Only days ahead of Prime Minister Imran Khan’s maiden trip to China, the message from Chinese officials is loud and clear: Beijing will do whatever it can to help Pakistan expand its manufacturing sector and increase its export potential.
Imran Khan, accompanied by his foreign minister, will lead a delegation to China from November 2 to November 5, and will sign several agreements on “diverse fields”. After visiting Beijing, Khan is set be a keynote speaker at the First China International Import Expo in Shanghai.
The China Pakistan Economic Corridor (CPEC) is just one dimension of the Pakistan-China brotherly relations which stand on mutual respect, mutual goodwill and confidence in each other, Ambassador Yao Jing told reporters on Friday at the sprawling Chinese embassy in Islamabad.
“We should guard against negative forces out there which don’t want to see China prosper and which are also opposed to the close and exemplary Pakistan-China relations,” Jing said, underscoring that Chinese capital and technology will be put to use to reinforce and expand Pakistan’s manufacturing capacity, which he said is key to increasing exports.
On the occasion Zhao Lijian, the deputy head of mission, explained the status of the $ 19 billion that has so far been injected into Pakistan as soft loans and commercial investments – leading up to the completion of 22 energy and infrastructure projects.
Of the $19 billion, six billion dollars are a soft loan at a 2 percent mark-up, whereas a one-time 7 percent insurance cost is paid on the Chinese Foreign Direct Investment (FDI). The total cost for this loan would hardly exceed 6 percent on the average during the 20-year repayment period that starts in 2022, he explained.
Both officials brushed aside speculation that China was concerned about “concerns expressed by PM Khan or his colleagues”. They call it a non-story. The talk to this effect is totally irrelevant since the bilateral relationship as well as the entire CPEC process rests on mutual consultation and coordination. “We are determined to invest more in Pakistan and buy more from it”, said the ambassador, in what appeared to be an emphatic snub to western media reports casting doubts on CPEC–related projects.
China celebrates the year 2018 as the Year of Reform and openness that began under Deng Xiaoping in the late 70s.
PM Khan espouses the similar vision and there is a lot of common ground to tread for both countries, Jing said, adding that the ground-breaking later this year of the first of the nine Special Economic Zones some near Islamabad will mark the second phase of CPEC. This will not only usher in a new era of development in Pakistan but also serve as a platform for regional trade cooperation.
As per the new government’s vision, the Ambassador said the next phase of CPEC would not only prioritize special economic zones as engines of Pakistan’s economic development but also focus on the social sector development including health, education, agriculture and skills’ development. Furthermore, he stated that CPEC is open to including third parties – such as Afghanistan and Iran in the near future.
© Center for Research and Security Studies (CRSS) and Afghan Studies Center (ASC), Islamabad.