Celebrating sixty years of hallucinations

The Sino-Pak friendship, hailed as deeper than the oceans and higher than the Himalayas celebrated its 60th anniversary recently. A simple analysis would show that it is China whose economic rise is higher than the Himalayas and it is Pakistan whose self-inflicted problems happen to be deeper than the oceans.
After the May 2 incident, when Pakistan faced increasing isolation on the international front, the Chinese came with their diplomatic support, cementing the perception of the all-weather nature of Sino-Pak friendship.
Bilateral trade between the two nations reached $8.6 billion in 2010. Projects worth tens of billions of dollars in areas of economic and defence cooperation were announced during the recent visit of Pakistani premier to China and also during the visit of the Chinese premier to Pakistan in December 2010. However, there are big question marks over their implementation.
Simultaneously, Chinas economic ties with India have deepened in the last five years, with their bilateral trade crossing $60 billion in 2010.
Though Pakistan may not like this, China, like any other nation, has the right to pursue policies that are compatible with her economic and security interests in the region.
According to Heritage Foundation- a conservative US think tank- Chinas non-bond overseas investments totaled $218 billion during the years 2006 to 2010. The fact that Chinas investment portfolio is spread across the Americas, Eurasia, Africa and Australia implies that the country would go for good investments wherever they can find.
But when it comes to Pakistan, a country shunned by foreign investors for most part of the last decade, China still remains involved in multibillion dollar projects, both mega and small, in various sectors of the economy.
Similarly, an influx of Chinese workers in Pakistan has grown in recent years compared to the exodus of foreigners belonging to other countries due to the precarious law and order situation.
This attitude towards Pakistan could best be explained by Guanxi, a social value in the Chinese culture, which places greater emphasis on relationships, with a preference for doing business with friends rather than unknown people.
This is one of the reasons why Zong was the first overseas set up of China Mobile, the worlds largest telecom operator.
Yet some critics point out lack of transparency, substandard procurements and expensive financing arrangements in Pakistani governments contracts with Chinese corporations. However, even though Pakistan at times did end up with raw deals, on numerous occasions the Chinese have gone out of their way to support Pakistan as well.
Weak governance, lack of vision and questionable negotiation skills of successive Pakistani governments are partly to be blamed. Pakistans relationship with China has usually swung back and forth according to the highs and lows of relations with the US. China is caught in a balancing act in the South Asian region, where it is cozying up with India and others to counter the risk of greater US entrenchment. For Pakistan, this should mean a halt to using the mutual friendship as a convenient insurance against so-called Indian designs.
Given Pakistans frail economic situation, the proposed projects with the Chinese corporations hold a lot of promise at this time. Areas of cooperation include defence, trade, energy, education, transportation and agriculture. However, Pakistan must take concrete measures to take these projects beyond the MoU stage to extract substantial economic benefits in the medium-term.