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Money talks: China’s purse strings direct Pakistan’s war on terror

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China is being lauded as Pakistan’s new partner, in the fight against regional terrorism, by offering soft loans in the interests of securing the China-Pakistan corridor, with some 71,000 Chinese nationals reportedly visiting the country in 2016.

Following this week’s BRICS summit, hosted by China, it is clear the region is looking for more than sheer military might, as offered by the US, in order to shore up future security. When President Trump accused Pakistan of continuing to provide a “safe haven to agents of chaos, violence and terror”, he failed to recognise that the South Asian nation has, in fact, made great strides in improving the security situation following a costly four-year crackdown on domestic insurgent groups.

These improvements are reflected in Pakistan’s macroeconomic performances since 2012, not least due to the relative confidence of investors in the $55 billion China-Pakistan Economic Corridor (CPEC), as part of China’s ambitious Belt and Road Initiative. As the Trump administration battles to define its foreign policy in Afghanistan and beyond, China’s intentions are easier to read: investors, rather than soldiers, are the key to peace in Pakistan.

Pakistan’s own war on terror has carried a substantial price tag, in both human and economic costs. The armed forces, which already siphon one-quarter of Pakistan’s $36 billion annual budget, saw a 9 percent rise in defence spending this fiscal year in addition to a 10 percent pay increase.

At the same time, the country’s current budget deficit more than doubled to $12 billion in 2016. With overt and covert anti-terror funds from the US reducing to a trickle, Pakistan is being forced to look further afield for allies who are willing to defend its position in the region, as well as inject the economy with much needed funding. Enter China.

In late August, Islamabad postponed a scheduled meeting with the Acting US Special Representative for Pakistan and Afghanistan, Alice Wells. Instead, the Chinese Special Envoy on Afghan Affairs Ambassador, Deng Xijun, arrived in the capital for crucial discussions with Pakistani authorities…

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