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](http://www.atimes.com/atimes/South_Asia/HK28Df01.html) **Good deals, but no nukes for Pakistan
**By Sudha Ramachandran
BANGALORE - Speculation in the run-up to Chinese President Hu Jintao’s visit to Pakistan indicated that deals that would “find no parallel in history” were in the offing. Specifically, the reports suggested that Hu would announce a deal with Pakistan promising civilian nuclear cooperation that would match the India-US deal.
In the event, Hu made no such offer, but there were plenty of other goodies to compensate for the lack of a nuclear deal. The 18 agreements ranging from defense cooperation to energy included
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a free-trade agreement (FTA) that is expected to boost bilateral trade from US$4.26 billion last year to $15 billion within five years.
The two countries also have agreed on a five-year plan to boost economic ties. Besides, Chinese and Pakistani companies have finalized 13 joint-venture agreements worth $3 billion. And Hu inaugurated a special economic zone near Lahore, which has been set up for Chinese business.
Sino-Pakistani defense cooperation has been taken to a new level with China agreeing to collaborate in the production of an airborne warning and control system (AWACS). Pakistan’s air force is already collaborating with China in the co-development and co-production of the JF-17 Thunder fighter aircraft. With regard to civilian nuclear energy, China, which has already helped build a 300-megawatt nuclear plant and is building another, reaffirmed its commitment to “continue to carry out such cooperation”.
Sino-Pakistan cooperation in many fields goes back several decades, and both countries are effusive in their description of their friendship. During his visit to Pakistan, Hu described bilateral relations as “higher than the Himalayas, deeper than the Indian Ocean and sweeter than honey”, while Pakistani President General Pervez Musharraf spoke of the “evergreen relationship” between the two countries.
And indeed the relationship has been an “all-weather friendship”, having survived the region’s turbulent politics as well as major realignments in international politics. A shared antagonism toward India keeps the friendship alive.
Pakistan sees China as its most dependable ally. Beijing is Pakistan’s largest supplier of conventional weapons and has played a key role in the latter’s nuclear and missile programs. It has contributed significantly to the country’s economic development. It is partnering in the construction of a port at Gwadar, contributing technical expertise and the bulk of the funding for the project.
For China, Pakistan is a useful counterweight to India. This is behind its efforts at building the country’s economic and military muscle. Pakistan also provides China with a link to the Muslim world.
But it was in the nuclear-power arena that Pakistanis had pinned their hopes. Media reports cited “sources” as saying that China had agreed to supply four nuclear power plants, while Pakistan was insisting on six. Apparently, Pakistani authorities were so sure of getting a deal that the Pakistan Atomic Energy Commission had even selected sites for the six new power plants.
“These expectations have been dashed with Hu not announcing any grand nuclear deal,” a Pakistani civil servant told Asia Times Online. “All that Pakistan got was a vaguely worded announcement of further collaboration.” Elaborating on other reasons for Pakistan’s disappointment he pointed to the “paradigm shift in China’s position with regard to civilian nuclear cooperation with India”.
During Hu’s visit to India, Beijing and New Delhi agreed to cooperate in civilian nuclear energy, a move that has been interpreted in some circles as a significant shift, given the decades-long hostile nuclear relationship between the two countries. Delhi is hoping that the shift will lead to support from China for the India-US nuclear deal when it comes up before the Nuclear Suppliers’ Group.
“Of course, India would have liked China to have explicitly endorsed the deal, but that would have been expecting too much of the Chinese at this juncture,” an official in India’s Ministry of External Affairs told Asia Times Online.
While some in India might be rubbing their hands in glee that the Pakistanis did not get the nuclear deal they were dreaming about, China watchers here are cautious in their assessment of Hu’s Pakistan visit. They are pointing out that there is no reason for Islamabad to be disappointed as the Chinese have, as always, been generous with Pakistan.
Take for instance China’s offer of collaboration with Pakistan on AWACS. “This is substantial hardware that China is giving Pakistan,” observed Lawrence Prabhakar, a China expert who is associate professor at the Madras Christian College in Chennai and research fellow at the Institute for Defense and Strategic Studies in Singapore. Besides, they have thrown in an FTA as an “added bonus”.
As for China’s reluctance to fulfill Pakistan’s nuclear wish list, Prabhakar points to Beijing’s concerns regarding poor physical safety of reactors in Pakistan. The Pakistani leadership will not admit this publicly but it is worried about the entrepreneurial network in nuclear technology and does not want to be seen to have been complicit in this again. This has prompted the Chinese leadership to move cautiously with regard to building more reactors in Pakistan, he says.
More important, Hu did not announce a grand nuclear deal during his visit because the Chinese “don’t do anything in haste”, observed Prabhakar. “They will wait to see what happens with regard to the India-US deal before deciding on their next step.”
The US House of Representatives and the Senate have given the green signal to the India-US nuclear deal but have endorsed different versions. These versions have to be reconciled before being put to vote before the Congress. China will wait to see the final version of the deal, “and then they will give a measured response”, said Prabhakar.
China is keen for a share in the business that will open up if the India-US nuclear deal becomes a reality. Hence its new openness with regard to nuclear cooperation with India. Besides, the “quiet endorsement” it extended to the India-US nuclear deal during Hu’s visit to India will “enable it to do a similar deal with Pakistan in future”, noted Prabhakar.
What India needs to note is that while China might not have granted Pakistan’s wish list during Hu’s visit, neither has it ruled out civilian nuclear cooperation with that country. It has left the issue open by holding out the promise of continued cooperation; at the same time, is has not committed to specifics at this juncture, preferring to wait and watch before taking the plunge.
Indian analysts are also drawing attention to the giant strides China has made in the region on the economic front. “That China has an FTA with Pakistan and has emerged as the largest trading partner of Bangladesh last year should remind New Delhi that its failure to expand economic cooperation with its important neighbors is proving to be a blessing in disguise for Beijing,” wrote noted security analyst Raja Mohan in the Indian Express.
“As its tight-fisted Commerce Ministry refuses to lift the many trade barriers with the neighbors and its cloistered security establishment prevents normalization of bilateral relations with Pakistan and Bangladesh, India has in effect given China a free economic pass in the region,” Mohan said. “While the Indian security establishment pats itself on the back for preventing Chinese investments in its border areas, Beijing’s economic presence all across India’s frontiers - from Pakistan in the west, through Nepal in the north and Bangladesh in the east to Sri Lanka in the south - will soon be a powerful reality.”
India’s political establishment might be upbeat about improving ties with China - Indian politicians frequently refer to the bhai-bhai (brother-brother) relationship - but business leaders continue to be wary of the dragon. “One look at India’s anti-dumping case history and it becomes clear why Indian business cannot yet trust its Chinese counterpart,” says a report in Economic Times. "The figures are mind-boggling.
“Of the 188 anti-dumping cases initiated by India since it kicked off the process in 1992, 89 are against Chinese companies … With such heavy dumping taking place in India by Chinese manufacturers, it is not surprising that the Indian industry sees red whenever there is a talk of extending market economy status to China.”
Solid facts rather than emotions lie behind India’s guarded approach to China.
Hu’s week-long visit to India and Pakistan has ended. India and China might be doing more business with each other than in the past, but there is little to encourage India to lower its guard.
At the end of his four-day visit to India, Hu in a speech delivered in Mumbai said China does not seek “selfish gains” in South Asia and is ready to play a “constructive role” for peace and development in the region. He will need to move beyond mere rhetoric to convince India.
Sudha Ramachandran is an independent journalist/researcher based in Bangalore.
