By Zafar Nawaz Jaspal
Minister Imran Khan’s third visit to China, along with army chief General Qamar
Javed Bajwa, apprised both President Xi and Premier Li of his government’s
initiatives to facilitate and secure Chinese investments, expedite work on
China-Pakistan economic projects, and emphasized his desire to alleviate
tensions with India.
The timing of Khan’s China visit was crucial due to three reasons. First, the China Pakistan Economic Corridor’s (CPEC) early harvest projects are near completion, and the second phase is about to start. Besides, Khan’s government desires more investment in various new economic projects, including the refurbishing of Pakistan Steel Mills, the construction of a $9 billion Main Line-I railway track (Karachi to Lahore), the overland LNG terminal, the 7,000-megawatt Bunji hydropower project, and increasing the capacity of the Karachi-based Pakistan Refinery Limited.
Although CPEC is a flagship project of China’s Belt and Road Initiative, it requires Islamabad’s continuous efforts to ensure the funds are made available for the second phase of operations. The sluggish behavior of the provincial governments in the development of the infrastructure of special economic zones has delayed the relocation of the Chinese industry in Pakistan and also created misconceptions about the government’s seriousness in CPEC projects.
Critics say the projects are in jeopardy due to the government’s lethargic attitude toward the process of implementation and a few cabinet members’ biased criticism of the previous government’s tenure work on the project. Nevertheless, current cabinet members have been struggling to ease Chinese investors’ concerns and to attract more Chinese financing.
Tuesday, Pakistan’s President Arif Alvi promulgated two ordinances that give
income tax, sales tax and customs duties’ exemptions to Gwadar Port and Gwadar
Free Zone — slated to be the crown jewel of the CPEC — and this should
motivate Chinese companies to invest in the international seaport and other
developmental projects. The ordinances were the “CPEC Authority Ordinance,
2019” and the “Tax Laws (Amendment) Ordinance, 2019.”
The role of the CPEC Authority should be instrumental in attracting more Chinese and third party finances in new CPEC projects, particularly in Gwadar. According to the ordinance, “the Authority shall be primarily responsible for coordination, monitoring, and evaluation to ensure implementation of CPEC related activities.”
So far, Chinese investors have expressed their severe reservations about the bureaucratic hurdles, lethargic approval processes and red-tape in the implementation of their projects. It will be the Authority’s job to ensure coordination among the various departments and guarantee uninterrupted progress on CPEC projects, as well as facilitating and overseeing work on projects in which a third country is involved besides Islamabad and Beijing.
Additionally, General Bajwa’s presence in the meetings was an assurance of the Pakistan army’s commitment toward providing security to the Chinese workforce employed in Pakistan. In 2016, the army raised a separate security division to provide foolproof security to CPEC projects and Chinese nationals — which have been a target of militant violence in the past.
Second, Islamabad needs Beijing’s support in getting relief from the Paris-based terror financing watchdog, the Financial Action Task Force (FATF), which will review Pakistan’s progress in Paris during the next week. The upcoming meeting of FATF is crucial for Pakistan because it will determine whether the country remains on or exits the graylist or moves to the blacklist. India, as a co-chair of the Asia-Pacific Joint Group, has been committed to putting Pakistan on the blacklist, and Pakistan desperately requires the vibrant support of China on the issue.
Third, Khan, no doubt endeavored to ensure Chinese support in relieving the Kashmiris’ plight from appalling conditions in Indian-administered Kashmir- and has achieved some success in this dimension, seeing China’s pro-Pakistan statements on Kashmir on Thursday. China too remains uncomfortable with the Modi government’s decision to revoke the region’s special status on Aug. 5, an area which included a Buddhist-dominated part of Kashmir.
On Oct. 11, President Xi will have his second informal summit with Prime Minister Modi in the Southern Indian Tamil Nadu town of Mamallapuram. Already, China’s pro-Pakistan stance has irked the Indian leadership and drawn out a defensive response from Delhi’s foreign ministry. Perhaps during the summit, the Chinese President could apply diplomatic influence on Modi to end the curfew in Indian-administered Kashmir and help in restarting a dialogue with Pakistan, which is imperative for decreasing tensions between the nuclear-armed rivals.