Chinese President Xi Jinping is set to visit Pakistan in fall of 2020 as confirmed by Prime Minister Imran Khan in an interview with Kamran Khan. However, there is no information available about the details of the visit. It is certain that deals would be signed in the areas of military and economy. Last time Chinese President Xi brought a $49 billion program in the form of the China Pakistan Economic Corridor (CPEC). I am sure there will be at least a $100 billion investment plan for Pakistan.
— GuruAlpha (@GuruAlpha1) September 6, 2020
Why do I think that? China has announced a whopping $400 billion amount of investment for Iran. Notably, Pakistan is a closer ally of China. So can we expect a $100 billion package from China’s $940 billion Sovereign Wealth Funds? No doubt Iran has hydrocarbon reserves which offer huge opportunities for China. What does Pakistan have to offer China for a $100 billion investment?
Opportunities for Pakistan via Afghan Peace Process
Pakistan has been a key player in the Afghan Peace Process owing to its own interest of various nature including regional connectivity, trade, energy corridor and economic boost due to a likely reconstruction of Afghanistan. Opening of all these opportunities for Pakistan is an invitation to Chinese investment.
First, a peaceful Afghanistan provides an opportunity for trade and reconstruction. It means Pakistan would need manufacturing plants for the production of goods and a road and railway network to transport it to Afghanistan and beyond. Here Chinese companies will be required to work.
Second, a peaceful Afghanistan allows Pakistan to build its energy corridor connecting Iran and Central Asian countries. China’s investment in Iran can become part of Iran, Pakistan & China gas pipeline which was formerly idealized as Peace Pipeline with India as one of its partners. But we assume that India’s animosity with China would lead former out of the project and latter part of the project.
Connecting China to gas pipeline projects
It was already supposed in the previous designs that the Peace Pipeline was to be extended to China via India. Not to mention, Iran Pakistan gas pipeline is already under construction by Chinese firms without the participation of India. All China needs is to connect it with its existing gas infrastructure. Moreover, the Turkmenistan, Afghanistan, Pakistan and India (TAPI) Pipeline can also be revived with Chinese investments. China can secure its energy sources by investing and connecting itself in the gas pipeline projects.
Finally, China would want to strengthen Pakistan’s military position in the changing regional power politics where India seems to stand with the United States. We, therefore, can expect China to sign defence pacts with Pakistan which may include the provision of heavy military equipment to the Pakistan Army, Airforce and Navy.