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National Institute of Pakistan Studies
Name of ScholarSabahat Jaleel
Title of Dissertation China’s Economic Policies towards India and Pakistan (2001-2015)
Issue Date2021
PublisherNational Institute of Pakistan Studies, Quaid-i-Azam University, Islamabad, Pakistan

The event of 9/11 and the subsequent war on terror have changed the world. Regional cooperation and integration have become hallmark in conducting the relations among states. China’s bilateral relations are understood in the framework of complex interdependence. China has devised and pursued rigorous policy of economic and strategic cooperation with the regional countries especially Pakistan and India as China is required to maintain the growth rate of its economy even in the face of challenges faced from US and its allies in the Pacific in the form in indirect containment. China therefore turned toward South Asian region to counter the US challenge in the Pacific and Indian Ocean. Pakistan, being economically deteriorated, responded in a positive way to meet the Chinese aspiration of securing a relatively secure and short trade route to sustain its economy. It resulted in inflow of huge amount in the form of development and support for infrastructure and energy China has also managed to develop viable economic relations with India as it is a big and emerging market for Chinese goods and investment. It has tried to enhance the volume of trade with India and also tried to minimize the conflicting issues. India has also responded positively to enhance foreign investment in its economy. So, China relations towards India and Pakistan are based on dual nature also based on the national interests of one another. The relations are not reflecting win-win situation as there are numerous consequences (arm race, local industrial deterioration etc.) along with the economic development and enhancement of strategic capabilities. The study is an attempt to analyze the mutual gains and impacts of growing Chinese economic interests in the South Asian region especially Pakistan and India. It is hypothesized that Chinese economic policies are having substantial effects on the South Asian economies and giving rise to regional cooperation and integration. The study would be useful for a large bunch of society including policy maker, economist, historian and students of Pakistan economy, International relations, and political science. It would also benefit the entire person who has interest in understanding the complex nature of relations among the states.

The work is comprised of seven chapters besides conclusion. The first chapter provides an introduction which focuses on the growing influence of China towards India and Pakistan. Overall, introduction of topic with literature survey and research technique.

In chapter two, theories of realism and complex interdependence are discussed with reference to Chinese policies since the start of the new millennium (2001-2015). A discussion on Chinese economic policies to reinforce the claims of these theories is given. This chapter also explains the theoretical application with reference to China bilateral relations towards Pakistan and India.

Chapter three investigates the evolution of bilateral relations between China-Pakistan in a historical context. Moreover, the chapter explores China-India’s historical ties since its independence to the new millennium.

Chapter four deals with the Chinese economic progression (1949-2015) and discusses the major policies of China, due to which the Chinese economy transformed. Furthermore, it also explores the economic policies of China and its impact on the Chinese economy. Especially, open-door policy due to which the Chinese economy is transformed is explored.

Chapter five focuses on the Chinese policies and Pakistan Economy in the 21st Century. Pakistan is economically rather unstable and is an energy-starved country. This chapter explains the factors that are responsible for the present dismal economic conditions of Pakistan. Economically, Pakistan is almost on the verge of collapse. Inflation and poverty are constantly rising. The import-export deficit and trade deficit are also rising. Moreover, this chapter discusses the economic policies of China towards Pakistan. It elaborates on Chinese trade, industrial, and export-related policies. Furthermore, this chapter discusses the impact of Chinese economic policies on the economy of Pakistan. This had a profound effect on the economy of Pakistan. China is providing trade facilities to strengthen the economic position of Pakistan.

Chapter six deals with the Chinese-Indian economic cooperation in the 21st Century and its implications for Pakistan. Growing China-India relations have regional security, military and economic implications. It is expected to spur regional peace, security and economic stability. Pakistan, on the other hand, has developed certain concerns over China-India ties. It demands certain steps on the part of Pakistan to adjust to the situation. Pakistan has already devised certain policy changes in this regard.

Finally, chapter seven discusses the China-Pakistan Economic Corridor (CPEC) and its Regional Implications. The China and Pakistan’s officials stated then position categorically about CPEC. Both countries have dubbed it as an economic endeavour to transform Pakistan’s fragile economy into a vibrant and thriving economy to maintain its pace with global economic trends. Though, the regional countries like India are not that happy with the initiation of CPEC. India is apprehensive about the outcome of CPEC. Also, America has shown its concerns about the routes of CPEC and the intentions of China through this gigantic investment.