Have China and Pakistan Hit a Roadblock?

Welcome to Foreign Policy’s South Asia Brief.

The highlights this week: China and Pakistan face potential setbacks in their long-standing bilateral relationship, South Asia rallies aid and solidarity in the wake of the devastating earthquake in Turkey, and a somber Sri Lanka marks 75 years since independence.

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Are China-Pakistan Ties Shifting?

Pakistani Prime Minister Shehbaz Sharif unveiled a new Chinese-designed reactor at the Karachi Nuclear Power Plant last week. Construction of the $2.7 billion unit was funded by China as part of a project to refurbish the facility and strengthen Pakistan’s energy security. But the reactor is one of few new Chinese-backed infrastructure projects Pakistan has completed in recent years, despite its long-standing cooperation with China.

Work on the new reactor began in 2016, shortly after the formal launch of the China-Pakistan Economic Corridor (CPEC), part of Beijing’s Belt and Road Initiative. Although both sides have recently engaged in public rhetoric about injecting fresh momentum into CPEC, the reality on the ground is that Pakistan has been slow to complete infrastructure projects and China has been slow to fund new ones.

The slowing pace of CPEC projects stems in part from Pakistan’s ongoing economic crisis—it increasingly cannot afford infrastructure loans—as well as Beijing’s own economic slowdown. When Sharif visited Beijing last November, he formally requested a rollover of $6.3 billion in debt. China hasn’t indicated if it will grant the request, even as it announced a two-year debt moratorium for Sri Lanka. (Pakistan’s finance minister has claimed that China will roll over more than $4 billion in Pakistani debt, but Beijing has not confirmed this.)

But the infrastructure slowdown is just one sign of a potential setback in China-Pakistan ties. On the diplomatic stage, observers noted last year that China didn’t oppose India’s move to exclude Pakistan from a high-level meeting on the sidelines of a virtual so-called BRICS summit that included other emerging economies. In the past, China—which hosted the event—might have stepped in to help Pakistan. Some analysts have argued that Beijing views the current Pakistani government as too unstable to be a viable partner.

Chinese officials are also increasingly worried about security risks in Pakistan, which is experiencing a concerning uptick in terrorism. A few recent attacks have targeted Chinese investments and nationals in Pakistan—including at a dental clinic in Karachi last September, a Confucius Institute in Karachi last April, and a luxury hotel in Baluchistan hosting a senior Chinese delegation in 2021. After Sharif met Chinese President Xi Jinping in Beijing last November, a Chinese foreign ministry statement noted that Xi had “expressed his great concern about the safety of Chinese nationals in Pakistan.”

However, it would be misguided to think that the China-Pakistan relationship is in serious trouble. Chinese loans keep flowing into Pakistan—although not all for infrastructure projects. Pakistan received nearly $22 billion in short-term loans from China between 2018 and last summer, most for balance of payments relief. This shows Beijing is willing to try to ease Islamabad’s economic stress. Last June, China authorized a new $2.3 billion loan at a discounted interest rate.

China’s own economic struggles mean that sustained support at this level is no guarantee, especially as Pakistan’s crisis continues to worsen. Last month, inflation reached its highest level since 1975; its foreign reserves currently cover less than three weeks’ worth of imports. On Thursday, Islamabad announced that the most recent round of talks with the International Monetary Fund had failed to produce an agreement to release new funds.

China may prefer to engage with a more stable government in Islamabad. But then again, it has a rapport with Sharif’s family; the current prime minister’s brother Nawaz Sharif also served as prime minister when CPEC was formally launched. The previous government led by Imran Khan didn’t endear itself to China either, calling for a review of past CPEC agreements in the name of anti-corruption efforts. At any rate, Pakistan’s powerful military has the final word on policy decisions regarding key partners, such as China.

Current geopolitics make a continued alliance between China and Pakistan inevitable. Growing U.S.-India security ties unite Beijing and Islamabad in concern over their common rival, New Delhi. Increasing U.S.-China competition puts limits on cooperation between Pakistan and the United States, extending Islamabad’s reliance on Beijing for economic and military assistance. Pakistan’s own push for a greater partnership with Russia comes amid a deepening China-Russia alliance.

Even the closest partnerships experience bumps, but the China-Pakistan relationship has guardrails to keep it from veering too far off track.

As geopolitics shift, FP columnist C. Raja Mohan argues this week that the West should bring India into the G-7 to bridge north-south divides and help New Delhi effectively deal with challenges from China.

Countries rally earthquake support. Bangladesh, India, and Pakistan are among the countries sending assistance to Turkey after its recent devastating earthquake, which has killed more than 20,000 people in the country and in neighboring Syria. On Tuesday, Turkey’s ambassador to Bangladesh told local media there that the country has agreed to send search and rescue as well as medical teams. Indian rescue and relief workers had already arrived. Pakistan also sent rescue workers and supplies to Turkey, a close partner.

Islamabad initially announced that Sharif would visit the country on Wednesday, but the trip was postponed. Some Pakistanis questioned why top officials would travel to Turkey given that their own country is on the brink of economic collapse. Other nations across the region have issued messages of solidarity and support to Turkey and Syria, including Nepal—which experienced its own catastrophic earthquake in 2015.

Conflict and sanctions have complicated global efforts to get aid to northwest Syria, but India has managed to deploy four aircraft with relief supplies to the country.

Former Pakistani President Pervez Musharraf salutes as he arrives at his residence in Islamabad on April 15, 2013.

Former Pakistani President Pervez Musharraf salutes as he arrives at his residence in Islamabad on April 15, 2013.

Former Pakistani President Pervez Musharraf salutes as he arrives at his residence in Islamabad on April 15, 2013.AAMIR QURESHI/AFP via Getty Images

Musharraf receives state funeral. Pakistan held a state funeral on Tuesday for former President Pervez Musharraf, who died Sunday in Dubai, where he spent most of the last decade. As Army chief, Musharraf seized power in a coup in 1999 and led Pakistan until 2008, when he stepped down following protests in response to his suspension of the constitution. Before his health deteriorated, Musharraf had established a new party and contemplated returning to Pakistan to make a political comeback but was dogged by legal charges.

Although he was a controversial figure, leaders from all of Pakistan’s major political parties and several former military leaders attended Musharraf’s funeral. It’s also notable that the current government agreed to hold a state funeral for him; after all, Shehbaz Sharif’s brother Nawaz Sharif was overthrown in the 1999 coup that catapulted Musharraf to power. It ultimately underscores the respect that Pakistan still confers to the military, which has taken hits to its popularity in recent months.

Sri Lanka marks 75th anniversary, gloomily. Last Saturday, Sri Lanka marked the 75th anniversary of its independence with a military parade and speech from President Ranil Wickremesinghe. But the mood was not so celebratory; Sri Lanka is still reeling from its worst-ever economic crisis. Wickremesinghe himself acknowledged that “we have reached the point of destruction.” Some religious leaders led a boycott against the festivities while other activists voiced their anger about a bankrupt country spending money on a celebration.

Despite the recent debt moratorium offer from China, Sri Lanka’s economy remains severely strained. Inflation currently sits at 59 percent, and Colombo has failed to reach a formal bailout agreement with the International Monetary Fund.

This week, the Taliban disclosed that Saudi diplomats have relocated from their embassy in Kabul to Islamabad. The Taliban administration said the officials left for training, but their foreign ministry also indicated that the Saudi Embassy had closed on Feb. 2 due to threats of a possible attack from the Islamic State-Khorasan. Turkey and the United Arab Emirates have also announced plans this month to downsize their missions in Kabul out of security concerns.

Sources told Foreign Policy that concerns about Taliban policies may also be behind the moves. For the Taliban leaders in Kabul who seek formal recognition for their regime and value international engagement—as opposed to hard-liners in Kandahar—these developments are bad news. The Taliban have cordial ties with Turkey, Saudi Arabia, and the UAE, which struck a deal last year to provide security at Hamid Karzai International Airport in Kabul.

The shift could lead the Taliban to place even more importance on their relationship with China, which has an open embassy in Kabul and inked an oil deal with the regime last month. Still, the Islamic State-Khorasan claimed an attack against Chinese nationals last December, and the Taliban can’t take China’s continued diplomatic presence for granted.

FP’s Most Read This Week

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How a Chinese Spy Balloon Blew Up a Key U.S. Diplomatic Trip by James Palmer

Ukraine Braces for Grisly Russian Offensive in the East by Amy Mackinnon and Jack Detsch

Writer Mehjabin Bhanu identifies confidence-building measures to help Pakistan and Bangladesh improve a long-tense relationship in Pakistan Today. “[P]eople-to-people contact, religious tourism, scholarship exchange, and so on, can be potential sectors to explore to promote better understanding and mutual empathy between the two peoples,” she writes.

In the Print, former agriculture official Siraj Hussain warns that India’s new budget cuts funding for three key initiatives critical for fighting food price inflation. “One hopes that management of food inflation in 2023-24 will not suffer due to reduced allocations under schemes which have been used in the past to check inflationary trends,” he writes.

A Dhaka Tribune editorial lays bare the growing dangers of river pollution in Bangladesh. It argues that the “onus is on the authorities concerned to identify those who are most responsible for the slow death of our rivers, which are oftentimes powerful and influential individuals and parties out for personal gain at the expense of everyday Bangladeshis and our natural resources.”

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