Importance of China

Over the millennia, China has fought hundreds of wars. It has conquered its neighbours, and been conquered by them in turn. Early Chinese explorers sailed all the way to Africa; today, China’s space program continues this tradition of exploration. The People’s Republic of China is the second-largest country in the world by land area after Russia China has the longest combined land border in the world, measuring 22,117 km (13,743 mi) from the mouth of the Yalu River to the Gulf of Tonkin. China borders 14 nations, more than any other country except Russia, which also borders 14.

China extends across much of East Asia, bordering Vietnam, Laos, and Burma in Southeast Asia; India, Bhutan, Nepal and Pakistan in South Asia; Afghanistan, Tajikistan, Kyrgyzstan and Kazakhstan in Central Asia; a small section of Russian Altai and Mongolia in Inner Asia; and the Russian Far East and North Korea in Northeast Asia. China’s border with India is disputed, and was a key cause of the 1962 Sino-Indian War. Additionally, China shares maritime boundaries with South Korea, Japan, Vietnam, the Philippines and Taiwan.

The PRC and the Republic of China (Taiwan) make mutual claims over each other’s territory and the frontier between areas under their respective control is closest near the islands of Kinmen and Matsu, off the Fujian coast, but otherwise run through the Taiwan Strait. The PRC and ROC assert identical claims over the entirety of the Spratly Islands in the South China Sea, and the southernmost extent of these claims reaches James Shoal, which would form a maritime frontier with Malaysia. Over the past 25 years, China has had the fastest-growing major economy in the world, with annual growth of more than 10 per cent.

Nominally a socialist republic, since the 1970s the PRC has remade its economy into a capitalist powerhouse. Industry and agriculture are the largest sectors, producing more than 60 per cent of China’s GDP, and employing over 70 per cent of the work force. China exports $1. 2 billion U. S. in consumer electronics, office machinery, and apparel, as well as some agricultural produce each year. Per capita GDP is $2,000. The official poverty rate is 10 per cent. China and the world economy The world is witnessing a shift in the balance of power, from the West to the East.

This shift will take place over decades, and the winners will be,Those economies that have financial clout, such as China. Those economies that have natural resources, whether it be energy, commodities or water, and will include countries, some in the Middle East, some across Africa, Brazil, Australia, Canada and others in temperate climates across, for instance, northern Europe. And the third set of winners will be countries that have the ability to adapt and change. Even though we are cautious about growth prospects in the U. S. and UK in the coming years, both of these have the ability to adapt and change.

China is at the center of this shift. The scale and pace of change in China is breathtaking. Against this backdrop of dramatic change, let me look at China’s impact on the global economy, especially in the aftermath of the financial crisis. It is now clear that the financial crisis was a result of three key factors: an imbalanced global economy; a systematic failure of the financial system in the West; and a failure to heed the many warning signs. Another important global impact is the importance of China in helping world trade, investment and financial flows.

Over the last decade the three words seen most regularly were “Made in China”. Over the next decade the three most common words might be “Owned by China”. China’s stock of overseas direct investment is one-thirtieth of that of the USA. The stock of foreign direct investment in China far exceeds the total amount China has invested overseas. Last year, China’s investment overseas was $50 billion. Now this is changing. Chinese firms are taking advantage of a strong rennin and of strategic backing from Beijing to expand overseas purchases.

The impact of China on global commodities is already evident. China’s rapid growth and its strategic needs saw it accumulating increasing amounts of commodities. For instance, it accounts for about one-third of global demand for aluminium and copper, and as much as 38 per cent for zinc. In the first half of this year there has been stockpiling by China of a range of commodities. This stockpiling could be explained by many factors, including the strength of the Chinese yuan and the weakness of commodity prices. In future years one would expect this to continue.

And it will not just be metals. Demand for food and soft commodities will be important. As incomes rise, food tastes will change. Furthermore, 28 per cent of Europe’s land is arable, while this figure is 19 per cent for the U. S. , but for China it is only 10 per cent. As a result, China will not only buy commodities, but it will also invest in countries producing commodities. This will reinforce the new corridors of increasing trade and investment flows between China and Africa, Latin America and the Middle East.

List of ports in China China coastal ports enable the transportation of coal, containers, imported iron ore, and grain; roll-on-roll-off operations between mainland and islands; and deep-water access to the sea. In port construction, China has especially strengthened the container transport system, concentrating on the construction of a group of deep-water container wharves at Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Xiamen and Shenzhen, and thus laying the foundations for China’s container hubs.

A new deep-water port has opened in Yangshan SW of Shanghai. The coal transportation system has been further strengthened with the construction of number of coal transport wharves. In addition, wharves handling crude oil and iron ore imports have been reconstructed or expanded. At the end of 2004, China’s coastal ports had over 2,500 berths of medium size or above, of which 650 were 10,000-ton-class berths; their handling capacity was 61. 5 million standard containers for the year, ranking first in the world.

Freight volumes handled by some large ports exceed 100 million tons a year; and the Shanghai, Shenzhen, Qingdao, Tianjin, Guangzhou, Xiamen, Ningbo and Dalian have been listed among the world’s top 50 container ports. 130 of China’s 2,000 ports are open to foreign ships. The major ports, including river ports accessible by ocean-going ships, are Beihai, Dalian, Dandong, Fuzhou, Guangzhou, Haikou, Hankou, Huangpu, Jiujiang, Lianyungang, Nanjing, Nantong, Ningbo, Qingdao, Qinhuangdao, Rizhao, Sanya, Shanghai, Shantou, Shenzhen, Tianjin, Weihai, Wenzhou, Xiamen, Yangzhou, Yantai, and Zhanjiang. China–Pakistan relations

China–Pakistan relations began in 1950 when Pakistan was among the first countries to break relations with the Republic of China on Taiwan and recognize the PRC. Relations between Pakistan and China are very brotherly. Following the 1962 Sino-Indian War, both countries have placed considerable importance on the maintenance of an extremely close and supportive relationship. [1][2][3] Since then, the two countries have regularly exchanged high-level visits resulting in a variety of agreements. The PRC has provided economic, military and technical assistance to Pakistan and each considers the other a close strategic ally.

Bilateral relations have evolved from an initial Chinese policy of neutrality to a partnership that links a smaller but militarily powerful Pakistan, partially dependent on China for its economic and military strength, with China attempting to balance competing interests in the region. Diplomatic relations were established in 1950, military assistance began in 1966, a strategic alliance was formed in 1972 and economic co-operation began in 1979. China has become Pakistan’s largest supplier of arms and its third-largest trad¬ing partner.

Recently, both nations have decided to cooperate in improving Pakistan’s civil nuclear power sector. [8] Favorable relations with China is a pillar of Pakistan’s foreign policy. China supported Pakistan’s opposition to the Soviet Union’s intervention in Afghanistan and is perceived by Pakistan as a regional counterweight to NATO and the United States. China and Pakistan also share close military relations, with China supplying a range of modern armaments to the Pakistani defense forces. China supports Pakistan’s stance on Kashmir while Pakistan supports China on the issues of Xinjiang, Tibet, and Taiwan.

Military cooperation has deepened with joint projects producing armaments ranging from fighter jets to guided missile frigates. Chinese cooperation with Pakistan has reached economic high points, with substantial Chinese investment in Pakistani infrastructural expansion including the Pakistani deep-water port at Gwadar. Both countries have an ongoing free trade agreement. Pakistan has served as China’s main bridge between Muslim countries. Pakistan also played an important role in bridging the communication gap between China and the West by facilitating the 1972 Nixon visit to China.

The relations between Pakistan and China have been described by Pakistan’s ambassador to China as higher than the mountains, deeper than the oceans, stronger than steel, dearer than eyesight, sweeter than honey, and so o Chinese mega projects in Pakistan China has played a significant role in the economic progress of Pakistan ever since the establishment of diplomatic ties between them. The first major initiative in this regard was the setting up of Heavy Mechanical Complex at Taxila; a project of immense importance that nudged the process of industrial development in Pakistan and continues to contribute to the

overall progress of the country in a big way. The construction of KKH Highway, termed as the eighth wonder of the world not only laid the foundation for an infallible and eternal friendship between the two neighbours but also generated tremendous economic activity in Gilgit-Baltistan besides boosting trade between the two countries. Currently China is working on a plan for the up-gradation of KKH at an approximate cost of $500 million and in building 165 Km Jaglot-Skardu and 135 KM Thakot-Sazin roads in Gilgit-Baltistan at a cost of Rs. 45 billion. China would pay 85% of the cost while Pakistan will contribute 15%.

A rail link between the two countries is also envisaged to be built. Besides these monumental projects, China is also helping Pakistan to tide over the energy crisis. Currently the Chinese are working on 15 mega projects in the energy sector in Gilgit-Baltistan and Azad Kashmir. A very significant project in hand is the upraising of the Mangla Dam reservoir by sixty feet. As part of resettlement of the dam affectees, the Chinese firm, International Water and Electric Corporation ( CIW&EC) is also working on the construction of a bridge over Jhelum river in the same area.

Another very vital project is Neelum-Jhelum Hydroelectric Power Project which aims at diversion of the water of Neelum river through a tunnel into Jhelum river, at a cost of US$12. 6 billion. The Chinese are also entrusted with the responsibility to commission Kohala Power Project at a cost of US$ 2. 155 billion with a capacity to generate 1050 MW of electricity. China’s Three Gorges Project Corporation is constructing Diamir-Bhasha Dam on the Indus river with a total investment of US$ 12. 6 billion.

In addition to these undertakings the Chinese firms are also working on six other mega power projects in Gilgit-Baltistan that include : US$7. 8 billion Dasu Hydropower Project, US$ 70 million Phandar Project, US$ 40. 01 million Bashu Hydropower Project, US$ 44. 608 million Harpo Hydropower Project and US$ 6 billion Yulbo Hydropower Project. China is also investing an amount of US$ 300 million in housing, communication sectors. The Indians are very wary of Chinese involvement in development projects in Gilgit-Baltistan and Azad Kashmir and view it as a calculated move to build Chinese influence in these areas, a charge vehemently

dismissed by China. China is also helping Pakistan in the nuclear power sector. A nuclear power plant at Chashma with a power generating capacity of 330 MW of electricity has already been completed and integrated with the National Grid recently and two more similar plants are scheduled to be completed by 2016-17. The agreement for these projects was signed on June 8, 2010 during President Zardari’s visit to China, notwithstanding the fact that US raised objections on the nuclear cooperation between the two countries.

The Chinese brushed aside the apprehensions on this account by informing the Nuclear Suppliers Group (NSG) during its meeting at Christchurch, of its decision to build Chashma IV and V in Pakistan. In the backdrop of US-India agreement for cooperation in the field of civilian nuclear technology, which Pakistan views as a discriminatory act, the Chinese help assumes a great significance and reflects the strength of friendship between the two countries. These two plants are part of the PAEC programme to generate 8800 MW of nuclear power for the country to supplement other sources of power generation.

An arrangement for soft Chinese loan to fund the construction has also been inked. The participation of China in exploiting copper reserves at Sandak and the development of Gawadar Port in Balochistan, though not liked by some regional and international powers, are undertakings of immense economic benefit to the people of the province and the overall development of Pakistan. The trade between the two countries has also been expanding. China is the fifth largest source for Pakistani imports. The bilateral trade between the two countries touched US $7 billion mark in 2008.

Under a five year programme lunched in 2006 this volume is proposed to be enhanced to $ 15 billion by 2012. In the past few years, the Chinese have made an investment of US$ 1. 3 billion in Pakistan. A number of Chinese companies are working in the oil and gas, IT, Telecom, Engineering, and mining sectors. As is evident, China has made an unfathomable contribution to the economic progress of Pakistan and with the completion of the new ventures, especially in the energy sector, Pakistan can rightly aspire for an era of sustainable economic growth in the country.

It is an irrefutable reality that relations between Pakistan and China have been growing from strength to strength irrespective of who was in power in Pakistan. However the exponential expansion in these relations during the present regime reflects a marked departure from our perennial propensity to look up to the West, particularly US for our security and economic progress. The enhanced economic, political and strategic cooperation between China and Pakistan will contribute immensely to warding off the lurking dangers and consolidating the gains of the efforts made for changing the economic situations of the people of both the countries.

This renewed and vigorous engagement between the two countries is an encouraging development as it will greatly benefit Pakistan by re-invigorating commercial and industrial activities and creating new jobs. This might also restore the confidence of the international community in Pakistan as a safe place to invest. Gwadar Deep Water Port Project: Implications For Pakistan And China A new port at Gwadar will supplement Pakistan’s existing one at Karachi, and its Port Qasim extension, which dates from the late 1980s. Karachi handles nearly 50 million tons.

With Pakistan’s economy expected to grow at a minimum of 5 percent to 6 percent annually, the volume of trade is projected at about 75 million tons by 2015. The government has already undertaken expansion programs at both ports to cater to the growing commercial demands. Nonetheless, there is still a need for an additional seaport to handle peak season overflow of incoming and outgoing cargo and to cater to transit traffic from the Central Asian states and Afghanistan. Equally significant is the national defense need for redundancy in the communication infrastructure.

A single port complex is vulnerable, especially during times of crisis or war. The Gwadar port project arose from a Sino-Pak agreement signed in March 2002 and under which China Harbor Construction Corporation will build the port. Beijing has provided $198 million and Islamabad $50 million. The scope of Phase One includes construction of three multipurpose berths, each 200 meters long and capable of handling vessels up to 30,000 DWT. This first phase should be completed by late 2004 or early 2005.

The estimated cost of Phase Two, planned for development by the private sector, is $600 million. It envisages ten more berths, a 5-kilometer approach channel and the capacity for vessels up to 50,000 DWT. Gwadar is also visualized as becoming a regional hub, serving commercial traffic to and from the Mid East, the Persian Gulf, and China’s Xinjiang province, Iran, Sri Lanka and Bangladesh. Its location at the mouth of the Persian Gulf and at the opposite end of the strategic choke points of Straits of Hormuz and the Gulf of Oman enhances its strategic importance.

Its development could as well favorably influence the geo-strategic environment of the region and have an overall beneficial impact on Pakistan. Additionally, the port would facilitate efficient exploitation of Pakistan’s exclusive economic zone, which so far has remained largely unexplored. The area is known to be rich in fisheries and if the 600 kilometer long coastal line is fully exploited could give a substantial boost to fish and crab exports and promote food-processing industries.

Gwadar lying close to the oil rich Gulf-states could be a potential source of off–shore gas and oil reserves. The existing highways on the Afghan border, which connect the border towns of Chamman and Torkham, provide the shortest all-weather road and rail links. They will have to be brought up to international standards, however, if Gwadar’s potential as a major economic and commercial center is to be realized. Pakistan is already at work, with its 700-mile Mekran Coastal Highway, connecting Gwadar with its own major cities and ports.

The development of comprehensive network of roads and other communication infrastructure, however, entails heavy investment and several years to complete. Rail and air services between Gwadar and other important commercial nodes in Pakistan will have to be either upgraded or established and upgraded. Development of the Gwadar port, which is located in the relatively backward province of Baluchistan would benefit its overall economy and unlock its potential. Regrettably, both local people and tribal leaders are not enthusiastic about the project. In fact, some are actively opposing it.

Their fears are that outsiders, whether foreign or domestic, will undertake the development work and that this will threaten the identity and livelihoods of the locals. Tribal leaders who have monopolized power in Baluchistan are apprehensive of losing their hold when the project materializes. This would entail building consensus through a sustained and well-coordinated political process and winning local confidence. Beijing, according to some sources, intends to take advantage of Gwadar’s most accessible international trade routes to CAR and Xinjiang.

The plan envisages extending China’s East-West Railway from the Chinese border city of Kashi to Peshawar in Pakistan’s northwest. Cargo to and from Gwadar can then be delivered to China along the shortest route, from Karachi to Peshawar. The same road and rail network could also be used to supply oil from the Persian Gulf to the western provinces of China. Additionally, China could gain rail and road access to Iran through Pakistan’s internal road and rail network.

Use of Gwadar port by China, which is one of the fastest growing economies in the world would accelerate the growth of both the port and the hinterland as well as enhance Gwadar’s overall commercial and strategic value. The Chinese have all along denied that the Gwadar project has any military dimension. It is, Beijing emphasizes, a civilian port. At the same time, China–with heavy imports of Persian Gulf oil, most of which is routed through this sea-lane–maintains that its interest in having secure and uninterrupted flow of oil is justified.

Joint naval exercises, goodwill visits by its naval vessels and increased trade and commercial activity with Pakistan are likely to raise China’s profile in the Arabian Sea. As a matter of policy, China has always assisted Pakistan in strengthening its defensive capability. Beijing’s involvement in the Gwadar sea port project is motivated primarily by commercial considerations, but it also sees distinct advantages for both its and Pakistan’s navy in having a friendly port of call close to the Persian Gulf region.

Between that and a reliable network of road and rail links, both Pakistan and China are sure to benefit commercially and strategically. From a defense perspective, Pakistan’s navy would find it easier to operate closer to the Gulf. During times of crisis, it could move its naval assets farther from any Indian air and naval threat. In the event of war, a port in Gwadar would provide strategic depth to Pakistan’s commercial and military vessels and be in a relatively advantageous position from which to operate against an Indian navy.

Gwadar is, however, well within range of land-based and sea-based Indian missiles. China In 2013 Gwadar port was acquired by the state-owned China Overseas Port Holdings Limited. [14] The port is said to be strategically important for China as Sixty percent of China’s oil comes from the Gulf by ships traveling over 16,000 kilometers in two to three months, confronting pirates, bad weather, political rivals and other risks up to its only commercial port, Shanghai. Gwadar will reduce the distance to a mere 2,500 kilometers and also serve round the year. [6] •China has been instrumental in design of the project.

•China is providing approximately 80% of the cost of Port in shape of grants and soft loans •Over 500 Chinese workers have worked on the project on 24 hour basis to complete the port setup. There are still a large number of Chinese workers and engineers working on the project. •China has further committed to provide money and resources as and when needed. •China is setting up a Dry Port at the Pak China border to take advantage of shorter route to sea through Gwadar. •China has paid US$ 360 million to Pakistan for expansion and up gradation to all weather traficability of Karakoram Highway linking Pakistan with China.

The contract has been awarded to Frontier Works Organization, who has also started the project. •Feasibility and engineering studies to connect China with Gwadar through pipeline and railway track has already begun. This railway track also has the significance of being an engineering marvel of the world. Chinese Interests China has a great strategic interest in Gwadar. Following are the important ones:-[15] •China is heavily dependent upon the oil from the gulf, at present this oil passes via a very long route, through the straight of Malacca under US influence.

After this oil has reached the Shanghai or the Chinese East Cost, it has to be transported thousands of miles in land to West of China. By using Gwadar port and than Karakoram Highway (KKH) its much safer, cheaper and shorter route to west of china. •Middle East is very important region in the world because of its Oil Reserves and large markets. China has a natural dependence on this but does not have means to influence it. Government of Pakistan has already committed to providing a Navel Base to China in Gwadar.

This will not only help secure the Gwadar but also take the Pakistan China Friendship to new heights. •Chinese Goods will find an easier, shorter and secure route to Middle East increasing profitability and increasing trade. •China will greatly benefit from the industrial zone by setting up industries close to the markets. Conclusion The rapid growth of China’s economy has also enabled it to increase its military expenditure at a fast rate to safeguard its security interests. its annual military expenditure is currently about $106 billion as against $36 billion for India.

However, its military expenditure is still a very small proportion of the US annual military expenditure. Such a massive shift in the global balance of power cannot but have far-reaching implications for international politics. The US ability to impose its will on the rest of the world in the economic field is fast eroding. Correspondingly, the effectiveness of its economic sanctions against foreign countries will also decline. It has forced the US to pivot its naval forces to the Asia-Pacific region where it will deploy 60 percent of its naval assets by 2020.

It is strengthening its alliances in Asia with Australia, Japan and South Korea. It is trying to checkmate China’s territorial claims in South China Sea by extending political support particularly to Vietnam and the Philippines. Above all, from the point of view of both Pakistan and China, the US is engaged in close cooperation with India in economic, military and nuclear fields to help build it up as a major world power of the 21st century with a view to containing the expansion of China’s influence in South Asia and the Indian Ocean region.

The growing rivalry between the US and China, and the US efforts to build up India as a bulwark against China, have important strategic implications for Pakistan. The growth in the depth, and the extent of US-India cooperation, is likely to push Pakistan closer to China as a counterweight to India’s possible hegemony in South Asia. US threats of sanctions against Pakistan because of its decision to proceed with the Iran-Pakistan gas pipeline project will further hasten this process. On the other hand, these developments will deepen China’s inclination to develop closer relations with Pakistan.

Thus, from purely a strategic point of view, the future prospects of Pakistan-China relations are quite bright. It was against this background that during the fifth round of the Pakistan-China Strategic Dialogue held in Beijing in November 2012, Pakistan’s Foreign Secretary and the Chinese Vice Foreign Minister agreed that Pakistan and China needed to close ranks to face the extraordinary global and regional challenges. However, there is no room for complacency. Pakistan’s bilateral trade with China, which was estimated to be $10.

6 billion in 2011, was far behind the Indo-China trade of $80 billion. We must, therefore, pay special attention to the building up of Pakistan-China relations in economic, commercial and cultural fields, while maintaining close cooperation in political and military fields. Future possibilities of economic and commercial cooperation include a rail link between Pakistan and China, oil and gas pipelines through Pakistan to connect Xinjiang and the rest of China with the Strait of Hormuz and West Asia via the land route, and a rapid increase in bilateral trade.

However, Pakistan would have to put its own house in order, reorder its domestic priorities, energise its private sector, and streamline its procedures to take full advantage of the opportunities that beckon us. On the political side, we should be sensitive to China’s concerns about the activities of the Taliban and other religious extremists in so far as the situation in Xinjiang province of China is concerned. Religious moderation is good not only for our internal political health, but also for our relations with China.