China does want returns on its economic investments but it’s willing to accept a certain risk premium with Pakistan- Andrew Small

Andrew Small is a transatlantic fellow at the German Marshall Fund’s Asia program in Washington. Educated at Balliol College, Oxford, Small’s area of research is China and he explores China’s relationship with its neighbors and rest of the world. His articles and papers have been published in Foreign Affairs, the Washington Quarterly, The New York Times, and the International Herald Tribune and many other publications.  In his latest book titled "The China-Pakistan Axis: Asia’s new Geopolitics”, Small explores the fascinating yet highly secretive relationship between China and Pakistan. This is first such book delving into the relationship between two countries in great detail.

In an e-mail Interview with MyIndMakers, Andrew Small answered questions about his book in particular and geopolitical rivalry in Asian Continent in general.

Thank you for speaking to MyIndMakers. Your book ‘The China-Pakistan Axis: Asia’s new Geopolitics’ has finally plugged the gap about a relationship in Asia that has been widely discussed but very little has been written about it. One of the reasons for that is secrecy in China and recurring political instability in Pakistan. 

How did you go around these inherent stumbling blocks?

Officials and experts on the Chinese side have been willing to open up a little more about the relationship with Pakistan in recent years. There are still areas of sensitivity but the level of frankness is far greater than it was when I started working on the subject. This is true of many other areas of Chinese foreign policy too – Pakistan was just one of the very last hold-outs. It’s a relationship that does require quite a lot of digging though – you have to spend a lot of time comparing accounts from both sides, and cross-referencing with third parties who have access to information of their own, in order to build up an accurate picture, and even then you know that it’s still a partial one. The sensitivities are also different. There is a tendency in Pakistan to gloss over the tensions and frustrations that exist in the relationship, which makes the subject of how the Uighur issues has been handled rather delicate, whereas in China, there are details on the military relationship that absolutely won’t be shared.

There was also a lot of material out there on various topics that just hadn’t been stitched together. Many important details have emerged in the last decade about China’s support to Pakistan’s nuclear program, for instance, or China’s relationship with the Taliban, that were familiar to specialists in each area but had never been laid out in a single coherent account. The book was intended as a first cut on many subjects, and I hope that better versions will emerge – what has been most useful in the months since it was released has been getting additional details from people who were, say, in the room for Mao’s meetings with Zulfikar Bhutto or knew why Chinese targets in North Waziristan were being taken out when they were.

 You mention that much of the contemporary analysis of the China-Pakistan relationship is mediated through a series of distorting prisms. To quote from your book "In India, the circulation of leaks and rumors about nefarious Sino-Pakistani activities is virtually a cottage industry. In Pakistan, political leaders have often been eager to dress up tentative plans between the two sides as firm agreements, and to portray Chinese backing for their position as far stronger than exists in reality."

Can you navigate us through these prisms? What are the facts as they stand today?

To take a couple of examples from recent months – some Pakistani officials, in the lead-up to Xi Jinping’s visit, fed out a larger number for the China-Pakistan Economic Corridor projects than the Chinese had agreed at the time. But it’s that headline figure – $46 billion – rather than the smaller $28 billion sum of signed deals that has stuck in the public consciousness. That’s not to say that there won’t end up being a package of $46 billion, or that $28 billion isn’t a huge number in its own right, but it was another case of the tendency to inflate expectations in ways that can be counterproductive. There is a real risk that the coming years are going to be characterized by disappointment that CPEC falls short of the great hopes that have been placed in it rather than by appreciation for what is still likely to add up to a significant set of Chinese investments. There was a similar mythology about China’s military support to Pakistan in the past, where the bar was at times placed so high that it led to miscalculations and a sense of letdown, even when the material backing provided was really quite significant.

Similarly, China has been fending off continued claims – often from Indian sources – about the presence of thousands of its troops in Gilgit-Baltistan. "Even 5,000 ants cannot hide from being seen," one Chinese official noted earlier in July, and I think they have a point. I don’t believe the evidence stacks up but the stories are often repeated as if they’re established facts. The problem with claims like this is that they can distract from developments of real consequence and create inaccurate perceptions of the nature of the threat. Evidently Chinese support to Pakistan’s military capabilities continues to have serious implications for Indian security, but the impression created is that the two sides are jointly planning for contingencies, have close operational coordination and so on, which just isn’t the case.

There is another tendency too, which is simply to downplay everything – China never comes to Pakistan’s help in a crisis, the economic projects will never happen, and so on, which is equally unhelpful, and sometimes seems like an excuse to avoid thinking about the relationship seriously.

In 1971, Nixon-Kissinger were vary of the blossoming Indo-Soviet friendship and were desperately trying to prod the Chinese to open a third front in north India and/or supply arms via middle eastern countries to an already beleaguered Pakistan but after the devastating genocide in Bangladesh did the US really have a practical option to prevent Pakistan from splintering? 

China looked at the whole situation and concluded that the game was up for Pakistan. Even if there hadn’t been a host of other obstacles to China stepping in, their sense was that the situation had run completely outside the Pakistanis’ control and so there was even less enthusiasm for providing any military support than there would otherwise have been. They did make direct arms shipments to Pakistan but it was far from the backing they extended in 1965. For all the prodding that was taking place from the US side, China had been very clear in its messages to Pakistan, and Indian intelligence was also fully aware that Beijing had no intention of intervening.

What has India's leverage been with the Americans and the Russians over the past 25 years in highlighting this unpredictable yet lasting partnership between China and Pakistan? Your book doesn't talk in detail about India's counter strategy to this dalliance. Is there a second book in the works? 

In the aftermath of 1965, when Chinese military involvement was a real possibility, a clear counter-strategy could be employed – the 1971 treaty with Russia, for instance, did have an impact on deterring any lingering Chinese thoughts of intervention. But after 1971 most of China’s backing to Pakistan has come in the form of support for the development of Pakistan’s own military capabilities: its nuclear and missile programs, and its military-industrial base. For many periods since then, the United States was also helping to support Pakistan’s conventional capabilities and certainly had no cause to restrain China. Moreover, China, Pakistan and the United States were close security partners against the Soviet Union so the inclination at the highest levels of government, even when it came to the development Pakistan’s nuclear program, was to turn a blind eye.

It was only in the 1990s that Washington really took a stand against Chinese missile transfers, but India itself was at odds with the US non-proliferation community for much of that period. Since then, the only point where India might really have enlisted US support on any major areas of Sino-Pak cooperation would have been in more active efforts to block civil nuclear transfers, but there wasn’t much enthusiasm for that in Washington. Much of China’s economic support to Pakistan is something that the United States is quite happy to see. If there’s a “counter-strategy” involving the United States and India, it isn’t really one that can be readily directed at the China-Pakistan relationship as such – it’s more a matter of India demonstrating that, much as China has important choices about how it influences India’s strategic environment, India has ever more opportunity to reciprocate, much of which will involve its partnership with the United States.

Will the Chinese patience with Pakistan run out in the near future? You do mention that the Chinese continue to make investments (both economic and military) without seeking any returns but if China's restive Xinjiang province becomes too hot to handle after America's withdrawal from Afghanistan and the Chinese economy shrinks, will the relation get affected? Especially now that India's Prime Minister Narendra Modi is doing some plain talking with Beijing yet at the same time enticing China with a bigger and better ROI for its investments? 

China does want returns on its economic investments but it’s willing to accept a certain risk premium with Pakistan because it believes that these economic projects are important for the country’s long-term stability. And it’s a long time since Chinese arms transfers to Pakistan have been free of charge, but beyond the revenues for weapons sales there is a continued expectation that China’s attentiveness to Pakistan’s core strategic concerns will be reciprocated. On that count, some of the recent points of sensitivity between the two sides have been addressed – Pakistan is doing its bit to pull together peace talks between the Afghan government and the Taliban, as China had wanted, and the Pakistani army’s operation in North Waziristan eliminated many of the Uighur militant safe havens and propaganda hubs that had concerned Beijing. China still has its security concerns about Pakistan but Islamabad has earned a little more credit in the last couple of years. If the whole situation were to deteriorate seriously, and Xinjiang with it, things would look quite different, of course, but that’s precisely what China is working to avoid.

The sums of money that China has to deploy for its “One Belt, One Road” projects are very large, perhaps as much as a few trillion dollars in the coming years. Beijing would very much like to increase its investments in India but that certainly needn’t be and wouldn’t be at Pakistan’s expense. Neither would the China’s economic commitments to Pakistan necessarily be affected by a downturn in the Chinese economy, barring a complete meltdown. The investment spending that China is undertaking in its western periphery is part of an economic policy intended to address the risks of a major slowdown – it isn’t being sprayed around as an act of generosity. If the economy weakens, China is likely to double down on its infrastructure spending and support to large Chinese companies, not pull the plug.

China has been investing heavily in Pakistan, be it the Gwadar Port or the proposed corridor along the erstwhile silk route. They support Pakistan in the UN Security Council on issues which can consistently create a heart burn in India. Is this strategy just to contain India, or part of a larger strategy which includes engaging the Middle East? 

Much of this now transcends India. There are evidently issues, such as Lakhvi, that are a pretty clear-cut example of political support to Pakistan in an Indo-Pak context, and much of China’s military backing to Pakistan is certainly focused on ensuring that it can still play a balancing role in the region. But from China’s perspective, Gwadar and CPEC look out well beyond any bilateral Indo-Pak issues – giving the Chinese navy a reliable set of facilities from which it can operate in the Middle East and North Africa, creating alternative routes by which it can import natural resources from the Gulf, helping to shore up the Pakistani economy, and so on. From Pakistan’s perspective, Gwadar clearly has strategic value vis-à-vis India but China is looking west with these plans and at the situation in Pakistan itself, not at its immediate neighbor.

It is said that in the coming decades Asia will be divided into two power centers, India and China. India has regained its stature and bearings only recently and has been engaged in partnership building with Mongolia, Japan, Vietnam and South Korea.  Do you think that these strategic alliances will take a formal shape in the years to come or will the new dialogue between Narendra Modi and Xi Jinping lead to a thaw in the relations and herald a new chapter in Sino Indian relations?

I suspect that both elements will develop simultaneously – neither China nor India has an interest in any heading down a path of all-out competition, and they both see areas where they can upgrade the relationship, most obviously on the economic front. The coming years are likely to see China and India hedging against each other, cooperating where it’s useful, competing actively across a number of areas, and preparing for scenarios in which developments take a turn for the worse. With Modi and Xi alike, there seems to be greater ease in accepting that this is likely to be the normal state of play.

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