"Pakistan plans to review or renegotiate agreements reached under China's Belt and Road Initiative (BRI)," Financial Times reported on Monday. It quoted a Pakistani official as saying the country's previous government did a bad job negotiating with China on China-Pakistan Economic Corridor (CPEC), leading to a debt burden in Islamabad. "Perhaps we can stretch CPEC out over another five years or so," the official said.
The article noted that Pakistan is "in the middle of a financial crisis and must decide in the coming weeks whether to turn to the IMF for its 13th bailout in three decades." The crisis is real. But the way of resolving it remains to be examined.
The problems Pakistan is confronting are inevitable in the process of industrialization. Quite a few developing countries are facing debt problems, a lack of funds, and are thus advancing industrialization in the face of great difficulties. But the only way to solve the puzzle is to keep pushing and boosting industrialization, instead of retreating from it.
As a Chinese saying goes, if you want to get rich, you have to build roads first. The "roads" in this proverb refers to infrastructure construction. Without electricity and transportation networks, it is impossible for any nation to develop manufacturing and logistics industries. The projects of CPEC, in this regard, can help Pakistan break the bottleneck in its development.
Take Gwadar, a port city of Pakistan as well as a crucial link of the CPEC, for example. It is now becoming a second Shenzhen "with a fully functional port terminal, free zone, business center development and prosperity," according to Pakistani media The Nation. Reports said the country is expecting around 400 companies to be registered in Gwadar Port Free Zone, which would provide job opportunities for over 38,000 local people.
Western media tend to connect the debt crisis in countries along the BRI with China. But on Saturday last week, Chinese State Councilor and Foreign Minister Wang Yi, who was visiting Pakistan, tossed out specific numbers to clarify such speculation. He said 47 percent of Pakistan's debt comes from multilateral financial institutions and among the 22 projects of the CPEC, 18 are directly invested in or aided by China, while only four are financed with China's concessional loans.
During Wang's tour, he articulated that China will encourage imports from Pakistan and work to broaden market access for Pakistan's agricultural products, and both sides will work to complete negotiations on a Free Trade Agreement by the end of the year. The two sides also reached consensus to focus on helping to develop Pakistan's manufacturing industry as well as its independent development capabilities, so as to make more Pakistani people benefit from the CPEC.
How should Beijing promote CPEC in the wake of these recent developments? Beijing will respect Pakistan's decision. It is Islamabad's choice whether to cut down some of its foreign cooperation based on its own capabilities. China is willing to coordinate with its adjustments. The BRI is an initiative, a platform for countries to seek an optimal way of joint development. It is not surprising to see problems during the process. What's important is resolving them through cooperation.