EDITORIAL: Foreign Minister Bilawal Bhutto-Zardari has urged China and the United States, the two most economically powerful countries in the world today, to set aside their differences and work together to improve global climate. There is overwhelming evidence of a seismic geopolitical shift within developed countries and the focus clearly is on one upmanship, be it in the form of sanctions or withdrawal from international climate treaties in spite of the devastating impact of climate change in 2022 – from a tinder dry Europe to flooding in Pakistan, parts of China and the US.

The world is getting increasingly polarized between the US-led West and China. And unlike in the past when China would back down from pressure especially from the US due to the US being its major export market yet there has been little appreciable decline in China’s trade surplus with the US in recent years. Data for January-July 2022 reveals that China’s trade surplus with the US was 234,493 million dollars against 353,493 million dollars January-December 2021.

China’s reserves were estimated at 13.4 months of imports, more than a year, in July 2022 while the US foreign exchange reserves were estimated at 35.9 billion dollars in July this year.

The ongoing war between Russia and Ukraine and consequent sanctions against Russia have seriously compromised the US and European capacity to check domestic inflation as well as Europe’s capacity to provide cheap electricity to its people though China has engaged with Russia to access cheap fuel. And while the US and the West are clearly struggling to bring domestic inflation down yet no such public pressure seems to be visible in China.

China is a time-tested friend of Pakistan and Bilawal Bhutto’s statement must be viewed not only in the context of an escalation in tensions between the two economic giants but also in the long term concern voiced repeatedly by the US during the Obama and Trump administrations as well that the 50 plus billion dollar projects under the China Pakistan Economic Corridor (CPEC) umbrella have increased the country’s indebtedness – a view that Anthony Blinken mentioned a day earlier when he stated that “I also urged our colleagues [Pakistan] to engage with China on some important issues of debt relief and restructure so that Pakistan can more quickly recover from the floods.” On the face of it Blinken’s advice is sound, however, three observations are in order.

First, CPEC was forged at a time when no foreign government or foreign investor was willing to engage in Pakistan. Therefore, there was no other option at the time. Secondly, CPEC projects were largely launched by the Chinese investors with state support in the form of financing.

While some of the projects were simply not appropriate, for example establishing a coal power plant in Punjab instead of near the source of coal to minimise cost as well as health hazards, or focusing on generation rather than on transmission network which was grossly inadequate, yet the onus of such decisions must surely rest with both parties and the Chinese partners seemed to have deferred to the wishes of their Pakistani counterparts in this respect.

One can only hope that Pakistani politicians acknowledge their lack of expertise in technical fields and, in future, take the experts on board before taking a decision on the project. And finally, China is traditionally reluctant to reveal the details of any assistance or investment in another country, like Saudi Arabia, and in addition extends loans as opposed to grant assistance.

Bilawal’s rejoinder to Blinken a day later was therefore appropriate as he urged other nations to do “something real and beneficial instead of passing unwarranted criticism against Pakistan-China cooperation.”

Pakistan’s relations with the US are clearly back on track, prompting Bilawal Bhutto to note that the good thing is we have been de-hyphenated by the US, previously it was AfPak or India-Pak but now its not, adding that he was “not just surprised but absolutely impressed with the approach US has towards Pakistan now.” This indeed is an approach that must be supported, not trashing time-tested friends while constantly engaging with all countries especially those where relations had recently soured.

Copyright Business Recorder, 2022

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Concerned Oct 04, 2022 09:59am
“China’s reserves were estimated at 13.4 months of imports, more than a year, in July 2022 while the US foreign exchange reserves were estimated at 35.9 billion dollars in July this year.” Sooo, you don’t state chinas $ value of reserves and rather give its equivalent months of import and for the US you do the opposite? At least keep comparisons standardized.
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