Foreign Policy Blogs

China Invests At Least $20 billion in Pakistan

It hasn’t passed notice in the news cycle, but Pakistan and China are working together on a cooperative agreement worth at least $20 billion. The deal, which also establishes plans for at least $15 billion in private investment, was worked out during Chinese Premier Wen Jiabao’s visit to Pakistan, part of his tour of South Asia.

The deal boosts trade between Pakistan and China for the next three years. The agreement involves investment and development of infrastructure and natural resources in Pakistan, like oil and gas, as well as establishing easier-going transport links between Pakistani and Chinese cities.

No doubt that even though the move is designed to increase the share of Pakistan’s exports to China, this deal favors China balance of payments. Nevertheless the Chinese investment in Pakistan is worthwhile, from a political standpoint, and, given the devastating floods over the summer, necessary from a development standpoint. The move firmly establishes China’s strategy to pry open markets for its surging, careering, economy: along with recent trade deals with India, China has swiftly moved to work with Bangladesh–a set of trade deals with neighboring countries not easily inclined to cooperate together, bilaterally or regionally. China, therefore, provides a nucleus of leverage to begin a process of regional cooperative development.

Moreover, this move establishes Pakistan as a country on equal grounds, in not equal footing, with India. Now, were this not an important move on economic and social grounds, a move that will push many millions out of extreme poverty, the preening bluster that some Pakistani officials, in their public and private capacity might feel, would have easily justified the deal.

Indeed, as the Asia Times reports, partly for the fact that China and Pakistan have enjoyed diplomatic relations for nearly 60 years, 2011 has been named the “Year of China-Pakistan Friendship.”



Faheem Haider
Faheem Haider

Faheem Haider is a political analyst, writer and artist. He holds advanced research degrees in political economy, political theory and the political economy of development from the London School of Economics and Political Science and New York University. He also studied political psychology at Columbia University. During long stints away from his beloved Washington Square Park, he studied peace and conflict resolution and French history and European politics at the American University in Washington DC and the University of Paris, respectively.

Faheem has research expertise in democratic theory and the political economy of democracy in South Asia. In whatever time he has to spare, Faheem paints, writes, and edits his own blog on the photographic image and its relationship to the political narrative of fascist, liberal and progressivist art.

That work and associated writing can be found at the following link:

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