The history of China and Pakistan’s well-established, principled, and long-lasting partnerships based on cooperation extends back to the earliest years when Pakistan was one of the first major nations to recognize the People’s Republic of China.
This ‘time-tested and all-weather’ camaraderie is founded on the solid pillars of socioeconomic cooperation between the two countries. After the signing of the Free Trade Agreement in 2006, whereby both countries agreed to abolish tariffs on several products, China has become Pakistan’s largest trading partner, continuing the country’s legacy of trust and cooperation.
In a similar vein, the China-Pakistan Economic Corridor (CPEC) is a multibillion-dollar infrastructure-development project consisting of a network of highways, railways, pipelines, special economic zones, and power plants, among other initiatives.
A consortium of Chinese investors, comprising the China Financial Futures Exchange, Shanghai Stock Exchange, and Shenzhen Stock Exchange, has acquired up to 40 percent of the Pakistan Stock Exchange (PSX).
Due to incompatibilities between the socio-economic structures of China and Pakistan, Pakistan has not been able to reap significant benefits from its relationship with China, despite their close connections.
Despite these developments, Pakistan has not been able to translate these efforts into sustainable partnership programs that could attract additional foreign direct investment (FDI), portfolio investment, technology transfer, and knowledge exchange between the two countries.
Several multifaceted obstacles at the state-to-state, business-to-business, and people-to-people levels have impacted the economic cooperation between the two nations.
Regarding the state-to-state structural crisis, infrastructure deficiencies are of initial concern to Pakistan’s economic policymakers. The nation must improve its transportation, energy, technical and knowledge expertise, and communication infrastructure.
The colonial character of Pakistan’s administrative structure and the Western orientation of the majority of bureaucrats (as evidenced by their dual Western nationalities and academic degrees from Western institutions) are also among the significant limiting factors.
Deng Xiaoping’s revolutionary reforms of 1978, on the other hand, entirely transformed the nature of Chinese bureaucracy. According to a famous Deng Xiaoping quote, it does not matter whether the animal is white or black. Cats are fine so long as they can catch mice.
Consequently, regardless of whether their counterpart is socialist or capitalist, the Chinese have become result-oriented. Some delays in CPEC project implementation by Pakistan’s administrative and legal institutions irritated these outcome-oriented Chinese.
Terrorism in Pakistan, with its grave security implications, is most likely the most crucial issue for both nations. Due to the historical origins of terrorist organizations in neighboring regions, Pakistan’s western frontier is the most vulnerable and perilous. These organizations have proven themselves to be grave threats to Chinese investors, engineers, and employees.
On the political front, political parties can facilitate diplomatic relations between the two countries by utilizing appropriate communication channels. It can contribute to a deeper understanding of the subject matter among these nations, thereby enhancing their level of cooperation.
Sadly, no significant political party in Pakistan has any socialist traditions, values, or principles. In contrast, due to its central position in decision-making, the Chinese Communist Party (CCP) is the ultimate socialist platform with which to deal.
As a member of the South Asia Treaty Organisation, Pakistan has historically served as the vanguard state for capitalist powers against communist regimes in Asia.
Additionally, Pakistan has a lengthy history of military coups and authoritarian regimes, which have consistently suppressed left-leaning political parties and their agendas.
Poverty, inequality, corruption, mismanagement, and underdevelopment have created a fertile environment for populist leaders and movements in Pakistan. These leaders and parties manipulate the sentiments of the populace through the use of popular slogans claiming to be the only solution to all of the prevalent issues. This knowledge leads one to the conclusion that Pakistan must engage China on the political front, as this is the only pragmatic solution.
State-owned enterprises (SOEs) and the private sector serve as two developmental platforms for China’s economy. Former are government-controlled organizations with national goals and objectives that play a crucial role in the economic development and social stability of a nation.
SOEs are dominant in sectors such as energy, transportation, and telecommunications, but they have not yet made significant strides in digital technology and e-commerce.
On the other hand, Pakistan’s IT industry and academic institutions are facing a severe crisis due to a scarcity of necessary equipment and qualified personnel. As a result, Pakistan is incapable of developing a digital economy.
China’s private sector is dominated by firms with a strong presence in electronics, electrical, textile, technology, and e-commerce. These businesses include Alibaba, Tencent, Huawei, and others.
Comparatively, the private sector of Pakistan is unable to make a significant contribution through product and process innovation. In contrast, China has provided India with a substantial quantity of FDI over time.
Last but not least, it is essential to discuss the issues surrounding human contact. A significant barrier to establishing such contact between the people of the two countries is the language barrier.
Even though English can serve as a mediator of communication, the effective exchange of ideas for the development of mutual understanding remains a challenge.
Both China and Pakistan are home to numerous religious ethnicities with distinct spiritual paradigms. Pakistani society must be imbued with pluralistic perspectives regarding the values, ideas, and religious perspectives of other nations. The absence of such pluralistic attitudes makes it harder for Chinese citizens to feel safe in Pakistan. Consequently, it influences their propensity to visit and develop relationships with the locals.
Due to the direct effect of these obstacles, Pakistan has not benefited significantly from its neighbor, despite its relations with the $17.73 trillion economy.
