China-Pakistan economic ties could change ‘fundamentally’ if attacks on Chinese continue


Economic ties between China and Pakistan could slide into a “fundamental change” if attacks on Chinese citizens and investments in the South Asian country continue to grow , according to observers.

While there are signs of more direct Chinese involvement in Pakistan’s counterterrorism efforts since the deadly attack outside Jinnah International Airport in Karachi earlier this month, any help is likely to remain low key, they say.

In the wake of the blast, which killed two Chinese workers, China’s Ministry of State Security called for better early warning systems in areas with significant Chinese interests, as well as better collaboration on intelligence and law enforcement.

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The latest attack also led to renewed calls in China for a greater security presence in Pakistan, such as trained personnel to protect Chinese construction projects and workers.

Attacks targeting Chinese citizens and investments in Pakistan have been on the rise in recent years, with seven people killed in two incidents this year alone.

However, a stronger Chinese security presence was unlikely, because of Islamabad’s reluctance to have China too involved in its security systems, the experts said.

When Chinese Premier Li Qiang visited Pakistan in October – less than a fortnight after the airport attack – he brought security pacts for the provision of bulletproof vehicles and firefighting trucks.

However, the previously reported joint security company initiative – which allows China to deploy protective personnel in Pakistan – was not mentioned, according to Pakistan’s English-language newspaper The Express Tribune.

Commenting on the security pact signed during Li’s visit, Chinese foreign ministry spokeswoman Mao Ning said China was “willing to help Pakistan strengthen its counterterrorism capacity” and “create a safe environment for bilateral cooperation”.

Zhu Yongbiao, a professor at Lanzhou University’s school of politics and international relations, warned that China’s investments faced a critical bottleneck as security worsened in Pakistan, particularly in Balochistan province.

“Since the United States withdrew from Afghanistan with the Taliban regime gaining power, Pakistan’s security situation has seen a significant decrease, it is pretty clear,” he said.

“Though the attacks can directly impact on [Chinese investment], the overall investment will not be seriously affected for now. However, if the security situation in [Balochistan] continues to deteriorate, it will definitely have a greater impact on Chinese investment and at some point, there may be a fundamental change.”

Pakistan is one of the most crucial investment destinations for China’s massive Belt and Road Initiative infrastructure scheme.

The China-Pakistan Economic Corridor (CPEC) – a flagship belt and road project – has seen more than US$65 billion in Chinese investment, including the landmark Gwadar Port, which gave China access to the Arabian Sea.

However, China’s growing investment in Balochistan in Pakistan’s southwest, has been branded as exploitation of local resources – especially by the region’s separatist Balochistan Liberation Army (BLA).

According to Lin Minwang, deputy director of Fudan University’s Centre for South Asian Studies, it is “highly possible” that China will seek counterterrorism capacity-building in Pakistan.

“In recent years, there has been no significant reduction in the number of terrorist attacks on Chinese personnel and Chinese projects in Pakistan, which shows that Pakistan saw real capacity deficits and real-life dilemmas in countering terrorism.”

Lin added that China’s experience in counterterrorism might be able to help Pakistan’s response to the situation.

Gwadar Port in Pakistan’s southwest is a landmark project in the China-Pakistan Economic Corridor (CPEC), centrepiece of China’s massive infrastructure investment programme the Belt and Road Initiative. Photo: Xinhua

But Abdul Basit, an associate research fellow at the S. Rajaratnam School of International Studies in Singapore’s Nanyang Technological University, said Pakistan would only accommodate Beijing’s security presence within certain limits.

“[Pakistan] won’t allow China to operate outside of the Pakistani security framework ... whether [China] are forming their security forces or whether they are from private companies, they will be the inner layer of the security, and Pakistani troops will be the outer layer of security,” he said.

“Whether Chinese [security] people can hold guns and escort Chinese people on the streets ... is [that] going to happen? I think that will take a lot of time. That is, I don’t see that happening any time soon.”

China faces multiple obstacles to the deployment of security personnel in Pakistan. Chinese citizens cannot legally carry weapons overseas, especially guns, and most of its companies rely on the local police and military for help.

According to a Nikkei Asia report in September, the joint security companies framework negotiated between the two countries stipulates that Chinese personnel will only “be in the inner cordon for protection of Chinese nationals”.

Basit pointed out that at least three types of agreements had been reached between China and Pakistan: for joint investigations of any attacks, for Chinese training for Pakistani troops in counterterrorism, and for Chinese help “in the form of specialised equipment against terrorists”.

However, it would certainly not be helpful if China’s security presence in Pakistan was high-profile, Basit added.

“If Chinese forces come into Pakistan to protect Chinese nationals, they are likely to become targets instead of truly providing security,” he said, citing China’s limited knowledge of Pakistani culture and society.

Lanzhou University’s Zhu noted that despite the unprecedented controversy between China and Pakistan over security issues, “the impact on cooperation at the governmental level remains modest at the moment”.

“China-Pakistan cooperation is carried out in a very complex environment, so [China] anticipates all kinds of possible difficulties, and it’s the same with other countries, such as African countries,” he said.

According to its consulate in Hong Kong, Pakistan had nearly US$700 million in net Chinese investment last year, up more than 16 per cent compared to 2022. But it was still only about half the level of investment made in 2018.

Lin, from Fudan University, shared Zhu’s assessment and said the large government-to-government cooperative projects were not the most affected.

“The scale of China’s investment in Pakistan over the past few years is not comparable to before, but that has more to do with the fact that construction of the CPEC is now entering a cycle of smaller projects than with the issue of terrorist attacks alone,” Lin said.

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