The cost of being China’s friend The Statesman 20 Mar 18
Is China a genuine friend of Pak or is just claims to be. Its actions at the Financial Action Task Force (FATF) meeting prove it is exploiting Pak’s weakness to further its own agenda.
During initial discussions of the FATF, China, Saudi Arabia and Turkey withstood US pressure and were standing shoulder to shoulder with Pak, in preventing a US backed proposal from being approved. However, in a subsequent discussion, post US insistence, Saudi Arabia and China jumped the fence, leaving Turkey all alone supporting Pak. The result was Pak being placed on the ‘Grey’ list for not doing enough and possibly even the ‘Black’ list alongside North Korea and Iran, if it fails to submit a satisfactory proposal.
China justified its action by informing Pakistan that it ‘did not want to lose face’ by supporting a move which was doomed to fail. While Saudi Arabia, representing the Gulf Cooperation Council, was convinced by the US to change its stance, there are similar claims that India convinced China for the same, by promising to back it for the Vice Chair of the FATF, which would ultimately give it the chair.
China had never hesitated to support Pak in international forums earlier, whether it was blocking Indian entry into the NSG, claiming a similar status for Pakistan or in the UN Security Council (UNSC), where despite every other member seeking to declare Masood Azhar as a UN designated terrorist, China refused, employing its veto power. China like the rest of the world was aware that Pak was likely to be censured in the FATF, hence it could create for Pak a breathing space, thus enabling it to wriggle its way out in a couple of months, without being subjected to the humility of the Grey list.
China did nothing, neither pressurizing others, nor moving a motion in this regard. It supported Pak initially but changed stance rather fast. No nation, especially China, would suddenly turn its back towards a supposed ally, unless its seeks its own interests over that of Pak. If it could face the UNSC alone, refusing to buckle under any quantum of pressure in the Masood Azhar case, then the FATF should have been a cake walk. Immense international lobbying including from India and the US did not make China budge on admitting India into the NSC, then just an offer of the Vice Chairmanship from India may not alone have convinced it to do a volte face.
China was aware that Turkey was still holding ground and would not bend. For it to convince one more nation to join hands with it to block the move would not have been too difficult. The fact is that it announced its reasons to Pak after the meeting, not before, also indicates that it had ulterior motives. Chinese actions are always well thought out. It has never rushed nor changed stance easily, hence why now?
There are claims that China, when it dumps Pak in international forums, the earlier being the BRICS summit in 2017, seeks to convey a message to Pak, that it can only do so much and no more. Secondly, the same terror groups which it supported in the UNSC have criticized China for its policies on Moslems in the Xinjiang province. Reports of China negotiating with the Baluch Freedom Fighters for security of the CPEC and being in talks with the Taliban are indicative that it is slowly believing that Pak will not change its policies, which could haunt Chinese interests in the long term. It is also feasible, that when closed door interactions with Pak to change its terror support policies fails, then it adopts international forums to convey its displeasure. This could have been one such forum.
Behind all these possibilities are also issues of practicality and long-term goals. China is aware that Pak, despite its economy growing at over five percent is facing shortfalls of foreign exchange reserves. In a short span of three months, Pak was forced to borrow USD 1 Billion in two instalments of 500 Million each from the Industrial and Commercial bank of China at a high interest rate of 4.5% solely to maintain reserves. With it coming onto the ‘Grey’ list and increased pressure from the US and India, unless it acts, it would find international funding drying up.
This shortfall in funding would also impact its armed forces, mainly the army, as any government which steps in post the National Assembly elections in Jul, would need to balance national finances. This would drastically hamper their capability development forcing it to either solely bank on nuclear weapons to ward of Indian threat or turn towards China with a begging bowl.
This is where China would step in, possibly being the only nation, willing to invest in a troubled Pak. Its granting loans at high rates of interest would make the Pak economy totally dependent on it. Further, its military supplies to Pak, presently over 60%, would only increase. China also has no choice as it has already invested a substantial figure in Pak and cannot pull back now. Pak would akin to Zimbabwe, Sri Lanka, Maldives and Myanmar fall into the Chinese debt trap.
China has in one swoop has pushed Pak into a corner from which only it can extricate it. On the outside it would appear as a friend and a benefactor, while the truth is that it has forced Pak on its knees making it bank on Chinese high rate of interest loans to survive.
China is known to never support any nation, unless there is some return for it. It has never believed in granting largesse to nations, always loans. It has, despite claims of friendships ‘deeper than the oceans, higher than the mountains’ proved that its own interests come first, others be damned. If Pak still cannot see through the Chinese game, then it remains a victim of its own short sightedness.
About the Author
Maj Gen Harsha Kakkar
Retired Major General Indian Army