The Political Economy of Sino-Pakistani Relations: Trade And Aid 1963–82

China’s current interest in expanding its trade and aid relations with Pakistan can be traced to a number of motives. First, Pakistan, in particular following the Soviet invasion of Afghanistan, has been considered a strategic asset and an important pillar in containing Soviet expansion toward the Gulf and the Indian Ocean. Economic growth is considered of paramount importance to political stability, without which Pakistan could not play the ascribed role. Second, in light of Pakistan’s shift toward growing preference for reliance on the more advanced Western, in particular American, weapons systems, which are now available on generous terms, Beijing stresses economic relations as a means to cement the strategic relationship with Pakistan. Third, China’s demonstration of goodwill and long-range interest in economic cooperation could also be attributed to the wish to put to rest Pakistani apprehensions lest China’s steps toward normalization with India and more recently with the Soviet Union indicate a decline in future support for Pakistan. This would encourage Islamabad to seek on its own a modicum of accommodation with Moscow, which has shown an interest in bringing about such development. Finally, in the context of Sino-Indian on-going negotiations to improve relations and settle all outstanding issues, Sino-Pakistani economic cooperation could serve as a vivid reminder to India of the potential benefits to be gained from normalization with China, even if the territorial conflict stays unresolved. This in fact was the line taken by Deng Xiaoping and other Chinese leaders when negotiations were resumed—that is, to delink the Sino-Indian border question from progress toward cooperation for mutual benefits in other fields.