Pakistan Prime Minister Shahbaz Sharif embarked on a much-hyped trip to China a week ago, eyeing Chinese investments in the cash-strapped country. Sharif also planned to cajole Chinese leaders to extend the repayment period of the loans from China for an additional five years, all to cushion economic blows from the IMF norms.
The Pakistani government officials hailed the trip a success with images showing a beaming Sharif with Chinese President Xi Jinping. Islamabad called the visit "extremely successful and historic", adding that the "fruits of the historic visit to China will reach the people of Pakistan."
Both even released a joint statement "underscoring the importance of maintaining peace and stability in South Asia and the need for resolution of all outstanding disputes", after Sharif briefed Xi about Kashmir.
However, reports claim this could all be a facade. Sharif and his entourage of cabinet ministers left nearly empty-handed after finishing a five-day official visit this past weekend, reported Nikkei Asia.
The report added that China has cooled on Pakistan and its much-hyped $50 billion China-Pakistan Economic Corridor (CPEC). "The Chinese have become wary of putting in more money since they know it is a financial black hole due to Pakistan's long-term poor economic circumstances," Jeremy Garlick, an associate professor of international relations at Prague University of Economics and Business, told Nikkei Asia. "China needs to maintain the facade that CPEC is working because it is supposed to be a key part of the Belt and Road Initiative."
Though Pakistan had claimed that an upgraded version of the multibillion-dollar agreement would be formally launched in Beijing, the Chinese response wasn't encouraging. "Earlier CPEC investments in the power sector were rushed by political needs, and might not have been optimal," Stella Hong Zhang, a China public policy postdoctoral fellow at the Harvard Kennedy School's Ash Center, told the Tokyo-based news media.
Many believe the promises related to CPEC will remain a major enterprise in words only.
One of Pakistan's requirements during the Beijing trip was debt restructuring. Chinese officials say around 13 per cent of Pakistan’s external debt is owed to China, but the International Monetary Fund put the figure at almost 30 per cent in a 2022 report.
However, there was no public statement on the topic. "The Pakistani side entered these meetings with realistically low expectations about winning concessions in the form of restructuring Pakistan’s outstanding debt to China. Some form of relief may yet come, but is unlikely to be significant," Ali Hasanain, an associate professor at Lahore University of Management Sciences, told VOA.
That said, both countries have signed 23 agreements and Memoranda of Understanding, or MOUs, in a myriad of fields including cooperation on agriculture, infrastructure, industrial cooperation, inter-governmental development assistance, market regulation, surveying and mapping, media, and film.
China may invest in non-governmental firms in Pakistan because it is a strategic partner.