ministers from two different political parties, none of whom served a full term. But every new prime minister, from Nawaz Sharif and his brother, current Prime Minister Shehbaz Sharif, to their arch-rival, Imran Khan, has eagerly pursued expanded cooperation with China, especially under CPEC.

That said, instability in Pakistan does directly affect China’s interests in the country. Most notably, an uptick in attacks on Chinese nationals working within Pakistan has caused deep alarm in Beijing. In July 2021, a terrorist attack targeted a bus transporting Chinese workers to a dam construction site; the bombing killed nine Chinese nationals and four Pakistanis. In April 2022, a suicide bomber killed three Chinese nationals – teachers at a Confucius Institue in Karachi – and their Pakistani driver. In September, a gunman killed one Chinese national and injured two others in a targeted attack.

The violence specifically targeting Chinese nationals is a subset of a bigger problem: Terrorism has spiked in Pakistan since the Taliban returned to power in neighboring Afghanistan. In an ironic twist, Pakistan’s government is now the one bitterly complaining that its neighbor is hosting a hostile terrorist group, as an emboldened Pakistani Taliban step up attacks in Pakistan.

The Islamic State’s local branch, too, is attempting to capitalize off the Taliban’s weak governance and the withdrawal of U.S. forces – and the group has repeatedly stated that China is a target.

As a sign of Beijing’s growing concerns, in February 2023, China’s Ministry of Foreign Affairs issued a warning that Chinese citizens in Pakistan could face severe security threats and should exercise utmost caution. A month later, Nikkei Asia reported that police in Karachi were simply forcing some Chinese-run businesses to close, because they didn’t feel they could provide sufficient security to prevent a terror attack.

China’s concerns about its citizens’ safety are raised at every dialogue. At the talks in early May, Qin told his Pakistani counterpart that China “expects Pakistan to continuously take the strictest measures to ensure the security and safety of Chinese nationals, projects and institutions in Pakistan.”

He also mentioned that “China is ready to deepen cooperation with Pakistan in security capacity building and security system.” Thus far, Pakistan has resisted pressure from China to allow private security firms into the country to provide security for Chinese nationals, fearing a loss of sovereignty. But the pressure from Beijing will continue to mount with each attack.

If Pakistan is physically unsafe, its investment environment is even riskier. Inflation is running rampant and the country is flirting with a default, with negotiations with the IMF on restarting a previous bailout package stalled. Add in the current political crisis – and the additional safety concerns posed by the often-violent protests – and Pakistan certainly doesn’t look like an attractive destination for Chinese companies’ hard-earned cash.

Given the number of times CPEC has been referred to as the “crown jewel” of the larger Belt and Road Initiative, China has a lot at stake reputationally. The fact that its much-vaunted investment framework has not made any meaningful difference to Pakistan’s overall economic health must be a source of frustration in Beijing.

Looking only at official rhetoric, CPEC is chugging along nicely. Qin pledged during his recent trip to Islamabad that “China will, as always, work hand in hand with Pakistan to advance cooperation, further synergize development strategies of the two countries using the CPEC as a platform, share the opportunities of China's development, and promote the building of an even closer China-Pakistan community with a shared future.”

At a trilateral meeting with his Afghan and Pakistani counterparts, there was even mention of “the extension of the China-Pakistan Economic Corridor to Afghanistan” (although no formal announcement was made, just an affirmation that all three government “support” such a move).

But putting aside the rosy language and ambitious visions, CPEC is not progressing smoothly. According to the official CPEC website run by the Pakistani government, 15 projects in the energy and transport sectors were completed from April 2015 to August 2021; another six have been completed since the Taliban takeover. But concerningly, no new projects have reached the groundbreaking or financial closing stage since August 2021.

That supports perceptions that CPEC has ground to a halt amid Pakistan’s “polycrisis.” Regular talks occur, but new commitments are few and far between. With China facing its own economic woes, companies are more reluctant to make investments that look good geopolitically but bad financially. And with the country’s security woes – encapsulated by the recent riots following Khan’s arrest – Beijing may have a hard time putting political pressure on its companies to invest, if that means putting their staff at risk by pursuing projects in Pakistan.

In their meeting in May, Qin told Pakistan’s chief of army staff, “China firmly supports Pakistan in achieving unity and stability, developing an independent and strong economy, and cracking down on terrorism.” That can be read, at face value, as a vote of confidence – but given the wider context, it also reads a bit like a list of demands.