Rough Times in the China-Pakistan ‘All Weather’ Relationship

As Pakistan steps up efforts to woo its closest allies into making a new round of investment in the country, it may find it difficult to convince China amid mounting security and trust concerns. The relationship between the two countries has been strained for some time.

Beijing’s annoyance with Pakistan stems from a multitude of reasons. The “all-weather diplomatic relationship” between the two nations is under pressure primarily due to issues related to the China-Pakistan Economic Corridor (CPEC) project.

The $62 billion CPEC, a centerpiece of China’s ambitious Belt and Road Initiative (BRI), has been operational for more than a decade. China is said to have contributed $25.4 billion in direct investments to Pakistan thus far. The CPEC project, which included electric power plants, increased Pakistan’s transmission network’s length by around 1,000 kilometers and added an estimated 6,000 megawatts to the country’s energy-deficient grid. About 500 kilometers of roads were built. CPEC-related investments also contributed to the expansion of the mega port in Gwadar and work on major water reservoirs.

Despite its potential, CPEC has failed to transform the bilateral relationship so far. 

One of the key factors contributing to this strain is the failure of Pakistani leadership to meet commitments made under the CPEC project. Over the years, Chinese authorities have encountered significant hurdles in dealing with Pakistani leaders, who often struggle to uphold their end of the agreements within the CPEC framework.

The delicate balance between Pakistan’s military and civilian leadership further complicates matters for Beijing. The military holds considerable power in Pakistan and has, on occasion, utilized civilian authorities to press China for a review of terms agreed upon under the CPEC initiative.

During Imran Khan’s tenure as prime minister, which was initially supported by the military, attempts were made to reevaluate CPEC deals, citing them as “unfair” to Pakistan. Despite forming a high-level team for renegotiations, China remained steadfast in its stance and displayed reluctance toward accommodating the Khan administration’s requests.

Subsequent leaders, like Shehbaz Sharif, followed a similar trajectory by discreetly urging Beijing for reviews without much success. These actions, while orchestrated by civilian governments, nevertheless aligned with the military’s agenda. They only served to alienate China further and led to a reduction in Chinese investments within Pakistan.

As China continued rolling over debts owed by Pakistan while maintaining a formal narrative of friendship with Islamabad, underlying disenchantment became palpable in the relationship.

The growing number of extremist attacks in Pakistan on Chinese nationals and projects has only made the issue worse. At least three attacks targeting Chinese interests took place in March. Five Chinese nationals working on a major dam project in Khyber Pakhtunkhwa province were killed in a suicide bombing in late March.

China has reportedly been pressuring Pakistan to allow it a more active military role in order to safeguard its assets and people in the country, but Pakistan has so far refused. 

Furthermore, Beijing’s concerns in Pakistan are partly a result of the country’s ongoing political unrest, which puts pressure on CPEC. One of Beijing’s overarching needs is for stability in Pakistan in order for its investments to continue paying off. 

The past two years have seen a violent cycle of hostility between Khan, the leader of the Pakistan Tehreek-e-Insaf (PTI), and the military. This conflict has paralyzed the country’s economy and diverted attention from security-related issues and CPEC projects.

China is dissatisfied because Pakistan’s economy has deteriorated to the stage where it might not be able to repay Beijing’s loans and investments for a very long time. The private Chinese companies that made investments in Pakistan’s power sector have also had difficulty recouping their losses from Pakistan; as a result, their claims have grown to be worth over $1.5 billion. 

In this regard, Beijing and Islamabad shouldn’t have high expectations of one another unless Pakistan’s new government makes a determined effort to tangibly fulfill Beijing’s expectations. 

The cold relationship is evident from rumors that Pakistan is arranging for its new premier to visit China, but Beijing doesn’t appear to be too interested as both sides struggle to come up with a positive discussion agenda. It’s not yet clear what the visit might include, and whether China’s leadership will meet the new premier of Pakistan.

To further demonstrate to China that Pakistan’s present leadership is committed to bringing CPEC back to life, the military-backed Special Investment Facilitation Council (SIFC) is in favor of expediting its portion of the commitment to at least settle outstanding payments to Chinese power producers. Still, Beijing may not be impressed by these commitments as it is not the first time Pakistan has promised to settle matters.

Furthermore, it’s unclear if Pakistan still views these deals as unfair deals or if that sentiment has faded. Will Pakistan give up on requesting that the agreements made under CPEC be reviewed? A boost to bilateral ties will require both sides to overcome the disagreements Pakistan has had in the past with China over the CPEC deals. Pakistan must demonstrate to Beijing that it is capable of responding to Beijing’s concerns on issues related to political instability, security, and its leadership’s inability to live up to its promises.