STRATEGIC ANALYSIS

The China-Pakistan Strategic Relationship: Trade, Investment, Energy and Infrastructure

Sumita Kumar is Senior Research Associate at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
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  • September 2007
    Volume: 
    31
    Issue: 
    5
    Articles

    The traditional Sino-Pakistan friendship of 55 years now has a new objective—to improve the economic content of their relationship, which comprises trade, investment and energy co-operation within a bilateral framework. The result of this determination to implement the new economic agenda is visible in the quantum of Chinese investment in Pakistan. However, there are indications that the trade agenda may be too ambitious or needs a larger restructuring of the Pakistani economy that will take time since it requires implementation of policy changes combined with participation in these initiatives from the business community of Pakistan. While investment primarily benefits Pakistan, trade provides China access to a new market for its goods. It will eventually do the same for Pakistan. Energy co-operation will benefit China as it will gain access to energy supplies through Gwadar port, an alternate route to the one through the Malacca straits, and will serve to develop its western regions. Pakistan has in turn gained from the large-scale infrastructure development that has taken place in Gwadar and will continue to do so once future plans make headway.

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