SUMMARY of the article “What China wants from Pakistan,” by Khurram Husain, published on November 9, 2023
The crux of what China seeks from Pakistan is akin to its goals with other nations – maintaining a perpetual trade surplus in its favor. This is evident through the stark numbers; Pakistan has accumulated a trade deficit with China approaching $90 billion since 2010. Contrarily, Pakistan maintains trade surpluses with countries like the US, UK, and the EU. This trade deficit with China is a relatively recent development, with China’s position as Pakistan’s largest trade deficit partner solidifying after 2010. Few countries worldwide sustain trade surpluses with China. Unlike nations like India, which have protected their trade interests by avoiding bilateral free trade agreements, Pakistan has deepened its association with China and increasingly relied on Chinese credit. China’s commitment to Pakistan in development finance, including budgetary support, stands at $70 billion since 2000, with $56 billion pledged during the Belt and Road Initiative (BRI) era. This trend suggests that China’s purpose is to sustain this loss-making relationship, enabling Pakistan to accumulate more significant deficits each year. It’s essential for Pakistan to approach this relationship unemotionally and reassess its free trade agreements with China, considering whether to renew them in 2024. Pakistan must reorient its foreign policy to focus on earning capital, as this is the key to breaking free from an endless cycle of borrowing.
Easy/Short SUMMARY:
The article discusses China’s primary objective in Pakistan – maintaining a continuous trade surplus. Over the past decade, Pakistan has accumulated a substantial trade deficit with China, while it has trade surpluses with other countries like the US, UK, and EU. The trend indicates that China provides credits to Pakistan, mainly for budget support, to perpetuate this deficit relationship. Pakistan needs to approach its ties with China objectively, reconsider its free trade agreements, and align its foreign policy with the goal of earning capital to break free from the cycle of borrowing.
SOLUTIONS of The Problem:
Reassess Free Trade Agreements
Renegotiate and reconsider the terms of free trade agreements with China when the opportunity arises in 2024 to ensure a more balanced and mutually beneficial trade relationship.
Embrace Pragmatism over Emotion
Drain emotional rhetoric from the relationship with China and approach it pragmatically as part of a broader strategy to earn capital and boost the country’s economic standing.
Prioritize Earning Capital
Align foreign policy with a focus on earning capital rather than borrowing, encouraging relationships with countries that boost capital generation and reforming those that result in capital drainage.
Diversify Trade Partners
Look for opportunities to diversify trade partners beyond China, reducing dependence on a single nation and mitigating the impact of trade imbalances.
Support Local Industries
Promote local industries and self-sufficiency to reduce imports and dependence on foreign goods, contributing to trade balance improvement.
IMPORTANT Facts and Figures Given in the article:
- Pakistan has accumulated a trade deficit with China of nearly $90 billion since 2010.
- In the same period, Pakistan ran a trade surplus of $34 billion with the US and almost $12 billion with the UK.
- The Belt and Road Initiative (BRI) began in post-2013 period, and China committed $56 billion to Pakistan in the post-BRI period.
- China has provided $70 billion to Pakistan in development finance since 2000, including emergency lending for budgetary support.
- A significant portion of this financial support ($16 billion) was allocated for budget support in the post-BRI era.
- Other countries that maintain a trade surplus with China include Taiwan, Japan, South Korea, Malaysia, Indonesia, and Brazil.
MCQs from the Article:
- What does China primarily seek from Pakistan?
A. A military alliance
B. A continuous trade surplus
C. Cultural exchange
D. Technological collaboration -
Which of the following countries does Pakistan maintain a trade surplus with?
A. China
B. India
C. The US
D. Japan -
When did China’s Belt and Road Initiative (BRI) commence?
A. 2000
B. 2019
C. 2013
D. 1990 -
What is the primary purpose of the financial support provided by China to Pakistan?
A. Infrastructure development
B. Budgetary support
C. Military expenditure
D. Social welfare programs -
Which country had the single largest trade surplus with China last year?
A. India
B. Taiwan
C. Brazil
D. South Korea
VOCABULARY:
-
Trade Surplus (noun) (زیادہ فروخت): A situation in which a country exports more goods or services than it imports, resulting in a positive balance of trade.
-
Deficit (noun) (دفعہ): The amount by which something, especially a sum of money, is too small.
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Perpetual (adjective) (مسلسل): Never ending or changing, often to an annoying degree.
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Marginal (adjective) (زیریں): Relating to or situated at the edge or margin of something.
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Reframe (verb) (نئی شکل دینا): Frame or express (a concept or plan) differently.
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Bilateral (adjective) (دو طرفہ): Having or relating to two sides; affecting both sides.
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Mutually Beneficial (phrase) (جنسی مفاد): A situation or arrangement that is advantageous to all parties involved.
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Pragmatically (adverb) (عملانہ طور پر): Dealing with things sensibly and realistically, based on practical rather than theoretical considerations.
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Mitigate (verb) (کم کرنا): Make (something bad) less severe, serious, or painful.
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Self-sufficiency (noun) (خود کافی): The quality or condition of being self-sufficient, especially to the greatest possible degree.
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Imbalance (noun) (غیر توازنی): A lack of proportion or relation between corresponding things.
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Borrowing (noun) (قرض اُٹھانا): The action of taking something, especially money, with the intention of returning it.
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Reform (verb) (اصلاح کرنا): Make changes in (something, typically a social, political, or economic institution or practice) to improve it.
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Diversify (verb) (متنوع کرنا): Make or become more diverse or varied.
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Reciprocal (adjective) (متبادل): Given, felt, or done in return.
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Rhetoric (noun) (ادب الکلام): The art of effective or persuasive speaking or writing, especially the exploitation of figures of speech and other compositional techniques.
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Alliance (noun) (اتحاد): A union or association formed for mutual benefit, especially between countries or organizations.
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Collaboration (noun) (تعاون): The action of working with someone to produce or create something.
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Reorient (verb) (رہنمائی تبدیل کرنا): Change the focus or direction of.
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Financial Support (noun) (مالی حمایت): Assistance provided in the form of money, loans, or other financial resources.
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