Strategic Relations Between China and Pakistan

Strategic Relations Between China and Pakistan STRATEGIC RELATIONS BETWEEN CHINA AND PAKISTAN AND ITS IMPACT ON INDO PAK RELATIONS If your environment is changing, you must change with it. If you dont, you perish. Curtis E. Sahakian CHAPTER I INTRODUCTION 1. China is a modern developing country with good economic and political condition. It is the biggest ancient society with flair towards modern culture and values. China has very good relations with its neighbours like Pakistan. Pakistan was one of the first countries of the world to recognise China, and since then they have very good relations with each other. 2. Pakistan and China entered into a trade agreement in January 1963 which granted reciprocal Most Favoured Nation status in matters of commerce, trade and shipping. Trade between the border regions of China and Pakistan started in 1969 after the first protocol of trade was signed. This border trade has continued to grow with the patronage of both the countries. Further trade protocols have been signed over the years. The construction of the Karakoram Highway has helped to further trade and communication. Pakistan is an important country for China in trade. A lot of projects of economic development in Pakistan are in process with the co-operation of China which are creating lot ofjobs opportunityfor both Pakistan and China. METHODOLOGY STATEMENT OF THE PROBLEM 4. This dissertation proposes to study and analyse the growing economic relations between Pakistan China, its impact on the security of India and to recommend measures to negate the same by India. HYPOTHESIS 5. Is the growing economic relations between Pakistan China having an adverse impact on the security of India? If yes, what actions should India take to negate them? JUSTIFICATION OF THE STUDY SCOPE 7. This study concentrates on analysing only the Economic relationship between Pakistan and China and the impact of the same on Indo Pak relations with special emphasis on Indias security. 8. The study is not looking into the military, diplomatic and nuclear relationship between the two countries and the impact these relations are having on Indias security and Indo Pak relations. METHODS OF DATA COLLECTION METHODS OF DATA ANALYSIS ORGANISATION OF THE DISSERTATION 11. It is proposed to study the subject in the following manner:- (a) Chapter II. Strategic Relationship and it scope. (b) Chapter III. Historical Perspective of strategic relations between Pakistan and China. (c) Chapter IV. Chinas â€Å"String of Pearls Policy† Pakistans place in it. (d) Chapter V. Growing economic ties between Pakistan and China. (e) Chapter VI. Security Issues for India. (f) Chapter VII. Recommendations to negate this strategic relationship by India. CHAPTER II STRATEGIC RELATIONSHIP AND ITS SCOPE Interest does not tie nations together; it sometimes separates them. But sympathy and understanding does unite them. -Woodrow T. Wilson No nation is an island. Because domestic policies are constantly affected by developments outside, nations are compelled to enter into dialogue with other nations or initiating entities or form alliance(s) for the purpose of enhancing their status internationally, or increasing their power or prestige and survival in the international system[1]. History The concept of strategic relations is quite old. Humans have been establishing governments and communicating with each other for thousands of years. However, it is generally agreed to that international relations truly began to emerge around the 15th century, when people started exploring the world and interacting with other governments and cultures. Organisations like the Dutch East India Company were among the first multinational corporations[2], while representatives of various European governments met with foreign governments to establish trade agreements and to discuss issues of mutual concern. The formal history of strategic relations is often traced back to the Peace of Westphalia of 1648, where the modern state system was developed. Westphalia instituted the legal concept of sovereignty. Westphalia encouraged the rise of the independent nation-state(s), the institutionalisation of diplomacy and armies[3]. This European system was then exported to the Americas, Africa, and Asia via colonisation and the standards of civilisation. The contemporary international system was eventually established through decolonisation after the Cold War. Definition There are many definitions of Strategic Relations written by numerous authors on the web world. Some relevant ones are as given below. Agreement between two or more entities to conduct specified activities or processes, to achieve specified objectives such as product development or distribution[4]. Strategic Relations refers to the collective interactions of the international community, which includes individual nations and states, inter-governmental organisations such as the United Nations, non-governmental organisations, multinational corporations, and so forth. The term is also used to refer to a branch of political science which focuses on the study of these interactions[5]. Strategic Relations is the study of the relations of states with each other and with international organisations and certain sub-national entities (e.g., bureaucracies and political parties). It is related to a number of other academic disciplines, including political science, geography, history, economics, law, sociology, psychology, and philosophy[6]. Strategic Relations is the study of the relations among states and other political and economic units in the international system. Particular areas of study within the field of international relations include diplomacy and diplomatic history, international law, body of rules considered legally binding in the relations between national states, also known as the law of nations[7]. Strategic Relations is the interaction between and among states, and more broadly, the workings of the international system as a whole. It can be conceived of either as a multidisciplinary field, gathering together the international aspects of politics, economics, history, law, and sociology, or as a meta-discipline, focusing on the systemic structures and patterns of interaction of the human species taken as a whole. Barry Buzan Strategic Relations is an area of knowledge based on political science, law, economy, sociology, philosophy, and other social sciences. Traditionally, it not only treats the relations between nation states, but also, International Organisations and non-state actors in the international arena, like non-governmental organisations, and multinational corporations[8]. What do Strategic Relations Mean Strategic Relationship represents the study of foreign affairs and global issues among states within the international system, including the roles of states, inter-governmental organisations (IGOs), non-governmental organisations (NGOs), international non-governmental organisations (INGOs), and multinational corporations (MNCs). It is both an academic and public policy field, and seeks to analyse as well as formulate the foreign policy of a particular state[9]. Apart from political science, Strategic Relations draws upon such diverse fields as economics, history, international law, philosophy, geography, sociology, anthropology, psychology, and cultural studies. It involves a diverse range of issues including globalisation, state sovereignty, ecological sustainability, nuclear proliferation, nationalism, economic development, global finance, terrorism, organised crime, human security, foreign interventionism and human rights. There are two main approaches to the field of International Relations. The first is the Realist or Pragmatist approach. This claims that conflict is inevitable and the best way to approach international relations is to be prepared to engage in conflicts and win. The second approach is the Structuralist approach and is symbolised by diplomacy, according to which conflict is not inevitable, focusing on the causes of conflict, stressing on the costs of conflict vis a vis possible gains. This school of thought has been heavily influenced by Galtungs theory of structural violence[10]. Broadly speaking, the two approaches to International Relations can be attributed to either side of the Atlantic: Realism is seen as a primarily American worldview while Structuralism is seen as typically European. Conclusion Considering the vast spectrum of the subject, Strategic Relations can become incredibly complex. The subject is also sometimes known as â€Å"foreign relations†. Specialists in this field staff diplomatic agencies abroad, provide consultation to businesses which are considering to establish branches overseas, and assist charitable non-governmental organisations with their missions. CHAPTER III HISTORICAL PERSPECTIVE OF STRATEGIC RELATIONS BETWEEN PAKISTAN AND CHINA The opinions we hold of one another, our relations with friends and kinfolk are in no sense permanent, save in appearance, but are as eternally fluid as the sea itself. Marcel Proust Why Pakistan Chose to Align with China Pakistans attitude towards China is determined by its geography, economic constraints, domestic compulsions and the regional and international situation. The erstwhile fragmented shape of Pakistan, i.e. East and West Pakistan, had greatly contributed to the establishment of Pakistans close relations with China. Geographic constraints on account of Pakistans location, topography and the nature of its frontiers, gave rise to security problems for Pakistan. With the construction of highways connecting China and Pakistan, through Pakistan Occupied Kashmir, China acquired an easy approach to Pakistan. This turned out as a mixed blessing for Pakistan. So long as relations with China are friendly, there is no threat from the North. But in case of strained Sino Pak relations, there would be a grave threat from China[11]. Pakistani policy makers were conscious of this constraint and did express their fears in an unambiguous manner. President Ayub Khan wrote in his political autobiography:- West Pakistan is wedged in between three enormous powers with the Soviet Union at the top, the Peoples Republic of China in the North East, and India in the South and East. I know of no other small country which has the somewhat dubious distinction of having three such mighty neighbours[12]. A number of considerations prompted Pakistan to strengthen its economic and trade ties with China. Firstly, like China, Pakistan was a developing country and the two countries faced common problems in the field of agriculture and industrialisation. China had successfully solved the problem of water logging, salinity and floods, which Pakistan could benefit from. Secondly, the aid offered by China was very attractive as it carried rock-bottom low rate of interest or no interest at all. Thirdly, China showed interest in setting up heavy industries in Pakistan Taxila Industrial Complex, assisted by China is an example. Fourthly, trade with China was beneficial to Pakistan as the balance of the trade generally went in favour of Pakistan and rarely in favour of China[13]. Fifthly, 1962 Sino India war turned Pakistan towards China to counter India. Sixthly, US support to India increased after the Sino India war to counter China, this was resented by Pakistan, which China exploited to w ean the influence of US from Pakistan and get a foothold in the Indian subcontinent. And finally, the Kashmir issue. Pakistan adjudged its relations with other countries in terms of their attitude towards the Kashmir issue. Pakistan regarded China as a friend since its hostility towards India in 1962 and its involvement in the Kashmir issue thereafter[14]. The location of Tibet and Xinjiang on the north of the Indian subcontinent places China in a position to intervene militarily in a confrontation between India and Pakistan. The Karakoram Highway can be used by China for sending arms and ammunition and even the forces. In 1971, Indo Pakistan war, it was used for this purpose[15]. With a view to combating India, Pakistan has been seeking a political counterweight against it. Finding that China was interested in undermining Indias political influence in the Afro Asian world, Pakistani leaders thought that China could serve as a counterweight against India. It was, therefore, a Pakistani objective to seek Chinas political support against India[16]. Karakoram Highway[17] History of Sino Pak Relations After Pakistans creation in 1947, Pakistans relations with China were in a dormant state. In 1950, Pakistan officially recognised the Peoples Republic of China, and broke off ties with Taiwan. Bilateral relations were further strengthened at the Bandung Conference in 1955[18], when talks between the two heads of state played an important role in promoting, understanding and paving way for friendly relations and mutual assistance between the two countries. In 1961, Pakistan furthered its relations with China when it voted in favour of Chinas restoration rights in the UN. Sino-Pak relations got a shot in the arm, with deteriorating Sino-Indian relations which resulted in a war in 1962. China and Pakistan consequently met and agreed on the border between them, in 1963[19], and the Karakoram Highway was consequently built, connecting Chinas Sinkiang (Xinjiang-Uygur) Autonomous Region with the Northern Areas of Pakistan. In 1963 itself, a historic trade agreement between China and Pakistan was signed. Following this, diplomatic meetings were fairly frequent. Their strategic cooperation started out due to a mutual need to counter the Soviet Union and India, but later gave birth to Economic cooperation as well. China supported Pakistan in the two wars against India, in 1965 and 1971, with military as well as economic help. These foundations further led to the creation of a Joint Committee for Economy, Trade and Technology in 1982. By the late 1980s, China started discussing possible sales of military equipment and related technology to Pakistan. In the year 1996, Jiang Zemin, the then Chinese President, made a state visit to Pakistan. During the visit, the decision to establish comprehensive friendship and cooperation between the two nations was taken. Relations, since then have continued to move smoothly along the same path. In 2005, China and Pakistan signed a landmark ‘Treaty of Friendship and Co-operation, whereby they committed that â€Å"Neither party will join any alliance or bloc which infringes upon the sovereignty, security and territorial integrity† of either nation. Also reiterated was the agreement that both parties â€Å"would not conclude treaties of this nature with any third party†[20]. Conclusion Hence, during the post Cold War era, China turned out to be Pakistans most significant strategic guarantor as far as India was concerned. It was also the source of initial design information for Pakistans nuclear arsenal and also assisted with building of the nuclear technology complex[21]. Since the late 1990s, economic concerns have gained prominence alongside the military-strategic aspect of the relationship; specifically, trade and energy have taken precedence. Over the years, frequent exchanges of high-level visits and contacts between the two countries have resulted in a number of bilateral trade agreements and investment commitments. A comprehensive free trade agreement was signed in 2008, giving each country unprecedented market access to the other. Trade between Islamabad and Beijing now hovers around $7 billion a year and both sides are set on raising the to $15 billion by 2010[22]. CHAPTER IV CHINAS â€Å"STRING OF PEARLS STRATEGY† PAKISTANS PLACE IN IT. Apart from their other characteristics, the outstanding thing about Chinas 600 million people is that they are â€Å"poor and blank.† This may seem a bad thing, but in reality it is a good thing. Poverty gives rise to the desire for change, the desire for action and the desire for revolution. On a blank sheet of paper free from any mark, the freshest and most beautiful pictures can be painted. Zedong Mao What is String of Pearls Strategy A string of pearls strategy is a strategic move which involves establishing a series of nodes of military and economic power throughout a region. Each node is a â€Å"pearl† in the string, enhancing the overall power of the parent nation S.E. Smith The â€Å"String of Pearls Strategy† is an excellent way to enfold a greater area of territory, thereby gaining more influence on the global stage, but it often evokes comment from other nations, who may be concerned that the string of pearls strategy is the first step in a serious takeover or military threat. Several things are included in a ‘String of Pearls Strategy. The first is increased access to airfields and ports. This may be accomplished by building new facilities or through establishing cordial relations with other nations to ensure access to their ports. In some cases, the strategy involves heavily subsidising construction of new ports and airfield facilities in other countries, with the understanding that these facilities will be made readily available as needed. Developing better diplomatic relations is also a crucial step in a ‘String of Pearls Strategy. Partly, this is undertaken to ensure that shipping lanes and airspace remain free and clear for that particular nation. It may also be used to soothe concerns about a rapidly expanding string of pearls, and to establish solid trade and export agreements which may ultimately benefit both nations. Since a string of pearls strategy may rely on linking a series of pearls, it is important to ensure that each pearl is also safe, and that it will not be threatened by neighbouring nations. Modernising military forces is the third component. A modern military can more effectively maintain and hold individual pearls, and it will also be prepared for various actions and exercises on the part of the parent nation. The modernised military also supports a countrys rise as a global power, and as a nation which commands respect. For nations which are slowly encircled in a string of said pearls, a string of pearls strategy can be upsetting. A country may also slowly take over shipping lanes, which is an issue of concern to nations which are not closely allied with it.[23] Chinas String of Pearl Strategy Chinas String of Pearl Strategy is driven by Chinas need to secure foreign oil and trade routes critical to its development. This has meant establishing an increased level of influence along sea routes through investment, port development and diplomacy. Chinas investments presently extend from Hainan Island in the South China Sea, through the littorals of the Straits of Malacca, including port developments in Chittagong in Bangladesh, Sittwe, Coco, Hianggyi, Khaukphyu, Mergui and Zadetkyi Kyun in Myanmar; Laem Chabang in Thailand; and Sihanoukville in Cambodia. They extend across the Indian Ocean, Sri Lanka, the Maldives, Pakistans Gwadar Port, and in islands within the Arabian Sea and into the Persian Gulf. Chinas Interests in the Indian Ocean Region Its String of Pearls[24] Thus, part of these developments includes the upgrading of airstrips, many supported with military facilities, such as the facility on Woody Island, close to Vietnam. These developments may be directed at shifting the balance of power within the Indian and Arabian Gulf, away from the traditional Indian government management to China. However, it needs to be backed up with regional diplomatic ties, which China must look at to dispense with the need to engage with India. The strategy has been developed partially in response to a lack of progress on the Kra Canal project in Thailand, which would directly link the Indian Ocean with the South China Sea. Isthumus of Kra Its Strategic Location for Chinas Shipping Lanes[25] The â€Å"string of pearls† strategy however provides a forward presence for China along the sea lines of communication that now anchor China directly to the Middle East. The question is, whether this strategy is intended purely to ensure secure supply lines and trade routes, or whether China will later use these in a bid to enforce regional supremacy. As long as Chinese interests remain benign, the â€Å"string of pearls† strategy remains the strongest pointer that China is strengthening its energy supply lines with the Middle East and embarking on a level of Southeast Asian trade. This would definitely result in the development of regional prosperity, that will come with Chinas these actions. If the strategy continues without the development of regional conflicts, the ASEAN trading bloc, with China at its heart, and the massive emerging markets of India and the other Southeast Asian nations close by, will develop and begin to rival that of the EU and the United States, and lessen Chinas dependence on these traditional export markets[26]. Why China Chose Pakistan as a Pearl The Peoples Republic of China is believed to be an ideological state wedded to the Communist ideology based on Marxism Leninism[27]. Chinas relations with other countries can be explained on the basis of two conceptual frameworks based on â€Å"Alliance Model† and on â€Å"United Front Model†[28]. However, with Pakistan, Chinas relations appear to be on the â€Å"Alliance Model†. This model sees Chinas foreign policy as â€Å"concerned with short problems, externally determined and reactive. It sees Chinas concern for security as the dominant theme of Chinas foreign policy†[29]. There is an immense desire in China to achieve the status of a Super Power. The first step towards that direction is to achieve a dominant position in Asia. The Indian sub-continent is one of the important areas in this region. In order to be a dominant power, China needs to have an effective dominance in the sub-continent. To this effect, India poses a challenge to China in the region. China is therefore keen to weaken India and who better than Pakistan can be utilised for this purpose by China[30]. USSR, which used to be a friend, guide and protector for China during the initial years of their formation in 1950, began to be considered as a rival and an unreliable ally by the end of the 1950s. Subsequent closeness of USSR with India and her attempts to befriend Pakistan in the 1960s, especially after the 1965 Indo Pak war, led to increased differences between the two countries. China was interested in preventing the Soviet Union from spreading its influence in Pakistan. Knowing that USSR could not befriend Pakistan at the cost of India, China decided to make friends with Pakistan with the aim of preventing the USSR from spreading its influence in South Asia using a powerful India[31]. Chinas strategic objectives in Pakistan stem from the fact that Xinjiang and Tibet are contiguous to the Indian sub-continent and China is still consolidating itself in these regions. Pakistan occupies certain areas of Kashmir which have immense strategic value in view of this. Pakistan occupied Kashmir (POK) is located in a region where China, India and Afghanistan meet together. The religious affinity between the people of Xinjiang and Pakistan along with the history of repeated revolts by the Xinjiang people against the Chinese government forced China to sign a boundary agreement with Pakistan in 1963 to acquire strategically important areas to keep the influence of the Pakistani fundamentalism away from the people of Xinjiang[32]. Proximity of Chinas Xinjiang Province Tibet Autonomous Region to POK[33] Pakistans geography was helpful in supporting Chinese positions in the North-East in the Chumby Valley (prior to formation of Bangladesh) and in the Ladakh region in the rear of Indian positions. Thus Pakistan d and still s decisively in the defence of Chinas southern flank resulting in close ties between the two countries. The proximity of the Indian sub-continent to Xinjiang and Tibet, Pakistans location in the sub continent and the affinity existing between the Muslims of Xinjiang and Pakistan are matters of great importance for China in its geo political calculations[34]. It could also be Chinas objective to keep things simmering in South Asia by exploiting the Indo Pakistan disputes so that they may weaken each other by confrontation, leaving adequate space for China to be effective in the region. All the above reasons have led to an increased proximity of the Chinese policies towards Pakistan. Conclusion Chinas bond with Pakistan allowed the former a greater sphere of influence in to South Asia, as well provided a bridge between the Muslim world and Beijing. Though, traditionally, the driving factor for China was a hedge against India and getting strategic leverage against India, relations with China gave Pakistan access to civilian and military resources also. To this day, the relationship between the two countries is of high strategic importance, the military relationship with China being the corner stone of Pakistans foreign policy. And in return, Pakistan is helpful in realising Chinas dream of establishing her influence over the globe. CHAPTER V GROWING ECONOMIC TIES BETWEEN PAKISTAN AND CHINA. To attract good fortune, spend a new penny on an old friend. an old Chinese proverb Though political relations hold the maximum importance between countries, the economic relations are also noteworthy and infact, in recent times, have become one of the most significant factors in determining a nations foreign relations policy. Broadly, the economic relations can be divided into two forms trade and aid. Historical Perspective of Economic Ties During the Han Dynasty, trade existed between Ancient China and Ancient India on camels and yaks along the silk route for almost 3,000 years[35]. Infact, the silk route connecting China and Pakistan was closed down in 1949 and was re-opened in 1967 between the two countries. After partition, trade with India came to a standstill for Pakistan. Hence, Pakistans search for a trading partner to sell jute and cotton in return of coal, iron, cement etc prompted Pakistan to establish economic relations with China[36]. Silk Route[37] Economic and cultural interaction between Pakistan and China began in the 1950s. In April 1955, the late Premier Zhou Enlai held talks with the then Pakistan Prime Minister, M. Ali, during the Bandung Conference, and both sides agreed to strengthen bilateral ties. In January 1963, China and Pakistan signed their fist trade agreement[38]. This was followed up with the â€Å"Cultural Agreement† between the two countries in 1965[39]. The bonding established between the two states has continued ever since, with both countries looking at closer ties with each other for respective benefits. The relations between Pakistan and China were restricted to trade relations till 1964, however, it was in 1965, for the first time, that Pakistan started receiving Chinese aid[40]. In 1978, the Karakoram Highway was officially opened to trade between both countries. In 1986, China and Pakistan reached a comprehensive nuclear cooperation agreement which resulted in a 300-megawatt nuclear power pla nt built with Chinese help in Punjab province, which was completed in 1999[41]. Chinas Recent Economic Involvement in Pakistan President Pervez Musharraf took over power of Pakistan in October 1999 and since then the economic aspect became a major factor in Pakistan-China relations. During his visit to China in January 2000, he laid a great deal of emphasis on economic cooperation and hence the economic relations between the two countries slowly began to improve, both in trade and investments. The Chinese side too reciprocated positively by enhancing economic activity between the two countries[42]. The Chinese Premier at that time, Zhu Rongji, while visiting Pakistan in May 2001, urged the two sides to â€Å"boost cooperation in agriculture, infrastructure, information technology and other fields under the principle of reciprocity and mutual benefit for achieving common prosperity†[43].During this visit, Pakistan and China signed six Agreements and one MoU (Memorandum of Understanding). The Chinese financial assistance to Pakistan at that time was roughly over one billion dollars. The six agreements included Economic and Technical Cooperation, Tourism Cooperation, Lease Agreement on Saindak Copper-Gold Project, Supply of Locomotives to Pakistan Railways, Supply of Passenger Coaches to Pakistan Railways, White Oil Pipeline and MoU between Chinas ZTE and Pakistan Telecommunications Co. Ltd. Besides, the most important aspect of increasing economic cooperation was that the Chinese Premier reiterated his support for the Gwadar deep sea port and the Mekran coastal highway pro jects[44]. Mekran Coastal Highway[45] During his visit to China in November 2003, President Musharrafs signed a â€Å"Joint Declaration on Direction of Bilateral Relations.† It was a road-map to determine the direction and scope of overall Pakistan-China bilateral relations in the future. It laid additional emphasis on increasing the economic cooperation between the two countries and institutionalising mechanisms for consolidating an all-round relationship[46]. In December 2004, the two countries signed seven agreements in the sectors of trade, communication and energy. They also formulated a framework for enhanced cooperation between them. These agreements revolved around enhancing the bilateral trade, further progress on preferential trade agreement, setting up of joint agro-based industries and increasing of Chinese investments in Pakistan[47]. In April 2005, as many as 21 agreements and MoUs were signed between the two countries. These included cooperation in economy, defence, energy, infrastructure, social sector, health, education, higher education, housing and various other areas. The two countries also signed a â€Å"Treaty of Friendship, Cooperation and Good Neighbourly Relations†[48]. In January 2006, the Early Harvest Programme was launched to encourage bilateral trade, under which China extended zero-rated tariffs on 767 items while Pakistan reciprocated by extending the facility on 464 items[49]. In November 2006, China and Pakistan signed a FTA (free trade agreement). As per the agreement, China and Pakistan would reduce the tariffs on all goods in two phases. The aim of the agreement is to eliminate tariffs on no less than 90 percent of products, both in terms of tariff lines and trade volume, within a reasonably short period of time and on the basis of taking care of the concerns of both sides[50]. The Early Harvest Programme, which had commenced in January 2006, was merged into the FTA[51]. Also, China vowed to help Pakistan in civil nuclear technology by building and helping in the Khusab Nuclear Programme providing technology to Pakistan for better maintenance of civil nuclear plants[52]. In 2009, Pakistan and China signed a number of agreements and MoUs. These included construction of Bunji Dam in the Northern Areas with a capacity of 7,000 Megawatts[53], provision of soft loans for space, space technology and alternate energy including an amount of U.S. $ 190 million to supply Pakistani satellite PAKSAT-1R, which will replace the present satellite PAKSAT-1 that has a useful life until 2011. This loan will cover 85 percent of project Strategic Relations Between China and Pakistan Strategic Relations Between China and Pakistan STRATEGIC RELATIONS BETWEEN CHINA AND PAKISTAN AND ITS IMPACT ON INDO PAK RELATIONS If your environment is changing, you must change with it. If you dont, you perish. Curtis E. Sahakian CHAPTER I INTRODUCTION 1. China is a modern developing country with good economic and political condition. It is the biggest ancient society with flair towards modern culture and values. China has very good relations with its neighbours like Pakistan. Pakistan was one of the first countries of the world to recognise China, and since then they have very good relations with each other. 2. Pakistan and China entered into a trade agreement in January 1963 which granted reciprocal Most Favoured Nation status in matters of commerce, trade and shipping. Trade between the border regions of China and Pakistan started in 1969 after the first protocol of trade was signed. This border trade has continued to grow with the patronage of both the countries. Further trade protocols have been signed over the years. The construction of the Karakoram Highway has helped to further trade and communication. Pakistan is an important country for China in trade. A lot of projects of economic development in Pakistan are in process with the co-operation of China which are creating lot ofjobs opportunityfor both Pakistan and China. METHODOLOGY STATEMENT OF THE PROBLEM 4. This dissertation proposes to study and analyse the growing economic relations between Pakistan China, its impact on the security of India and to recommend measures to negate the same by India. HYPOTHESIS 5. Is the growing economic relations between Pakistan China having an adverse impact on the security of India? If yes, what actions should India take to negate them? JUSTIFICATION OF THE STUDY SCOPE 7. This study concentrates on analysing only the Economic relationship between Pakistan and China and the impact of the same on Indo Pak relations with special emphasis on Indias security. 8. The study is not looking into the military, diplomatic and nuclear relationship between the two countries and the impact these relations are having on Indias security and Indo Pak relations. METHODS OF DATA COLLECTION METHODS OF DATA ANALYSIS ORGANISATION OF THE DISSERTATION 11. It is proposed to study the subject in the following manner:- (a) Chapter II. Strategic Relationship and it scope. (b) Chapter III. Historical Perspective of strategic relations between Pakistan and China. (c) Chapter IV. Chinas â€Å"String of Pearls Policy† Pakistans place in it. (d) Chapter V. Growing economic ties between Pakistan and China. (e) Chapter VI. Security Issues for India. (f) Chapter VII. Recommendations to negate this strategic relationship by India. CHAPTER II STRATEGIC RELATIONSHIP AND ITS SCOPE Interest does not tie nations together; it sometimes separates them. But sympathy and understanding does unite them. -Woodrow T. Wilson No nation is an island. Because domestic policies are constantly affected by developments outside, nations are compelled to enter into dialogue with other nations or initiating entities or form alliance(s) for the purpose of enhancing their status internationally, or increasing their power or prestige and survival in the international system[1]. History The concept of strategic relations is quite old. Humans have been establishing governments and communicating with each other for thousands of years. However, it is generally agreed to that international relations truly began to emerge around the 15th century, when people started exploring the world and interacting with other governments and cultures. Organisations like the Dutch East India Company were among the first multinational corporations[2], while representatives of various European governments met with foreign governments to establish trade agreements and to discuss issues of mutual concern. The formal history of strategic relations is often traced back to the Peace of Westphalia of 1648, where the modern state system was developed. Westphalia instituted the legal concept of sovereignty. Westphalia encouraged the rise of the independent nation-state(s), the institutionalisation of diplomacy and armies[3]. This European system was then exported to the Americas, Africa, and Asia via colonisation and the standards of civilisation. The contemporary international system was eventually established through decolonisation after the Cold War. Definition There are many definitions of Strategic Relations written by numerous authors on the web world. Some relevant ones are as given below. Agreement between two or more entities to conduct specified activities or processes, to achieve specified objectives such as product development or distribution[4]. Strategic Relations refers to the collective interactions of the international community, which includes individual nations and states, inter-governmental organisations such as the United Nations, non-governmental organisations, multinational corporations, and so forth. The term is also used to refer to a branch of political science which focuses on the study of these interactions[5]. Strategic Relations is the study of the relations of states with each other and with international organisations and certain sub-national entities (e.g., bureaucracies and political parties). It is related to a number of other academic disciplines, including political science, geography, history, economics, law, sociology, psychology, and philosophy[6]. Strategic Relations is the study of the relations among states and other political and economic units in the international system. Particular areas of study within the field of international relations include diplomacy and diplomatic history, international law, body of rules considered legally binding in the relations between national states, also known as the law of nations[7]. Strategic Relations is the interaction between and among states, and more broadly, the workings of the international system as a whole. It can be conceived of either as a multidisciplinary field, gathering together the international aspects of politics, economics, history, law, and sociology, or as a meta-discipline, focusing on the systemic structures and patterns of interaction of the human species taken as a whole. Barry Buzan Strategic Relations is an area of knowledge based on political science, law, economy, sociology, philosophy, and other social sciences. Traditionally, it not only treats the relations between nation states, but also, International Organisations and non-state actors in the international arena, like non-governmental organisations, and multinational corporations[8]. What do Strategic Relations Mean Strategic Relationship represents the study of foreign affairs and global issues among states within the international system, including the roles of states, inter-governmental organisations (IGOs), non-governmental organisations (NGOs), international non-governmental organisations (INGOs), and multinational corporations (MNCs). It is both an academic and public policy field, and seeks to analyse as well as formulate the foreign policy of a particular state[9]. Apart from political science, Strategic Relations draws upon such diverse fields as economics, history, international law, philosophy, geography, sociology, anthropology, psychology, and cultural studies. It involves a diverse range of issues including globalisation, state sovereignty, ecological sustainability, nuclear proliferation, nationalism, economic development, global finance, terrorism, organised crime, human security, foreign interventionism and human rights. There are two main approaches to the field of International Relations. The first is the Realist or Pragmatist approach. This claims that conflict is inevitable and the best way to approach international relations is to be prepared to engage in conflicts and win. The second approach is the Structuralist approach and is symbolised by diplomacy, according to which conflict is not inevitable, focusing on the causes of conflict, stressing on the costs of conflict vis a vis possible gains. This school of thought has been heavily influenced by Galtungs theory of structural violence[10]. Broadly speaking, the two approaches to International Relations can be attributed to either side of the Atlantic: Realism is seen as a primarily American worldview while Structuralism is seen as typically European. Conclusion Considering the vast spectrum of the subject, Strategic Relations can become incredibly complex. The subject is also sometimes known as â€Å"foreign relations†. Specialists in this field staff diplomatic agencies abroad, provide consultation to businesses which are considering to establish branches overseas, and assist charitable non-governmental organisations with their missions. CHAPTER III HISTORICAL PERSPECTIVE OF STRATEGIC RELATIONS BETWEEN PAKISTAN AND CHINA The opinions we hold of one another, our relations with friends and kinfolk are in no sense permanent, save in appearance, but are as eternally fluid as the sea itself. Marcel Proust Why Pakistan Chose to Align with China Pakistans attitude towards China is determined by its geography, economic constraints, domestic compulsions and the regional and international situation. The erstwhile fragmented shape of Pakistan, i.e. East and West Pakistan, had greatly contributed to the establishment of Pakistans close relations with China. Geographic constraints on account of Pakistans location, topography and the nature of its frontiers, gave rise to security problems for Pakistan. With the construction of highways connecting China and Pakistan, through Pakistan Occupied Kashmir, China acquired an easy approach to Pakistan. This turned out as a mixed blessing for Pakistan. So long as relations with China are friendly, there is no threat from the North. But in case of strained Sino Pak relations, there would be a grave threat from China[11]. Pakistani policy makers were conscious of this constraint and did express their fears in an unambiguous manner. President Ayub Khan wrote in his political autobiography:- West Pakistan is wedged in between three enormous powers with the Soviet Union at the top, the Peoples Republic of China in the North East, and India in the South and East. I know of no other small country which has the somewhat dubious distinction of having three such mighty neighbours[12]. A number of considerations prompted Pakistan to strengthen its economic and trade ties with China. Firstly, like China, Pakistan was a developing country and the two countries faced common problems in the field of agriculture and industrialisation. China had successfully solved the problem of water logging, salinity and floods, which Pakistan could benefit from. Secondly, the aid offered by China was very attractive as it carried rock-bottom low rate of interest or no interest at all. Thirdly, China showed interest in setting up heavy industries in Pakistan Taxila Industrial Complex, assisted by China is an example. Fourthly, trade with China was beneficial to Pakistan as the balance of the trade generally went in favour of Pakistan and rarely in favour of China[13]. Fifthly, 1962 Sino India war turned Pakistan towards China to counter India. Sixthly, US support to India increased after the Sino India war to counter China, this was resented by Pakistan, which China exploited to w ean the influence of US from Pakistan and get a foothold in the Indian subcontinent. And finally, the Kashmir issue. Pakistan adjudged its relations with other countries in terms of their attitude towards the Kashmir issue. Pakistan regarded China as a friend since its hostility towards India in 1962 and its involvement in the Kashmir issue thereafter[14]. The location of Tibet and Xinjiang on the north of the Indian subcontinent places China in a position to intervene militarily in a confrontation between India and Pakistan. The Karakoram Highway can be used by China for sending arms and ammunition and even the forces. In 1971, Indo Pakistan war, it was used for this purpose[15]. With a view to combating India, Pakistan has been seeking a political counterweight against it. Finding that China was interested in undermining Indias political influence in the Afro Asian world, Pakistani leaders thought that China could serve as a counterweight against India. It was, therefore, a Pakistani objective to seek Chinas political support against India[16]. Karakoram Highway[17] History of Sino Pak Relations After Pakistans creation in 1947, Pakistans relations with China were in a dormant state. In 1950, Pakistan officially recognised the Peoples Republic of China, and broke off ties with Taiwan. Bilateral relations were further strengthened at the Bandung Conference in 1955[18], when talks between the two heads of state played an important role in promoting, understanding and paving way for friendly relations and mutual assistance between the two countries. In 1961, Pakistan furthered its relations with China when it voted in favour of Chinas restoration rights in the UN. Sino-Pak relations got a shot in the arm, with deteriorating Sino-Indian relations which resulted in a war in 1962. China and Pakistan consequently met and agreed on the border between them, in 1963[19], and the Karakoram Highway was consequently built, connecting Chinas Sinkiang (Xinjiang-Uygur) Autonomous Region with the Northern Areas of Pakistan. In 1963 itself, a historic trade agreement between China and Pakistan was signed. Following this, diplomatic meetings were fairly frequent. Their strategic cooperation started out due to a mutual need to counter the Soviet Union and India, but later gave birth to Economic cooperation as well. China supported Pakistan in the two wars against India, in 1965 and 1971, with military as well as economic help. These foundations further led to the creation of a Joint Committee for Economy, Trade and Technology in 1982. By the late 1980s, China started discussing possible sales of military equipment and related technology to Pakistan. In the year 1996, Jiang Zemin, the then Chinese President, made a state visit to Pakistan. During the visit, the decision to establish comprehensive friendship and cooperation between the two nations was taken. Relations, since then have continued to move smoothly along the same path. In 2005, China and Pakistan signed a landmark ‘Treaty of Friendship and Co-operation, whereby they committed that â€Å"Neither party will join any alliance or bloc which infringes upon the sovereignty, security and territorial integrity† of either nation. Also reiterated was the agreement that both parties â€Å"would not conclude treaties of this nature with any third party†[20]. Conclusion Hence, during the post Cold War era, China turned out to be Pakistans most significant strategic guarantor as far as India was concerned. It was also the source of initial design information for Pakistans nuclear arsenal and also assisted with building of the nuclear technology complex[21]. Since the late 1990s, economic concerns have gained prominence alongside the military-strategic aspect of the relationship; specifically, trade and energy have taken precedence. Over the years, frequent exchanges of high-level visits and contacts between the two countries have resulted in a number of bilateral trade agreements and investment commitments. A comprehensive free trade agreement was signed in 2008, giving each country unprecedented market access to the other. Trade between Islamabad and Beijing now hovers around $7 billion a year and both sides are set on raising the to $15 billion by 2010[22]. CHAPTER IV CHINAS â€Å"STRING OF PEARLS STRATEGY† PAKISTANS PLACE IN IT. Apart from their other characteristics, the outstanding thing about Chinas 600 million people is that they are â€Å"poor and blank.† This may seem a bad thing, but in reality it is a good thing. Poverty gives rise to the desire for change, the desire for action and the desire for revolution. On a blank sheet of paper free from any mark, the freshest and most beautiful pictures can be painted. Zedong Mao What is String of Pearls Strategy A string of pearls strategy is a strategic move which involves establishing a series of nodes of military and economic power throughout a region. Each node is a â€Å"pearl† in the string, enhancing the overall power of the parent nation S.E. Smith The â€Å"String of Pearls Strategy† is an excellent way to enfold a greater area of territory, thereby gaining more influence on the global stage, but it often evokes comment from other nations, who may be concerned that the string of pearls strategy is the first step in a serious takeover or military threat. Several things are included in a ‘String of Pearls Strategy. The first is increased access to airfields and ports. This may be accomplished by building new facilities or through establishing cordial relations with other nations to ensure access to their ports. In some cases, the strategy involves heavily subsidising construction of new ports and airfield facilities in other countries, with the understanding that these facilities will be made readily available as needed. Developing better diplomatic relations is also a crucial step in a ‘String of Pearls Strategy. Partly, this is undertaken to ensure that shipping lanes and airspace remain free and clear for that particular nation. It may also be used to soothe concerns about a rapidly expanding string of pearls, and to establish solid trade and export agreements which may ultimately benefit both nations. Since a string of pearls strategy may rely on linking a series of pearls, it is important to ensure that each pearl is also safe, and that it will not be threatened by neighbouring nations. Modernising military forces is the third component. A modern military can more effectively maintain and hold individual pearls, and it will also be prepared for various actions and exercises on the part of the parent nation. The modernised military also supports a countrys rise as a global power, and as a nation which commands respect. For nations which are slowly encircled in a string of said pearls, a string of pearls strategy can be upsetting. A country may also slowly take over shipping lanes, which is an issue of concern to nations which are not closely allied with it.[23] Chinas String of Pearl Strategy Chinas String of Pearl Strategy is driven by Chinas need to secure foreign oil and trade routes critical to its development. This has meant establishing an increased level of influence along sea routes through investment, port development and diplomacy. Chinas investments presently extend from Hainan Island in the South China Sea, through the littorals of the Straits of Malacca, including port developments in Chittagong in Bangladesh, Sittwe, Coco, Hianggyi, Khaukphyu, Mergui and Zadetkyi Kyun in Myanmar; Laem Chabang in Thailand; and Sihanoukville in Cambodia. They extend across the Indian Ocean, Sri Lanka, the Maldives, Pakistans Gwadar Port, and in islands within the Arabian Sea and into the Persian Gulf. Chinas Interests in the Indian Ocean Region Its String of Pearls[24] Thus, part of these developments includes the upgrading of airstrips, many supported with military facilities, such as the facility on Woody Island, close to Vietnam. These developments may be directed at shifting the balance of power within the Indian and Arabian Gulf, away from the traditional Indian government management to China. However, it needs to be backed up with regional diplomatic ties, which China must look at to dispense with the need to engage with India. The strategy has been developed partially in response to a lack of progress on the Kra Canal project in Thailand, which would directly link the Indian Ocean with the South China Sea. Isthumus of Kra Its Strategic Location for Chinas Shipping Lanes[25] The â€Å"string of pearls† strategy however provides a forward presence for China along the sea lines of communication that now anchor China directly to the Middle East. The question is, whether this strategy is intended purely to ensure secure supply lines and trade routes, or whether China will later use these in a bid to enforce regional supremacy. As long as Chinese interests remain benign, the â€Å"string of pearls† strategy remains the strongest pointer that China is strengthening its energy supply lines with the Middle East and embarking on a level of Southeast Asian trade. This would definitely result in the development of regional prosperity, that will come with Chinas these actions. If the strategy continues without the development of regional conflicts, the ASEAN trading bloc, with China at its heart, and the massive emerging markets of India and the other Southeast Asian nations close by, will develop and begin to rival that of the EU and the United States, and lessen Chinas dependence on these traditional export markets[26]. Why China Chose Pakistan as a Pearl The Peoples Republic of China is believed to be an ideological state wedded to the Communist ideology based on Marxism Leninism[27]. Chinas relations with other countries can be explained on the basis of two conceptual frameworks based on â€Å"Alliance Model† and on â€Å"United Front Model†[28]. However, with Pakistan, Chinas relations appear to be on the â€Å"Alliance Model†. This model sees Chinas foreign policy as â€Å"concerned with short problems, externally determined and reactive. It sees Chinas concern for security as the dominant theme of Chinas foreign policy†[29]. There is an immense desire in China to achieve the status of a Super Power. The first step towards that direction is to achieve a dominant position in Asia. The Indian sub-continent is one of the important areas in this region. In order to be a dominant power, China needs to have an effective dominance in the sub-continent. To this effect, India poses a challenge to China in the region. China is therefore keen to weaken India and who better than Pakistan can be utilised for this purpose by China[30]. USSR, which used to be a friend, guide and protector for China during the initial years of their formation in 1950, began to be considered as a rival and an unreliable ally by the end of the 1950s. Subsequent closeness of USSR with India and her attempts to befriend Pakistan in the 1960s, especially after the 1965 Indo Pak war, led to increased differences between the two countries. China was interested in preventing the Soviet Union from spreading its influence in Pakistan. Knowing that USSR could not befriend Pakistan at the cost of India, China decided to make friends with Pakistan with the aim of preventing the USSR from spreading its influence in South Asia using a powerful India[31]. Chinas strategic objectives in Pakistan stem from the fact that Xinjiang and Tibet are contiguous to the Indian sub-continent and China is still consolidating itself in these regions. Pakistan occupies certain areas of Kashmir which have immense strategic value in view of this. Pakistan occupied Kashmir (POK) is located in a region where China, India and Afghanistan meet together. The religious affinity between the people of Xinjiang and Pakistan along with the history of repeated revolts by the Xinjiang people against the Chinese government forced China to sign a boundary agreement with Pakistan in 1963 to acquire strategically important areas to keep the influence of the Pakistani fundamentalism away from the people of Xinjiang[32]. Proximity of Chinas Xinjiang Province Tibet Autonomous Region to POK[33] Pakistans geography was helpful in supporting Chinese positions in the North-East in the Chumby Valley (prior to formation of Bangladesh) and in the Ladakh region in the rear of Indian positions. Thus Pakistan d and still s decisively in the defence of Chinas southern flank resulting in close ties between the two countries. The proximity of the Indian sub-continent to Xinjiang and Tibet, Pakistans location in the sub continent and the affinity existing between the Muslims of Xinjiang and Pakistan are matters of great importance for China in its geo political calculations[34]. It could also be Chinas objective to keep things simmering in South Asia by exploiting the Indo Pakistan disputes so that they may weaken each other by confrontation, leaving adequate space for China to be effective in the region. All the above reasons have led to an increased proximity of the Chinese policies towards Pakistan. Conclusion Chinas bond with Pakistan allowed the former a greater sphere of influence in to South Asia, as well provided a bridge between the Muslim world and Beijing. Though, traditionally, the driving factor for China was a hedge against India and getting strategic leverage against India, relations with China gave Pakistan access to civilian and military resources also. To this day, the relationship between the two countries is of high strategic importance, the military relationship with China being the corner stone of Pakistans foreign policy. And in return, Pakistan is helpful in realising Chinas dream of establishing her influence over the globe. CHAPTER V GROWING ECONOMIC TIES BETWEEN PAKISTAN AND CHINA. To attract good fortune, spend a new penny on an old friend. an old Chinese proverb Though political relations hold the maximum importance between countries, the economic relations are also noteworthy and infact, in recent times, have become one of the most significant factors in determining a nations foreign relations policy. Broadly, the economic relations can be divided into two forms trade and aid. Historical Perspective of Economic Ties During the Han Dynasty, trade existed between Ancient China and Ancient India on camels and yaks along the silk route for almost 3,000 years[35]. Infact, the silk route connecting China and Pakistan was closed down in 1949 and was re-opened in 1967 between the two countries. After partition, trade with India came to a standstill for Pakistan. Hence, Pakistans search for a trading partner to sell jute and cotton in return of coal, iron, cement etc prompted Pakistan to establish economic relations with China[36]. Silk Route[37] Economic and cultural interaction between Pakistan and China began in the 1950s. In April 1955, the late Premier Zhou Enlai held talks with the then Pakistan Prime Minister, M. Ali, during the Bandung Conference, and both sides agreed to strengthen bilateral ties. In January 1963, China and Pakistan signed their fist trade agreement[38]. This was followed up with the â€Å"Cultural Agreement† between the two countries in 1965[39]. The bonding established between the two states has continued ever since, with both countries looking at closer ties with each other for respective benefits. The relations between Pakistan and China were restricted to trade relations till 1964, however, it was in 1965, for the first time, that Pakistan started receiving Chinese aid[40]. In 1978, the Karakoram Highway was officially opened to trade between both countries. In 1986, China and Pakistan reached a comprehensive nuclear cooperation agreement which resulted in a 300-megawatt nuclear power pla nt built with Chinese help in Punjab province, which was completed in 1999[41]. Chinas Recent Economic Involvement in Pakistan President Pervez Musharraf took over power of Pakistan in October 1999 and since then the economic aspect became a major factor in Pakistan-China relations. During his visit to China in January 2000, he laid a great deal of emphasis on economic cooperation and hence the economic relations between the two countries slowly began to improve, both in trade and investments. The Chinese side too reciprocated positively by enhancing economic activity between the two countries[42]. The Chinese Premier at that time, Zhu Rongji, while visiting Pakistan in May 2001, urged the two sides to â€Å"boost cooperation in agriculture, infrastructure, information technology and other fields under the principle of reciprocity and mutual benefit for achieving common prosperity†[43].During this visit, Pakistan and China signed six Agreements and one MoU (Memorandum of Understanding). The Chinese financial assistance to Pakistan at that time was roughly over one billion dollars. The six agreements included Economic and Technical Cooperation, Tourism Cooperation, Lease Agreement on Saindak Copper-Gold Project, Supply of Locomotives to Pakistan Railways, Supply of Passenger Coaches to Pakistan Railways, White Oil Pipeline and MoU between Chinas ZTE and Pakistan Telecommunications Co. Ltd. Besides, the most important aspect of increasing economic cooperation was that the Chinese Premier reiterated his support for the Gwadar deep sea port and the Mekran coastal highway pro jects[44]. Mekran Coastal Highway[45] During his visit to China in November 2003, President Musharrafs signed a â€Å"Joint Declaration on Direction of Bilateral Relations.† It was a road-map to determine the direction and scope of overall Pakistan-China bilateral relations in the future. It laid additional emphasis on increasing the economic cooperation between the two countries and institutionalising mechanisms for consolidating an all-round relationship[46]. In December 2004, the two countries signed seven agreements in the sectors of trade, communication and energy. They also formulated a framework for enhanced cooperation between them. These agreements revolved around enhancing the bilateral trade, further progress on preferential trade agreement, setting up of joint agro-based industries and increasing of Chinese investments in Pakistan[47]. In April 2005, as many as 21 agreements and MoUs were signed between the two countries. These included cooperation in economy, defence, energy, infrastructure, social sector, health, education, higher education, housing and various other areas. The two countries also signed a â€Å"Treaty of Friendship, Cooperation and Good Neighbourly Relations†[48]. In January 2006, the Early Harvest Programme was launched to encourage bilateral trade, under which China extended zero-rated tariffs on 767 items while Pakistan reciprocated by extending the facility on 464 items[49]. In November 2006, China and Pakistan signed a FTA (free trade agreement). As per the agreement, China and Pakistan would reduce the tariffs on all goods in two phases. The aim of the agreement is to eliminate tariffs on no less than 90 percent of products, both in terms of tariff lines and trade volume, within a reasonably short period of time and on the basis of taking care of the concerns of both sides[50]. The Early Harvest Programme, which had commenced in January 2006, was merged into the FTA[51]. Also, China vowed to help Pakistan in civil nuclear technology by building and helping in the Khusab Nuclear Programme providing technology to Pakistan for better maintenance of civil nuclear plants[52]. In 2009, Pakistan and China signed a number of agreements and MoUs. These included construction of Bunji Dam in the Northern Areas with a capacity of 7,000 Megawatts[53], provision of soft loans for space, space technology and alternate energy including an amount of U.S. $ 190 million to supply Pakistani satellite PAKSAT-1R, which will replace the present satellite PAKSAT-1 that has a useful life until 2011. This loan will cover 85 percent of project