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Chinese investments cast shadow over Pakistan-India trade

PAKISTAN's growing dependence on Chinese investment is impacting India-Pakistan trade that has so far managed to achieve only a fraction of its true potential, according to Pakistan's political economist Professor S Akbar Zaidi.

India has fallen off Pakistan's economic radar after China started pouring in billions of dollars into the investment-starved country two years ago, reports the Calcutta Telegraph.

Unless China considers bringing India into the equation, trade between India and Pakistan may continue to lag, said Mr Zaidi, a visiting professor to Columbia University.

"Trade between the two countries (India and Pakistan) may leap to US$10-12 billion. But I don't think that is going to happen. We will probably be stuck between $2 billion and $2.2 billion, unless China steps in and plays a role in easing the differences between us," the professor said on the sidelines of a talk hosted by the Bengal Chamber of Commerce & Industries in Calcutta.

China is investing $56 billion in Pakistan's infrastructure and industries under the China-Pakistan Economic Corridor (CPEC). The corridor connects the landlocked western province of Xinjiang with the Gwador port in Pakistan's Sindh by road, rail, optical fibre and pipeline network. 

China is building power plants, fertiliser and pesticide units and a meat processing plant in Pakistan, in addition to being involved in coal mining.

"Pakistan has put all its eggs in China's basket and I don't think that is a good thing. We are not looking at India even though the two countries have much more in common," added Mr Zaidi.

Chinese influence over Pakistan's economy can be assessed from the fact that there are 750 Chinese companies operating out of Islamabad and there are 650 Pakistani companies with at least one Chinese director.

India had objected to CPEC as it would pass through Pakistan-occupied Kashmir. It also did not participate in China's larger economic outreach programme, One Belt and One Road (Obor), launched by Chinese president Xi Jinping last month. CPEC is part of the Obor initiative, along with the Bangladesh-China-India-Myanmar corridor.

Some 60 per cent of the India-Pakistan trade takes place through the Wagha-Attari border in Punjab. The trade is heavily skewed in favour of India, which exports cotton, cotton yarn, and textile machines. By sprucing up the infrastructure, trade between the two bitter rivals locked in a proxy war for decades, may grow, the economist said.
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