Pakistani Prime Minister Imran Khan’s appearance at the 2022 Beijing Winter Olympics has been overshadowed by that of Russian
President Vladimir Putin. He is among the few world leaders who were not only invited by Chinese President Xi Jinping for the Beijing 2022 Olympic Winter Games, but also by U.S. President Biden for the Summit for Democracy last December.
But Mr. Khan came to Beijing while most of the invitees of the Summit for Democracy were absent at the Olympics
mainly to take the stand opposed to China’s genocide of Muslim Uyghurs among many other egregious human rights abuses. One would
hope Mr. Khan, a prime minister of a Muslim country, would care about the plight of his fellow Uyghur brothers, but he, once again demonstrating his callousness while in Beijing, reaffirmed his country’s support
for China regarding its policies in the Muslim-majority Xinjiang, Hong Kong and Tibet.
Just as Mr. Putin has politicized
the Beijing Olympics to maximally advance his interests, so too is Mr. Khan for his own, albeit without much fanfare. Knowing very well that embattled Mr. Xi is in desperate need of their presence and defense of his human rights records, none of the world
leaders attending the Games would want to leave Beijing empty-handed.
It is clear that the prevailing economic crisis in Pakistan can create instability for Mr. Khan’s regime. This has made it a necessity, not a luxury, for him to
visit China during the Olympics, where he is expected to plead for a bailout through concessionary loans and fresh investments in both China-Pakistan Economic Corridor and non-CPEC projects.
The prime minister’s visit to Beijing is highlighted by the fact that he is accompanied by numerous top aides and advisers. In addition to Khan,
the 27-member Pakistani delegation also includes Foreign Minister Shah Mahmood Qureshi; Finance Minister Shaukat Tarin; Information Minister Fawad Chaudhry; Planning Minister Asad Umar; National Security Adviser Moeed Yusuf; Commerce Adviser Abdul Razak Dawood;
Khalid Mansoor, special assistant to the prime minister on CPEC Affairs; and multiple elite members of Pakistan’s business community.
Since Pakistan certainly is not in a position to make any financial commitments to China, it is probable that any Chinese investments will follow the conventional path of assured returns through Pakistani government guarantees.
Mr. Khan will undoubtedly seek longer payback terms for the fresh loans and strive to extend the repayment schedule of currently outstanding loans to reduce his government’s debt-servicing burden.
Several memoranda of understanding (MoUs) and various other agreements have been prepared for signing during Mr. Khan’s visit to China. Prominent
among these are: (1) a space cooperation agreement between the China National Space Administration and Pakistan’s Space & Upper Atmosphere Research Commission (SUPARCO); a formal agreement on deepening nuclear energy cooperation between the two countries;
(3) an agreement to strengthen cooperation on the security and protection of the China-Pakistan Economic Corridor and of Chinese nationals, institutions and projects in Pakistan; (4) a MoU between Pakistan’s Inter-Services Intelligence and China’s Ministry of State Security on further strengthening the exchange of intelligence and state security information; and (5)
a strategic cooperation agreement on water resources.
In addition, efforts are underway to firm up a Pakistani-Chinese framework
agreement on industrial cooperation for signing during Mr. Khan’s visit to Beijing. It is expected that an MoU between Pakistan’s National Counter Terrorism Authority and the Chinese government will lead to structured cooperation in the sphere
of counter-terrorism as well.
In particular, the draft MoU highlights the convergence between Pakistan and China on
their interests in Kashmir and Afghanistan. Beijing views the Kashmir conflict as a historical dispute which needs to be resolved according to United Nations Security Council resolutions. Concerning Afghanistan, essential humanitarian aid is to be
ensured, in addition to seeking a consensus on extending the China-Pakistan Economic Corridor to Afghanistan.
Mr. Khan’s stay in Beijing, it is expected that he and his delegates will hold virtual meetings with Chinese entrepreneurs to convey concrete investor-friendly steps taken by the Pakistani government, including the establishment of a “CPEC
and Investment Facilitation Centre.” Mr. Khan also plans to assure China that his government will consider lowering the “withholding tax” on shareholder dividends and highlight various other fiscal incentives
for Special Economic Zones.
Pakistan Railways — the country’s state-owned railway company — has proposed
collaboration with China in a variety of areas, such as participation in bids for the supply of rolling stock (including locomotives, freight wagons and passenger cars) and the possibility of their joint manufacturing in Pakistan, in addition
to modernization of the Karachi Circular Railway — a public transit system serving the Karachi metropolitan area. In particular, completion of the Karachi-Peshawar Line, also known as “Main Line 1,” is still pending over Beijing’s
financial concerns about the multibillion-dollar project. Reaching a loan agreement with China for this project is a high priority for Pakistan.
Pakistan’s main investment promotion agency, the Board of Investment, has suggested that the country seek a new $10 billion loan from China to create a “deposit fund” with a minimum duration of three
years, extendable to five years. Analysts believe such a fund could be utilized to develop social and other priority sectors and meet the Pakistani government’s fiscal needs. Mr. Khan may also seek to increase the Pakistani-Chinese currency
swap agreement by as much as $4 billion (approximately RMB 30 billion).
It is expected that over a dozen Chinese companies,
mostly state-owned enterprises, will be interacting with the Pakistani prime minister during his visit. Several Chinese entities (including Beijing Belt and Road Investment Fund Management Co. Ltd., China Construction Bank and China Development Bank)
have expressed interest in financing the second phase of the Pakistan-China Optical Fibre Cable Project to connect Rawalpindi to Gwadar along the three CPEC routes at an overall cost of $214 million. In addition, a strategic cooperation framework agreement
between Pakistan Mobile Communications Ltd. and Sunwalk Optical Network Technology Ltd. has been prepared for signing during Mr. Khan’s visit.
Notably, Mr. Khan’s mandate during this visit to China is to seek more private sector investment and diversify Chinese foreign direct investment beyond the infrastructure sector, mainly power and transport. In this regard,
Mr. Khan and his delegation will seek to persuade Chinese business owners to relocate some of their manufacturing operations to Pakistan. Not surprisingly, China’s state-owned enterprises are eager to invest in Pakistan under
the CPEC framework, with lucrative incentives and guaranteed return on investments.
19 Feb 22/Friday