China signs $35bn in deals with Pakistan

Chinese premier Wen Jiabao has unveiled $35bn in economic deals with Pakistan, as part of a plan to commercially integrate the nation with China’s western region.

During a visit to Pakistan, Mr Wen on Sunday promised to create a deep alliance between Islamabad and Beijing based on economic co-operation that would tie the south Asian nation to China’s economic transformation. Mr Wen unveiled $20bn in government-to-government contracts and another $15bn in private sector deals.

China wants to diversify its relationship with Pakistan – which is based on supplying arms – to build infrastructure that would help China secure land access to the Arabian Sea. Such transport links would boost Chinese exports to the Middle East and Europe, and help secure energy and commodity imports from the Middle East and Africa.

The agreements outstrip the $16bn in deals China signed with India when Mr Wen recently visited Delhi. They are also a firm signal that Pakistan has an alternative to the US, which considers Pakistan a key – but not always reliable – ally in the fight against Islamic extremism and supplies considerable financial and military assistance.

The wide-ranging deals announced include the development of oil, gas and mineral resources in Pakistan. China also agreed to help Pakistan develop a space industry, expertise in oceanology, and more electronics and heavy industry.

The deals also include Chinese investment in the Karakoram Highway, which connects Islamabad to the north-western Chinese province of Xinjiang.

“This will be an important step for China to build road and rail links to eventually link Xinjiang to Pakistan’s southern coast along the Indian Ocean,” said a Pakistani official.

Mr Wen described the friendship between Beijing and Islamabad as “solid as a rock”, an affirmation that causes anxiety in India which views ties between China and Pakistan with increasing suspicion as a strategy to isolate it in south Asia.

Senior Pakistani officials applauded the magnitude of the Chinese engagement, saying the Chinese premier’s visit – the first in five years – represented Beijing’s most concerted attempt to help transform Pakistan’s economy.

Mr Wen told Pakistan’s parliament that China wanted to forge “deeper, closer and stronger” ties with Pakistan. The Chinese premier said “China and Pakistan will remain brothers for ever” in spite of Pakistan’s vulnerability to Islamist insurgency.

Shortly after Mr Wen spoke, Chaudhary Nisar Ali, leader of the opposition in parliament, said: “You can go to any corner of our country and ask anyone about China and they will only say, China is a true friend. We [politicians] may have our differences but there is no difference on China.”

But other senior politicians were careful not to interpret Chinese assistance as undermining efforts to secure a lasting peace with arch-rival India. Yusuf Raza Gilani, Pakistan’s prime minister, said the warmth of the bilateral relationship between his country and neighbouring China was “not directed against any country”.