World Economy

Xi to Announce $46b China Investment in Pakistan

Xi to Announce $46b  China Investment in PakistanXi to Announce $46b  China Investment in Pakistan

 China’s president, Xi Jinping, travels to Pakistan on Monday laden with tens of billions of dollars in infrastructure and energy assistance on a scale the United States has never offered in the past decade of a close relationship, a gesture likely to confirm the decline of American influence in that nation.

Xi will unveil investments worth $46 billion. The move is being seen as Beijing's attempt to increase its influence in Asia.

"Pakistan, for China, is now of pivotal importance. This has to succeed," Mushahid Hussain Sayed, chairman of the Pakistani parliament's defense committee told Reuters news agency about the partnership.

Xi's two-day-long visit would include a speech in Pakistan's parliament and announcements related to the China-Pakistan Economic Corridor (CPEC), which would link Pakistan's southern Gwadar port on the Arabian Sea with China's western Xinjiang region. Pakistan transferred control over Gwadar to a Chinese public company in 2013.

The CPEC also included plans to create a road, rail and oil pipeline links which would shorten the distance from China to the Middle East. China would invest about $34 billion in energy projects, Ahsan Iqbal, Pakistan's minister for planning and development told journalists.

"The real opportunity of this China-Pakistan Economic Corridor is that it changes the scope of the relationship from geopolitics to geoeconomics," Iqbal argued, adding that the projects would have a "significant transformative effect on Pakistan's economy."

Assistance Much Bigger Than US'

“The Chinese are stepping in, in a much, much bigger way than the United States ever contemplated,” said Jahangir Tareen, a Pakistani businessman, and the secretary general of the Pakistan Tehreek-e-Insaf party. “The assistance is far, far more than the United States government offered under the United States Agency for International Development.”

China's expanded investment in Pakistan is being seen as one of its attempts to increase its dominance in Asia and offset US and Indian influence. This is the first visit by a Chinese head of state to Pakistan in the last nine years.

In 2013, Pakistan's Prime Minister Nawaz Sharif visited Beijing to seal important energy deals. China's investment has raised hope among Pakistan's people, but first problems like jihadist violence and improving infrastructure need to be tackled.

Just as the United States sought to stabilize Pakistan during the war in Afghanistan, so China wants to prevent the spread of militant groups in Pakistan into Xinjiang, the far western region of China with a large Muslim population.

Washington tried to encourage the Pakistani government to try to stop terrorist groups from crossing the border into Afghanistan and attacking American troops, in part, by sending assistance intended to revive the gasping economy.

In advance of his trip, Xi wrote in a column distributed to the Pakistani news media over the weekend: “We need to form a ‘1+4’ cooperation structure with the Economic Corridor at the center and the Gwadar Port, energy, infrastructure and industrial cooperation being the four key areas to drive development across Pakistan and deliver tangible benefits to its people.”

Financial Commitment

To do better than the United States, the Chinese have come up with a much larger financial commitment — and it is focused on a specific area, it has a signature infrastructure focus and it is a decades-long commitment.

The Chinese Foreign Ministry said on Friday that the projects in Pakistan would be the first initiatives of the $40 billion Silk Road Economic Belt and Maritime Silk Road plans, an ambitious network of roads, rails and ports designed to link China to Europe through Central Asia and Russia, and announced with considerable fanfare by Xi in November.