China's growing presence in Pakistan has raised eyebrows among some of Pakistan's neighbors and allies, especially India and the United States.
China is the largest source of foreign direct investment (FDI) in Pakistan, with a total of $2.2 billion in 2019, according to the United Nations Conference on Trade and Development (UNCTAD). China’s investment covers a wide range of sectors, from infrastructure and energy to manufacturing and services.
China’s flagship project in Pakistan is the China-Pakistan Economic Corridor (CPEC), a $60 billion initiative that aims to connect the southern port of Gwadar to western China through a network of roads, railways, pipelines and power plants. CPEC is part of China’s Belt and Road Initiative (BRI), a global infrastructure development strategy that seeks to expand China’s influence and trade.
CPEC has been hailed by both countries as a game-changer for Pakistan’s economy, which has been struggling with low growth, high debt and a balance of payments crisis. The project is expected to create thousands of jobs, boost industrial capacity and generate revenue for Pakistan.
However, CPEC also faces many challenges, such as security threats from militant groups, local resentment over land acquisition and environmental impact, and transparency and accountability issues. Some critics have also raised concerns over Pakistan’s rising debt to China and the potential loss of sovereignty over strategic assets.
Apart from CPEC, China is also investing in other areas of Pakistan’s economy, such as buying stakes in state-owned enterprises (SOEs), setting up factories to export goods to Europe, and acquiring shares in the Pakistan Stock Exchange (PSX). China is also providing loans and grants to Pakistan to cope with the COVID-19 pandemic and its economic fallout.
China’s growing presence in Pakistan has raised eyebrows among some of Pakistan’s neighbors and allies, especially India and the United States, who view China as a strategic rival and a threat to regional stability. They have accused China of pursuing a debt-trap diplomacy and exploiting Pakistan’s resources for its own interests.
Pakistan, however, has defended its relationship with China as an all-weather strategic partnership based on mutual trust and respect. Pakistan has also assured other countries that its ties with China are not aimed against any third party and that it welcomes constructive engagement with all stakeholders for regional peace and development.