The small town of Gwadar, for example, was a forgotten end of the earth, filled with dust-colored cinder-block houses that lined trash-strewn streets and ringed by cliffs, desert and the Arabian Sea. Yet this sleepy fishing town has erupted with development over the past few years. A Chinese delegation inaugurated its sparkling new container port in early April, as part of a deal by which China will build and have rights over the port.
China has agreed to spend an extraordinary $46 billion in investment throughout Pakistan, far more than the annual U.S. aid budget for the entire world. This is now Beijing’s biggest commitment to any one country. Pakistan is also the largest recipient of Chinese weapons, and Beijing increasingly relies on it to help contain militants in China’s western provinces.
Pakistan holds a unique position in Chinese diplomatic circles. The Chinese state media describes Pakistan as China’s only “all-weather strategic cooperation partner.” Though it is the largest beneficiary of Beijing’s investment, it is not a client state, as North Korea is. Rather, in a neighborhood where many countries either distrust China, feel beholden to it or both, Pakistan is the closest thing to a real ally and friend that Beijing possesses.
This means that China and Pakistan sometimes cooperate in ways that concern the United States and India. Washington and New Delhi worry that all this largesse will bring Pakistan firmly into China’s orbit. With subtle diplomacy, however, all four countries may be able to create a workable balance.
The Gwadar port is just one example of China’s “One Belt, One Road” initiative. This effort is by far the most spectacular example of Beijing’s strategic policy of combining aid, trade and foreign direct investment to build goodwill, expand its global political sway and secure the natural resources it needs to grow.
Declaring that the Chinese-Pakistani friendship is “sweeter than honey,” and “stronger than steel,” Beijing announced last year that it would finance a 1,800-mile-long superhighway and a high-speed railway from the Arabian Sea over the Himalayas to China’s Xinjiang province. In addition, it would fund an oil pipeline route to the inland Chinese city of Kashgar. This network of infrastructure, including the Gwadar port, would help Pakistan grow, while pushing back against the growing power of regional competitors like India.
Helping Pakistan so dramatically also fits into China’s overall economic strategy. With a deep-sea port in the Arabian Sea and a land route to remote western China, some of Beijing’s Middle Eastern oil could travel the short route through Pakistan, instead of 6,000 miles through the Malacca Straits to Shanghai. That’s the route more than 80 percent of China’s oil and natural resources now have to take.
The infrastructure projects allow China to invest its large, if dwindling, foreign currency reserves, and also buy goodwill with its neighbours. Chinese state-owned companies get additional work, and the many energy projects that are part of the deal offer strong financial returns.
Chinese engineers have already begun digging tunnels and building bridges to improve safety along the legendary Karakoram highway, one of the highest paved roads on earth, which links Pakistan to China. In addition, China is Pakistan’s largest trading partner and allows Pakistan special trade preferences.