This week was dominated by two kinds of major developments. First was China’s response to the issues of India’s inclusion in NSG, ban on Masud Azhar and lately, India’s labeling of Pakistan as ‘mothership of terrorism.’ Second was IMF’s repeated suggestions to Pakistan to handle CPEC rather shrewdly. Some of China’s top analysts criticized India’s closure of border with Pakistan. Also China’s envoy made clear that Western Route is part of CPEC. Afghanistan showed its desire to be part of CPEC.

NSG and Azhar:

China has told India about its readiness to continue dialogue with New Delhi to “build consensus” on the issue of latter’s membership at NSG (Nuclear Supplier Group). The statement showed a sort of fluctuation in Beijing’s previous stance when it linked India’s membership of NSG to NPT (Nuclear Non- Proliferation Treaty).[i]  These views were expressed by Chinese Vice Foreign Minister, Li Baodong, ahead of President Xi Jinping’s visit to India for attending BRICS summit. However, he added that “things need to be in keeping up with procedures, norms and regulations of the NSG.”[ii] Another notable streak of China’s policy came to the fore when Vice Foreign Minister defended Beijing’s decision to thwart India’s efforts at UN to impose ban on Masood Azhar, head of Jaish-e-Muhammad as a “technical hold.”  He said that “[T]here should be no double standards on terrorism nor should one pursue its own political gains in the name of counter-terrorism.”[iii]

Border Closure:

Chinese analysts have termed India’s decision of closing border with Pakistan as “irrational”. Hu Zhiyong, a research fellow from Institute of International Relations of the Shanghai Academy of Social Sciences told Global Times that “India is making a very irrational decision, since no exhaustive investigation has been conducted after the Uri incident, and no evidence proves Pakistan is behind the attack.”[iv] Hu said that “[S]ince Pakistan is China’s all-weather strategic partner, India’s decision would make China-Pakistan-India relations more complicated.” He was of the opinion that pacific resolution of Kashmir disputes is in the interest of China’s homeland security, especially its western regions. Similarly, Wang Dehua, Director of the Institute for Southern and Central Asian Studies at the Shanghai Municipal Center for International Studies also echoed the same opinion. He said that “the country’s decision reflects its Cold War mentality, and would only cause deeper hatred among residents living in Indian-and Pakistan-controlled Kashmir.”[v]

Caution on CPEC:

In its final review of Pakistan’s just concluded programme, International Monetary Fund (IMF) has shed light on the potential costs and benefits of CPEC.  The report says that although at the early stage of investment in the project, Pakistan will benefit from FDI inflows, the import requirements of these projects “will likely offset a significant share of these inflows.”[vi]. For example, CPEC-related imports could count for 11 percent of imports forecasted by 2020, but the inflows will touch 2.2 percent of GDP during the same time period. In a special chapter on the macroeconomic impacts of CPEC, the report said that in the short term CPEC would lead to increase in investment and growth but in the medium and long terms it will entail risks of repayment obligations and profit repatriation.[vii] Few days ago, IMF’s mission chief to Pakistan, Herald Finger, echoed more or less the same views. He said that once Chinese investors start reaping benefits from their investments in CPEC, the balance between inflows and outflows can be disturbed to the disadvantage of Pakistan.[viii] IMF added that Pakistan therefore, needs to make a sound cost and befits evaluation and realistic forecasts of macroeconomic and financing conditions.

Western Route:

China’s ambassador to Pakistan, Sun Weidong, has said that that the Western Route is definitely part of China-Pakistan Economic Corridor. His affirmation has come at the time when questions over the fate of western route are being raised by certain quarters in the country. He added that “all the routes lead to development and prosperity” and that “CPEC will make its contribution to reviving the Silk Route Spirit.”[ix] The ambassador clarified that there were three key points of the spirit: openness, inclusiveness and mutual learning.[x]  He said that sixteen early harvest projects are under construction with cumulative investment of $13.6 billion and tens of thousands of jobs have been created for local people.

Afghanistan:

Afghanistan’s ambassador to Islamabad, Dr. Omar Zakhilwal, has expressed his country’s desire to become part of China-Pakistan Economic Corridor. [xi] He said that CPEC is a great project that is as relevant to Afghanistan, as it is to Pakistan. He reckoned what is good for Pakistan would also be good for the entire region.[xii] He hoped that by becoming a part of CPEC, Afghanistan can recover the damages it has suffered during the decades long war.[xiii] Afghanistan’s readiness to join CPEC is a positive development as relations between Pakistan and Afghanistan have deteriorated over the last months.

Terrorism: In a major development, China rose to the defense of its ‘all-weather friend’ Pakistan after India accused Islamabad for fostering terrorism. Indian Prime Minister, Narendra Modi, called Pakistan as “a mothership of terrorism” at a BRICS summit in Goa. In a biting response to India’s statement, spokeswoman for Chinese Foreign Ministry Hua Chunying said that Beijing was against the move of linking any country to terrorism.[xiv]  When asked about Modi’s statement, Chinese Foreign Ministry spokeswoman said that China opposes all forms of terrorism and that the international community should enhance counter-terrorism cooperation. She also emphasized that “[W]e also oppose the linking of terrorism to any country, ethnicity or religion. This is China’s consistent position.”[xv] Clarifying further China’s stance on the subject, she said that “[E]veryone knows that India and Pakistan are victims of terrorism. Pakistan has made huge efforts and great sacrifices in fighting terrorism. I think the international community should respect this.”[xvi] New Delhi’s efforts in this regard seems to have been foiled by China at least at the BRICS platform.

[i] Aneja, Atul, (2016, October 10). China dispels hopes of early breakthrough on NSG, sticks to its guns on Azhar. Retrieved on October 10, 2016, from  http://www.thehindu.com/news/national/china-dispels-hopes-of-early-breakthrough-on-nsg/article9206364.ece

[ii] The newspaper correspondent, (2016, October 11). China insists on consensus for India’s NSG bid, sticks to Jaish leader stand. Retrieved on October 11, 2016, from https://www.dawn.com/news/1289399/china-insists-on-consensus-for-indias-nsg-bid-sticks-to-jaish-leader-stand

[iii] Agencies, (2016, October 11). China’s straight talk leaves India reeling. Retrieved on October 11, 2016, from  http://tribune.com.pk/story/1196963/chinas-straight-talk-leaves-india-reeling/

[iv] Dawn.com, (2016, October 11). Irrational border closure a set-back to Paki-India ties: Chinese analysts. Retrieved on October 17, 2016, from http://www.dawn.com/news/1289476

[v] Xiaci, Deng, (2016, October 11). ‘Irrational’ border closer a setback to India-Pakistan ties. Retrieved on October 17, 2016, from  http://www.globaltimes.cn/content/1010586.shtml

[vi] Husain, Khurram, (2016, October 17). IMF warns of looming CPEC bill. Retrieved on October 17, 2016, from https://www.dawn.com/news/1290523/imf-warns-of-looming-cpec-bill

[vii] Kiani, Khaleeq, (2016, October 17). The IMF’s mixed CPEC ranking.  Retrieved  on October 17, 2016, from http://www.dawn.com/news/1290465/the-imfs-mixed-cpec-ranking

[viii] Kiani, Khaleeq, (2016, October 14), CPEC Project, high growth crucial for prosperity:IMF. Retrieved on October 17, 2016, from  https://www.dawn.com/news/1289773/cpec-projects-high-growth-crucial-for-prosperity-imf

[ix] By correspondent, (2016, October 17). Western route definitely part of CPEC: Sun Weidong. Retrieved  on October 17, 2016, from  https://www.thenews.com.pk/print/157674-Western-route-definitely-part-of-CPEC-Sun-Weidong

[x] APP, (2016, October 17). Western route definitely part of CPEC: Chinese envoy. Retrieved on October, 2016, from http://www.dawn.com/news/1290497/western-route-definitely-part-of-cpec-says-chinese-envoy

[xi] Radio Pakistan, (2016, October 15), Afghanistan wants to be part of CPEC: Envoy. Retrieved on October 17, 2016, from http://www.radio.gov.pk/15-Oct-2016/afghanistan-wants-to-be-part-of-cpec-envoy

[xii] INP, (October 15, 2016), Afghanistan wants to be part of CPEC: envoy. Retrieved on October 17, 2016, from http://nation.com.pk/international/15-Oct-2016/afghanistan-wants-to-be-part-of-cpec-envoy

[xiii] Online, (2016, October 15). Afghanistan wants to be part of CPEC: envoy. Retrieved on October 17, 2016, from http://www.newsmedialive.com/afghanistan-wants-part-cpec-envoy/

[xiv] PTI, (2016, October 17). China opposes Modi linking Pakistan with terror. Retrieved on October 18, 2016, from http://www.thehindu.com/news/international/china-defends-pakistan-after-modis-mothership-of-terrorism-remark/article9230771.ece

[xv] News desk/ Reuters, (2016, October 18). Modi’s BRICS offensive falls flat. Retrieved on October 18, 2016, from http://tribune.com.pk/story/1201421/terror-mantra-modis-brics-offensive-falls-flat/

[xvi] Reuters, (October 17, 20106). China defends Pakistan after Modi’s ‘mothership of terrorism’ statement. Retrieved on October 17, 2016, http://www.dawn.com/news/1290542/china-defends-pakistan-after-modis-mothership-of-terrorism-remark