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China Avoids NSG Waiver Intitiative in Favour of Pakistan

President Asif Ali Zardari of Pakistan, who paid a bilateral visit to China from October 14 to 17,2008, was to return to Pakistan on October 17 and go back to Beijing on October 23 to attend the summit of the Asia-Europe Meeting (ASEM) being held in Beijing on October 24 and 25,2008. It remains to be seen whether he goes back himself as originally scheduled or deputes Prime Minister Yousef Raza Gilani to attend it.

2. Coinciding with his visit, one of the Chinese engineers kidnapped by the Swat branch of the Tehrik-e-Taliban Pakistan (TTP) on August 29,2008, reportedly managed to escape from custody and was picked up by a helicopter of the Pakistan Army before the TTP could re-capture him. However, the other engineer, who also managed to escape, was reportedly re-captured by the TTP before he could be picked up by the Pakistan Army.

3. This kidnapping incident, coming in the wake of three other incidents directed against Chinese nationals in Pakistan last year, is learnt to have figured prominently in the one-to-one discussions of Zardari with important Chinese investors and businessmen during which he invited them to invest more in Pakistan. Among those who called on him were Ma Zhigeng, Chairman of the NORINCO, Zhang Liansheng, Chairman of the Poly Technologies, Liu Minkang, Chairman, Chinese Banking and Regulatory Authority, and Fan Jixiang, President of the Sinohydro.

4.In an interview to the “People’s Daily”, Zardari claimed that the Chinese business executives, who met him, had expressed no security concerns about Pakistan. “I met with heads of many companies and 99.9 per cent told me how secure they were feeling,” he said. He added that though Pakistan had some problems, the Government was giving full attention to address the situation. He also said that he was trying to convince everyone that terrorism was a regional as well as an international problem and that the international community should come forward as Pakistan could not fight it alone. “We are looking towards the world for cooperation in curbing this menace.”

5. Jin Zheping, the Deputy General Manager of the China International Water and Electricity Corporation (CWE), is reported to have assured Zardari that the CWE would invest $1.7 billion for generating low-cost hydel electricity in Pakistan. A memorandum of understanding has already been signed for CWE assistance to one hydel project (the Bhasa dam) and CWE assistance for another (the Kohala dam) is under negotiation.

6. The visit also saw the announcement of Chinese assistance for launching a telecommunication satellite, named PakSat-1R, for Pakistan in 2011. The assistance will be provided by the China Great Wall Industry Corporation (CGWIC).

7. Among important Chinese leaders whom Zardari met were President Hu Jintao, Prime Minister Wen Jiabao, Jia Qinglin, Chairman of the Chinese People’s Political Consultative Conference, and Wu Bangguo, Chairman of the National People’s Congress. While the atmosphere of the visit and meetings had the usual warmth and friendliness marking China-Pakistan bilateral exchanges, in terms of concrete outcome the visit was not quite satisfactory from the Pakistani point of view.

8. Zardari was expecting three concrete results relating to an immediate Chinese credit to enable Pakistan meet its payment difficulties and avoid default of its international obligations due early next year, a Chinese initiative to get for Pakistan a waiver of the restrictions on nuclear trade from the Nuclear Suppliers’ Group (NSG) similar to the initiative taken by the US to get a waiver for India and a firm declaration of Chinese interest in the three pending proposals for a petrochemical complex in Gwadar and a railway line and a gas pipeline connecting Gwadar with the Xinjiang region of China.

9. Briefing the media after Zardari’s meeting with Wen Jiabao on October 16, Qin Gang, a spokesperson of the Chinese Foreign Office, said: “As a long friend of Pakistan, China understands it is facing some financial difficulties.We’re ready to support and help Pakistan within our capability.” But he did not mention any specific figure of the credit which China would be prepared to extend. China had agreed to provide $500 million in a concessional loan to help Pakistan meet its balance of payment needs in April last.

10.Before Zardari’s arrival in Beijing, Masood Khan, Pakistan’s Ambassador to China, had claimed that an agreement on civilian nuclear co-operation with China could be reached during the visit. No such agreement figures in the list of agreements signed by the two countries during the visit as released by the Xinhua, the Chinese New Agency. (Annexure).

11. It is, however, learnt from reliable sources that while the Chinese reiterated their commitment in principle made to Pervez Musharraf to supply two more nuclear power stations (Chashmas III and IV ), they avoided any commitment on Pakistan’s request for a Chinese initiative to get an NSG waiver. Without such a waiver, Chashmas III and IV would remain non-starters. In view of the expected US opposition to any waiver till Pakistan allows the International Atomic Energy Agency (IAEA) to have Dr.A.Q.Khan, the Pakistani nuclear scientist, interrogated by an independent team of investigators on his non-proliferation activities, China is not confident of a waiver in favour of Pakistan till the A.Q. Khan issue is resolved. It reportedly does not want to take any initiative in this matter lest it face an embarrassment if its proposal is rejected by the NSG. The present Government in Pakistan, like the previous Government of Musharraf, is opposed to any IAEA interrogation of Khan. The Chinese are also not very keen on that since Khan knows a lot not only about the proliferation activities of Pakistan, but also of China.

12. Farhan Bokhari, the Islamabad correspondent of the CBS News of the US, has reported as follows: “China has privately agreed to follow a “step-by-step” approach to fulfilling Pakistan’s aspiration for an expanded nuclear energy program, rather than sign an ambitious civil nuclear program of the kind recently struck between the U.S. and India, senior Pakistani and Western officials said on Thursday (October 16). Private discussions are believed to have been held on expanded nuclear cooperation between Pakistan’s president Asif Ali Zardari and Chinese leaders during Zardari’s four-day visit to China.A senior Pakistani government official, familiar with discussions between Zardari and Chinese officials, claimed Thursday that China had agreed to “consider further nuclear power reactors to fulfill our needs. The relationship (on the nuclear issue) remains intact”. Speaking to CBS News on condition of anonymity, the official added, “there is now a complete understanding on our future cooperation”. However, a second Pakistani official who spoke to CBS News on condition of anonymity said China is eager to avoid a direct confrontation with the West on its nuclear energy cooperation with Pakistan. “China is not seeking a head-on clash with anyone. It wants to broaden its relations with Pakistan but without the risk of a stiff U.S. reaction,” said the official. U.S. reluctance to offer a civil nuclear power agreement to Pakistan stems mainly from revelations in 2004 that Abdul Qadeer Khan, the founder of Pakistan’s nuclear weapons program, traded nuclear secrets and technology with Iran, Libya and North Korea. Khan has remained effectively under house arrest since then. Requests from the Western officials, notably the U.S., to interview Khan have all been denied by the Pakistani government.”

13. There was no reference to the pending Gwadar proposals during the visit. The bilateral trade between the two countries touched US$7 billion last year ($ 30 billion between India and China). It was agreed that the two countries would try to increase it to US$15 billion by 2011.

(The writer, Mr B.Raman, is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: ) ANNEXURE

Text of Pakistan-China joint statement

The following is the text of the joint statement between China and Pakistan issued on October 16, 2008, after the end of the formal talks between the leaders of the two countries.

“On the invitation of President Hu Jintao, President Asif Ali Zardari paid a state visit to China on 14-17 October 2008.

President Hu Jintao held talks with President Zardari. Wu Bangguo, Chairman of the Standing Committee of the National People’s Congress, Wen Jiabao, Premier of the State Council, and Jia Qinglin, Chairman of the Chinese People’s Political Consultative Conference, met Zardari respectively.

Talks between the two presidents and Zardari’s meetings with other Chinese state leaders were characterized by traditional warmth, friendship and mutual understanding. The two leaders reached broad agreement on strengthening China-Pakistan strategic partnership of co-operation and on international and regional issues of mutual interest under the new circumstances. The Pakistani president also held wide-ranging discussions with the leaders of Chinese corporations and financials institutions.

The leaders of the two countries reviewed with satisfaction the growth of China-Pakistan relations over the past 57 years since the two countries established diplomatic ties. They agreed that the friendship between China and Pakistan has withstood the test of time and practice, notwithstanding changes in the international, regional and domestic environments.

The all-weather friendship and all-round cooperation have become the distinctive features of China-Pakistan relations.

Both sides agreed that it is essential that the two sides make continuous efforts to strengthen good neighbourly relations and friendship, develop mutually beneficial cooperation and deepen strategic partnership of co-operation between China and Pakistan which serves the fundamental interests of the two peoples and contributes to peace and development in the region.

Both sides agreed that the Treaty of Friendship, Co-operation and Good-neighbourly Relations between the People’s Republic of China and the Islamic Republic of Pakistan (Treaty) signed in April 2005 is of great historic and immediate significance, laying a solid legal foundation for the long-term, stable and healthy growth of China-Pakistan relations. Both sides decided to abide by the policies and principles enshrined in the Treaty, earnestly implement the bilateral legal documents signed since the two countries established diplomatic ties and further intensify cooperation in the areas of economy, defence, science and technology, people to people contact, thus constantly advancing the China-Pakistan strategic partnership of co-operation.

China stressed that Pakistan is China’s good neighbour, close friend, dear brother and trusted partner. China will continue to view China-Pakistan relations from a strategic and long-term perspective, and make joint efforts with Pakistan to lift China-Pakistan Strategic partnership of co-operation to a new high.

Pakistan stressed that Pakistan-China relationship is the cornerstone of its foreign policy, and friendship with China represents the common desire of all Pakistani people. Pakistan appreciated the strong support and assistance provided by the Government and people of China to Pakistan in its economic development. Pakistan remained committed to continuing its policy of friendship towards China and making unremitting efforts to promote the healthy and steady growth of relations between the two countries.

Pakistan unequivocally upholds the one-China policy and considers Taiwan as an inseparable part of the People’s Republic of China and supports all efforts made by the Chinese government to realize national reunification.

China appreciated Pakistan’s long-term and staunch support to China on issues concerning China’s sovereignty and territorial integrity, reaffirmed its support for Pakistan’s effort to uphold its sovereignty, independence and territorial integrity, and appreciated Pakistan’s important role in promoting regional peace, stability and security and strengthening international counter-terrorism efforts.

Both sides opposed to all forms of terrorism, extremism and separatism, resolved to co-operate with each other to fight the above-mentioned three forces. China conveyed its complete support to Pakistan’s commitment and efforts to fight terrorism and appreciated the sacrifices made by the government and people of Pakistan in this regard.

The two sides agreed that economic co-operation is an important part in the strategic partnership between the two countries. The two countries enjoy great economic complementarity and should fully tap the potential and comprehensively deepen mutually beneficial co-operation in the economic field.

Both sides agreed to fast track the implementation of the Five Year Development Programme on Economic Co-operation and make full use of the Free Trade Agreement in Goods and Investment and Pakistan-China Joint Investment Company. In this regard, they agreed to convene a meeting of Pakistan-China Economic Co-operation Group under the Five Year Development Programme on Economic Co-operation at an early date. They also agreed to hold the next meeting of the Joint Economic Commission at the convenience of both countries.

Both sides agreed to enhance co-operation to further develop and boost Pakistan’s Mineral and Energy sectors as well as broaden financial and banking sector co-operation. They also agreed to further enhance ‘connectivity’ by developing new communication links including fibre optic links. They agreed to explore the concept of Integrated Border Management, overland trade and development of trans-border economic zones.

Both sides agreed to maintain communication and co-ordination on major international and regional issues to safeguard their common interests. Both sides agreed to continue to co-operate closely on issues such as the reform of the United Nations, climate change and energy and food security to promote world peace and development.

Zardari offered congratulations to the Chinese government and people on the successful hosting of the Beijing Olympic Games and the successful completion of Shenzhou VII’s mission. Hu Jintao congratulated Zardari on his election as the president of Pakistan and thanked Pakistan for its valuable assistance in the wake of the devastating earthquake in Wenchuan, China. He also appreciated Pakistan’s support to ensure the success of the Beijing Olympics and Paralympics Games. Pakistan applauded the outstanding achievements China has made in the 30 years of reform and opening-up and believes that China’s development will contribute to world peace and prosperity.

Zardari invited Hu Jintao to visit Pakistan once again at his convenience. Chinese president thanked Pakistani president for his kind invitation.

Both sides signed the following agreements and memoranda of understandings (MoUs) during the visit:

1. Agreement on economic and technical co-operation between the Government of the Islamic Republic of Pakistan and the Government of the People’s Republic of China.

2. Amending protocol to free trade agreement between the Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan.

3. Framework Agreement on co-operation in the field of minerals between the national development and reforms committee of the People’s Republic of China and the Ministry of Petroleum and Natural Resources of Pakistan.

4. MoU on co-operation between the Ministry of Land Resources of the People’s Republic of China and the Ministry of Petroleum and Natural Resources of Pakistan.

5. Agreement on environmental protection co-operation between the Ministry of Environmental Protection of the People’s Republic of China and the Ministry of Environment of Pakistan.

6. Framework agreement for co-operation in the field of radio and television between the state administration of radio, film and television, Government of the People’s Republic of China and the Ministry of Information and Broadcasting, Government of the Islamic Republic of Pakistan.

7. Paksat-1R satellite procurement contract by and between China Great Wall Industry Corporation (CGWIC) and Pakistan Space and Upper Atmosphere Research Commission (SUPARCO).

8. MoU on scientific collaboration in agricultural research and technical co-operation between Chinese Academy of Agricultural Sciences and Agricultural Research Council of Pakistan.

9. Agreement on properties exchange between the Ministry of Foreign Affairs of the People’s Republic of China and the Ministry of Foreign Affairs of the Islamic Republic of Pakistan.

10. Co-operation agreement between Beijing Museum of Natural History of the People’s Republic of China and the Museum of Natural History of the Islamic Republic of Pakistan.

11. MoU on co-operation between the cricket association of the People’s Republic of China and the Cricket Board of the Islamic Republic of Pakistan.

12. MoU regarding the project of x-ray container and vehicle inspection system between NUCTECH Company Limited, Tsinghua University, the Ministry of Education of the Peoples Republic of China and the Ministry of Interior of the Islamic Republic of Pakistan.

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