Recent reports indicate that China is moving at a fast pace to annex Pakistan as one of its provinces. In other countries where China has invested, and the nations have been unable to pay, they have had to hand over strategic assets to China for prolonged durations, Sri Lanka and Myanmar being examples. In the case of Pakistan, China already has strategic control over its major asset Gwadar, as also of almost all its mineral wealth.
The first report was of China granting Pak an additional USD $ 500 Million as loan to Pak for it to tide over its financial crises. The Pak economy is in dire straits with diminishing foreign exchange reserves. The loan was granted at a rate of 4.5%. This is the second loan Pak has taken from the same Chinese bank, the earlier being in Oct last year of the same amount. Pak’s dire financial state is being well exploited by China.
The second was of the Pak senate ‘recommending courses of the official Chinese language being launched for current and prospective Pak CPEC human resource’. This contrasts with other nations, where those investing learn national language and customs of the countries in which they are operating. Hence, Pak appears to be bending backwards to satisfy China.
The third report pertains to the Pak government examining a proposal to replace the US dollar with the Chinese Yuan for trade between the two nations after reports emerged that China had ‘temporarily’ suspended funding for the CPEC over corruption issues. The exchange rate of the Chinese Yuan is controlled by the Chinese government hence Pak would end up losing rather than gaining.
The fourth was of the Chinese government bypassing the Pak military and directly negotiating with the Baluch Liberation Front(BLF) for ensuring security to the CPEC in ‘troubled’ Baluchistan. There are reports of China bribing the freedom fighters. Thus, they would be free to target the Pak army and leave the CPEC, which would benefit China. Though the Chinese foreign ministry spokesperson denied the same, however comments by Pak were contrary. Pak’s comments were guarded stating that anyone could interact with the BLF, if it benefitted the nation.
Fifthly, is China’s support to the JeM and its leader Masood Azhar. It has repeatedly blocked the UN from designating him as a global terrorist. It is this group which has been responsible for most recent strikes in India, including Pathankot and Sunjuwan. Thus, it would now appear that China would soon be controlling anti-India operations of the ISI. Sixthly, is the increased presence of Chinese troops even as far south as Rajasthan, constructing defences for the Pak army.
Seventhly, there are reports of China constructing a naval base at Jiwani, near Gwadar. While Gwadar is already on a forty-year lease to China, this base would enable China to officially deploy forces in Pak. For the present both China and Pak have denied the same. Finally, a consortium of three Chinese bourses have purchased a forty percent ownership of Pakistan’s only stock exchange in Karachi, thereby gaining control over the Pak economy.
Pak did appear to indicate some strength of character by cancelling the Daimer-Bhasha dam project to be constructed with Chinese funding, stating difficult financial terms. However, the deep penetration by China in every aspect of Pak society continues unabated.
Diplomatically, militarily and economically Pak is already completely dependent on China. It has slowly taken over the Pak economy, supplies maximum military hardware to them and when international agencies refuse to grant them loans, it comes to the rescue. Diplomatically, it continues to shield Pak in international forums, employing its veto to protect Pak from being censured. Now it appears to be becoming more deeply involved with the country.
Its talks with the BLF is clearly a direct interference in the internal affairs of Pak and goes against the very character of the state. India would never permit any nation to interact directly with any group or leader who operates against the state. The very desire of the Pak NSA to meet the separatists or their being invited by the Pak Consulate for talks had led to calling off official dialogue between the two nations. In Pak’s case it gave a rather muted statement.
So evident is the control that the murder of one Chinese national in Pak, has the government on edge. China demands arrest of those responsible, which the local authorities fail to ensure, only adding to further pressure from China. Pak has created a special force only to ensure security of the Chinese employed in the construction of the CPEC.
Pak is soon scheduled to commence repaying back China at an annual rate of five billion dollars a year, solely for its investment in the CPEC. This is in addition to repayment for loans it has taken for shoring up its economy from China and other international borrowers. Financially repayment may be almost impossible as most Chinese companies in Pak have special tax privileges and the earning accruing from Gwadar would be ninety percent with China. As debts mount so would Chinese demands.
Since it already controls the Pak economy and Gwadar, logically the next step would be controlling its foreign policy and military. Thus, the friendship claimed to be ‘deeper than the ocean’ is the Chinese way of adding to its territory, without as much as firing a single bullet.
The recent warning of placing Pak on the Financial Action Task Force (FATF) grey list, with Chinese acceptance is adding to Pak’s woes and faster takeover by China. It is known that Pak would never be able to provide a satisfied plan of action to avoid being ‘grey listed’, hence would be economically more affected. Pak would find it difficult to take international loans to survive, hence would be forced to bank on Chinese largesse, falling deeper into their trap.
China is aware, that though it may gain control of Pak’s assets and even enhance its hold on the country’s policy, but an economically weak nation, packed with militants and hardliners would become more of a burden than an advantage in the long term. This is the time for India to commence forcing Pak into an arms race, breaking its economy and pushing it against the wall, even adding to Chinese problems of shoring up a bankrupt Pakistan. This may compel China to restrict Pak’s policy of supporting terror groups.