China and Pakistan

Pakistan is gradually inching towards a critical juncture in its foreign policy: a definitive choice between the US and China. Until now, our diplomatic balancing act has kept us afloat, but the geopolitical tug-of-war between these two powers is intensifying, and neutrality is becoming increasingly untenable. Hina Rabbani Khar had once warned against chasing Western approval at the cost of our “real strategic” ties with China—a sentiment echoed by Khawaja Asif. Yet, despite this strategic inclination, the stark economic realities tell a different tale. Our markets are tethered to the West, while our military and debt obligations lean heavily toward China. We export to the US and EU to earn capital, only to turn around and spend it on Chinese machinery and arms. This paradoxical dependence highlights our vulnerability and lack of economic autonomy.

What makes matters more precarious is the scale of our entanglements. Over half of Pakistan’s bilateral debt—about $23.7 billion—is owed to China, not to mention the critical dependency on Chinese weaponry, training, and spare parts. While IMF bailouts—largely influenced by the US—remain our go-to escape hatch, they too come with silent stipulations that undermine Chinese engagements. China, meanwhile, seems to be losing patience with Pakistan’s repetitive pleas for financial rescue, especially after multiple terror incidents targeting its personnel and our inability to meet repayment deadlines. The real crisis isn’t just diplomatic; it’s structural. Our addiction to episodic bailouts is our Achilles’ heel. If we fail to fix this recurring ailment, we will be dragged into a binary choice that neither side will let us avoid—each decision carrying enormous strategic and economic consequences.

Overview:

The article highlights Pakistan’s growing dilemma of choosing between China and the United States, due to its intertwined economic, military, and diplomatic ties with both powers. It stresses the need for a long-term structural solution to Pakistan’s bailout addiction and economic dependency.

NOTES:

This article is a critical case study in Pakistan’s foreign policy challenges and can be linked to international relations, strategic studies, and political economy. It provides essential knowledge into the dynamics of global power shifts, dependency theory, and debt diplomacy. It emphasizes how geopolitical alignments are not just diplomatic choices but deeply rooted in economic structures, trade patterns, and defense linkages. Aspirants should particularly analyze the intersection of diplomacy, economic survival, and strategic dependency when responding to questions related to Pak-China, Pak-US relations, or the global power struggle.

Relevant CSS syllabus topics:

• International Relations: Global power dynamics, China-US rivalry, Pakistan’s foreign policy
• Pakistan Affairs: Pak-China economic ties, CPEC, IMF relations
• Current Affairs: Economic diplomacy, strategic partnerships, debt traps

Notes for beginners:

Pakistan exports more to the US and EU than it imports, meaning it earns profit from them. However, it spends most of this profit on importing goods from China, especially machinery. This creates a double dependency: we rely on Western markets for income and on China for goods and arms. For example, between 2019 and 2024, Pakistan imported 81 percent of its arms from China, costing over $5 billion. On the other hand, China is also the biggest holder of Pakistan’s bilateral debt, with $23.7 billion owed. These figures show that choosing one side over the other would mean major sacrifices.

Facts and Figures:

• Pakistan imported $5.28 billion worth of arms from China between 2019 and 2024
• These imports made up 81% of Pakistan’s total arms imports during that period
• This share increased by 7 percentage points compared to the previous five-year span
• Pakistan owes $23.7 billion to China out of a total $41.7 billion in bilateral external debt
• Of this Chinese debt, $8.2 billion comprises swaps and deposits with the central bank
• Chinese debt accounts for nearly one-fourth of Pakistan’s total external debt
• Pakistan has a trade surplus with the US and EU, and its largest trade deficit is with China
• Pakistan’s economic bailouts mainly come from American-led institutions like the IMF
• Pakistan requires regular debt rollovers and delays in repayments on Chinese projects since 2019

To wrap up, This article is a compelling warning bell for Pakistan’s policymakers. The luxury of indecision is fast fading. We must develop sustainable economic strategies that reduce dependency on both powers to safeguard our sovereignty. Strategic neutrality cannot be maintained unless it’s backed by economic independence. Without reform, we risk being squeezed into making a choice that could define our national trajectory for decades.