Chinese help

Reports from Beijing speak of a complete consensus between Prime Minister Shehbaz Sharif and President Xi Jinping over broadening and deepening the strategic Pakistan-China partnership as the two leaders had an exhaustive meeting covering all areas of mutual concern including the multibillion-dollar CPEC and Pakistan’s financial needs in the aftermath of this monsoon’s cataclysmic flooding. The optics of the Pakistani premier's visit have been good starting from the red-carpet welcome accorded to PM Sharif and his delegation to his meeting with President Xi. From the mutual standpoint, putting CPEC back on the rails is rightfully the top item on PM Sharif’s agenda. Although several of its early-harvest projects have come to fruition, transforming Pakistan’s energy and infrastructure landscape, CPEC was in trouble from almost the moment the PTI and Imran Khan rose to power in 2018, with the former PM and his cabinet colleagues publicly maligning the multibillion-dollar initiative with allegations of corruption and misplaced priorities. While none of those allegations came to anything over the four years since, work on the project came to a virtual standstill anyway. The prospective deep-sea port of Gwadar probably suffered the most damage as it was allowed to decay to a point where it became unserviceable for large ships.

All that changes now, with Xi and Sharif joining in their resolve to put the neglected project back on track. President Xi has in particular expressed keen interest in the revival of the Karachi-Peshawar Mainline 1 railway, the Karachi Circular Railway, and Chinese investment and technology transfer in the field of renewable energy. This clearly means President Xi has bought into PM Sharif’s vision of political stability and economic progress in Pakistan going forward. Then there is the issue of foolproof security for Chinese engineers and workers in Pakistan on CPEC projects. PM Sharif must have extended watertight assurances to President Xi in this regard. Another irritant was the stalled repayments on CPEC-related loans, which the PM sought to remove by clearing the outstanding dues just ahead of his visit. These are all significant developments by all accounts.

From the point of view of the rest of the world, however, even more significant will be how China entertains Pakistan’s request for restructuring the nearly $23 billion bilateral debt. China is known to have a strict rulebook on debt, obviating any restructuring. This plays into the Western bogeyman of the Chinese being ruthless and usurious lenders – no doubt a stratagem to throw a spanner in the wheels of the inexorable Chinese investment juggernaut beating Western interests hollow in Asia and Africa basically because Chinese investments have no ideological strings attached. The Chinese leadership must be acutely aware of this, especially after how Sri Lanka’s financial debacle earlier this year was spun by some to throw shade on big-ticket Chinese investments in that country. Ours is a world on the cusp of breaking out of a unipolar order, and a rivalry between the waning superpower and the challenger is understandable. However, our Western friends nudging Pakistan to seek restructuring of its Chinese debt after they agreed in principle to restructure their own debt should not be seen in the context of that rivalry. Rather, it may be seen in the light of a lender seeking to be treated on par with another.

President Xi will also be sympathetic to Pakistan’s cause because the immediate trigger for Islamabad’s request has been a natural disaster of biblical proportions, although there is no denying the Pakistani economy was already in a bad shape on account of a variety of reasons. The long and short of it is that while it is still not clear amid the flurry of diplomatic ceremonies if a determination has been made on the matter or is pending, we have every reason to be optimistic that Pakistan’s iron brother will make the right call and stand by Pakistan, especially knowing that riding on it could be a similar decision of Pakistan’s Western lenders, expected to congregate in Paris before the year is out.