- The Washington Times - Tuesday, April 3, 2018

GWADAR, Pakistan — Nowhere is China’s growing influence in Pakistan more evident than in this gleaming port city, a once-dusty fishing village that is now a strategic outpost on the Arabian Sea being built almost entirely with Chinese money.

Located 400 miles west of Pakistan’s major port city of Karachi, nestled into a rocky peninsula jutting out from the country’s volatile Balochistan province, the massive seaport terminal and adjoining free trade zone in Gwadar has emerged as a potent symbol of the promise and peril of Beijing’s economic gamble in Pakistan.

China’s red flag with five stars and the green Pakistani flag bearing the crescent moon and a single star fly side by side in rows alongside the roughly quarter-mile drive from the port entrance to the terminal gate, snapping in the hot seaside breeze. Plastic banners marked with messages of unity and cooperation — printed in Mandarin and Urdu — line the cement brick walls marking the outer perimeter of the large seaport facility.

The sprawling compound surrounding the port facility and its home offices are studded with new apartment homes and buildings, anchored by a state-of-the-art hotel and guesthouse. The development sits in the shadow cast by several cranes built to handle the 1 million tons of cargo expected to move through the port each year.

But despite the new cranes and buildings, the flags and banners, and the hopes and dreams of the political and business elite in Beijing and Islamabad, the facility remains largely dormant.

The cranes sit silent, save for a single Conex box being moved during a live demonstration. The water in the seaports next to the cranes lies still, with only a single Pakistani warship docked at the far end of the pier. The entire complex is largely uninhabited, save for several security guards toting AK-47 assault rifles. The new guesthouse and apartment buildings are mostly empty, and very little traffic — by land or by sea — moves through the facility.

It’s a case study in how cash-flush China under President Xi Jinping has tried to purchase friends and influence in Asia, Africa, Latin America and even parts of Europe with its vastly ambitious “One Belt One Road” initiative, effectively trying to rebuild China’s old Silk Road trade routes and reshape the global marketplace more to the liking of China’s leaders. The program has sparked alarm in Washington and other Western capitals, but the case of Gwadar shows the double-edged nature of Beijing’s agenda.

During a guided tour last month for a group of visiting journalists of the shipping terminal and facility, owned and operated by the state-sponsored China Overseas Port Holding Co. Ltd., company Chairman Zhang Baozhong acknowledged Beijing’s investment in Gwadar had fallen short of expectations. Goods and materiel moved through the facility hit a total of 500,000 tons, half of what port officials had forecast for the current fiscal year, Mr. Baozhong said.

Despite missing the mark, company officials and members of the Gwadar Port Authority have again set a 1 million ton goal for imports and exports moving through the facility for the coming fiscal year, Mr. Baozhong said.

Asked if recommitting to such an ambitious goal for future port business would be too much of a fiscal gamble for the Pakistani economy and its Chinese investors, he replied: “It is business. It is always a gamble.”

Military footprint

In Gwadar and elsewhere in Pakistan, it is abundantly clear that China is placing a big bet on its South Asian ally that Pakistani officials say will pay off for Beijing.

China is making the bid during yet another period of strain in the U.S.-Pakistani relationship. President Trump said Pakistan is failing to take on terrorist groups, which are undermining the U.S.-backed government in neighboring Afghanistan.

Pakistan’s economy is on pace to grow at an annual 6 percent rate next year, and predictions say it could emerge among the world’s top 20 by 2030.

That would be a dramatic rise from Pakistan’s current ranking. Aizaz Ahmad Chaudhry, Pakistan’s ambassador to the U.S., said in an interview last summer that his country’s stock market is surging from foreign investments.

Aside from the port development project in Gwadar, China has poured money into energy projects aimed at easing Pakistan’s electricity shortages, Mr. Chaudhry said.

The roughly $60 billion sunk into the country’s economic infrastructure has coincided with a rare moment of political stability in Pakistan, after the nation’s first-ever successful transition from one democratically elected government to another in 2013. But Gwadar Port stands out as the highest-profile example of Mr. Xi’s “One Belt One Road” strategy for Asia and beyond.

“We are not just giving them money; we are giving them a sustainable solution” to their economy, Mr. Baozhong said during a roundtable with Dostain Khan Jamaldini, chairman of the Gwadar Port Authority.

While China and a handful of European companies pursue investments in Pakistan, the U.S. and much of the rest of the Western world remain wary of pumping billions of dollars into a national economy where a third of the GDP is dedicated to battling extremist groups inside the country’s own borders.

Speculation over Chinese military expansion in South Asia, tied to the “One Belt One Road” initiative, continues to hang over the port development in Gwadar. Reports say Beijing has begun expanding the port facility to handle large naval vessels. The runways and hangars at Gwadar International Airport are also reportedly being upgraded to handle heavy military transports.

If militarized, the Gwadar Port facility and China’s new military base in Djibouti — the first overseas military post established by the communist regime in Beijing — would give China a sizable and strategically placed military footprint straddling some of the world’s most important oil and gas shipping lanes.

In October, U.S. Central Command chief Gen. Joseph Votel acknowledged that he was carefully watching Beijing’s involvement in both locations. “I’m concerned about the influence of other actors in this area and what that means for us and security in the region,” he told reporters at command headquarters in Tampa, Florida.

“I am tired of answering those questions,” Mr. Baozhong said angrily.

He denied reports of Beijing’s efforts to militarize Gwadar Port. He said Washington and its allies were floating false claims to undermine China’s cooperative efforts in Pakistan.

“Our brothers’ blood went into this port, and we did nothing with it for 18 years,” Mr. Baozhong said.

He was referring to the several Chinese workers who died during the port’s construction beginning in 2002. “It is our duty … to make this port work,” he said.

New regionalism

In the Islamabad office of Sen. Mushahid Hussain Sayed, chairman of the parliamentary committee on the China-Pakistan Economic Corridor, pictures of Mr. Xi sit alongside a portrait of Pakistani founding father Muhammad Ali Jinnah.

Sitting behind a large wooden desk in his Senate office adorned with small Chinese flags and celebratory calendars with images of Mr. Xi, Mr. Sayed slammed the U.S. and its allies for what he described as an attempt to drive a wedge between longtime partners Pakistan and China.

“Some elements want to provoke a new cold war in the region” by drawing attention to China’s large economic — and potentially military — presence in Pakistan, said Mr. Sayed, suggesting that the U.S. and its regional allies were actively pushing that narrative within the international community.

Washington and Islamabad “are talking at each other rather than to each other … [and] the ability to pressure Pakistan is now limited,” he said. “The world has changed, and perhaps the U.S. has not recognized the extent of that change.”

“The U.S. has become more tactical, whereas China is more strategic,” he said. “We can depend on China. We can bank on China.”

Mr. Sayed’s gung-ho attitude toward Chinese involvement finds strong support from some of Pakistan’s top business leaders. But the business community is adopting a more pragmatic approach to Beijing’s economic largesse, several entrepreneurs told reporters during a meeting in Karachi.

Beijing is hedging its bets in Pakistan with a reported $84 billion in economic ventures in India, Islamabad’s longtime strategic rival in South Asia. While that rivalry dominates national security and domestic policy debates in Islamabad, venture capitalists in Karachi are less concerned that China is picking sides in the competition.

China invests $84 billion into India, but it is such a large country. It does not mean anything to them,” one Pakistani businessman told The Times of Karachi, but “$52 billion into our country is more than half of our [GDP].”

He said Pakistan “will benefit more from that” than from Beijing’s financial interests in India.

Industry leaders are convinced that China’s investment in Pakistan is a clear positive but express wariness over Russia’s economic overtures.

In October, Pakistan announced plans to begin joint military exercises with Russia and begin buying arms from Moscow for the first time in decades. In April, Pakistani Foreign Minister, Khawaja Asif announced plans to establish a joint commission with Russia on military cooperation to combat extremism in the region.

“We want to correct the imbalance of our foreign policy over 70 years,” Mr. Asif told Reuters at the time. “We are not divorcing that relationship [with the West]. But we want to have a balance in our relationships. We want to be closer to our friends in our region,” including Russia.

“We are simply exercising other options when the U.S. tries to bully us or browbeat us” into changing internal policies in Pakistan, Mr. Sayed said.

But when asked what the impact could be as a result of closer ties with Moscow, the senior Pakistani business executive replied, “We do not know what Russia is doing [in Pakistan]. We do not trust them.”


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