Pakistan & China - Economic Reboot
No changes in previous deals. BRI remains intact.
Pakistan & China "move on" - BRI is safeguarded. Economic reboot.
After months & years of speculations, Pakistan & China have finally decided to look at the future. The CPEC agreements signed - sometimes criticised for high unaffordable terms - are going to remain in tact. Previously, it was presumed that as Pakistan renegotiates it's contracts with local investors, stage was being set to request China as well. Not to be.
Chinese have voiced their concerns over government's inability to pay off $1.4b due payment. Although, the inflows in Pakistan are much higher than the outflows, but business is business. China would surely help us in CPEC 2.0, import substitution, Karachi Circular Railway, military & political ties. However, this is a strategic decision.
If China were to agree to renegotiate it's power agreement, a precedent would be set for other BRI recipients as well. Media (western ones) would make headlines that Pakistan wants "high" tariff to be withdrawn and BRI is a "debt diplomacy" tool. This would have had major political & economic impact on China's regional ambitions. As an ally, amid US vs China's Iron wall, Pakistan might get concessions some other how.
Well it's good for the future. Pakistan's economic interests are intrinsically tied to China's. The way western companies are encouraged to move & transfer technology to India, Pakistan should leverage ties for Chinese tech companies to pour money in Pakistan. A few $b commitment & regional offices would change the sentiment in Pakistan. Then, there power deals would be trivial.
As Pakistan prepares to go the IMF, efforts must be put to assure that this money would not be used to pay off Chinese creditors/investors. Secondly, all decisions which are centric to Pakistan's economic security must be taken beyond the electioneering agendas. And lastly, the structural issues in-house must be addressed w/o hoping for "invisible hands" to make us lucky again.
This is reboot of China Pakistan's relationship. It's time for Pakistan to now engage to host President Xi in Pakistan. Well after Afghanistan's new government is recognized. The CRIPTS (China, Russia, Iran, Pakistan, Turkey) might just be the new regional block in response to Quads/Five eyes. Hectic days ahead.