ISLAMABAD:
The Pakistan–China partnership has long been described as “higher than the Himalayas, deeper than the oceans.” Over decades, the relationship has grown into a multidimensional alliance, with cooperation spanning security, defence, diplomacy, and economics. Among these, defence and diplomatic ties have flourished, resting on three pillars: geostrategic alignment, geopolitical needs, and shared values. Together, these elements have cultivated what President Xi Jinping once called a brotherly and resilient bond one that has consistently weathered external shocks, from wars to global power shifts.
But the economic side of the relationship tells a more complicated story. Despite decades of trade agreements and initiatives, Pakistan has struggled to translate political goodwill into sustainable economic gains. This shortfall has allowed space for anti-China narratives to gain traction, particularly as high-profile projects such as the China–Pakistan Economic Corridor (CPEC) have failed to deliver on their original promise.
A History of Agreements but Weak Implementation
Economic cooperation between Islamabad and Beijing has a long history. Agreements such as the Barter Trade Agreement of 1963, the Machinery and Technical Support Agreement of 1966, and the Border Trade Agreement of 1985 laid the groundwork for bilateral economic ties. Later, major Chinese firms including Huawei, Zong, and Haier entered Pakistan’s market. The signing of the China–Pakistan Economic Corridor (CPEC) was heralded as a transformative step, one expected to reshape Pakistan’s economic future.
Yet, despite this momentum, results have been underwhelming. Pakistan has secured only around $28 billion in CPEC-related investments modest compared to the opportunities available. The main obstacle has been poor execution. Memorandums of Understanding (MoUs) were signed, but implementation lagged. The Special Economic Zones (SEZs), meant to drive industrialisation during CPEC’s second phase, remain largely incomplete even after more than a decade. Only two zones are near operational status.
Misreading China’s Evolving Role
Part of the problem lies in Pakistan’s failure to adjust to China’s changing position in the global economy. In the 1960s and 70s, Pakistan’s diplomatic support was crucial for a then-isolated Beijing. Today, China is a global power with a far more competitive and strategic outlook. Many in Pakistan still equate CPEC with past gestures, overlooking the fact that China’s priorities have shifted.
The Belt and Road Initiative (BRI), under which CPEC falls, has also entered a new phase. Instead of large-scale infrastructure projects, Beijing is now prioritising smaller, high-impact livelihood initiatives. The China Development Bank and the Export-Import Bank of China have earmarked nearly $49 billion for such projects. This evolution requires Pakistan to rethink its approach if it wishes to remain relevant in China’s broader economic agenda.
The Case for Refinement
Against this backdrop, it is clear Pakistan must refine not reset its economic ties with China. To do so, experts argue two steps are essential. First, Islamabad should replicate the professionalism and clarity that underpin its successful defence and diplomatic ties. Second, it needs a team of highly skilled professionals with a deep understanding of Chinese policies, economic philosophy, and foreign policy objectives.
A serious review of the economic partnership should cover multiple areas:
- How China’s reforms since 1978 reshaped its economy and approach to global cooperation.
- The role of CPEC within the larger BRI, and how Pakistan can position itself against 150+ competing member states.
- The structural mismatch between Chinese and Pakistani firms, and whether Pakistan’s state-owned enterprises can bridge this gap.
China, too, will need to factor in Pakistan’s current vulnerabilities. With terrorism resurging and the economy under strain, a purely hard-nosed economic approach may not suit the reality on the ground. A more flexible strategy could help sustain long-term cooperation.
The Way Forward
Pakistan and China continue to enjoy unparalleled trust in the realms of defence and diplomacy. But economic ties have consistently fallen short of expectations, creating room for disinformation campaigns. If Islamabad is to silence such narratives and unlock the true potential of CPEC, it must refine its approach shifting from promises to execution, from old assumptions to new realities.
The friendship remains resilient. The question is whether Pakistan can rise to the challenge of matching political goodwill with meaningful economic results.
