On the one hand, Pakistan keeps China entangled by highlighting the potential of the CPEC; on the other, it abides by the dictates of the IMF to get new loans and delays CPEC projects.

Ishaq Dar, the Deputy Prime Minister and Foreign Minister of Pakistan, recently said that “Pakistan and China share a converging vision on regional and global issues.” Dar’s silver-tongue didn’t spell out the “vision”; he doesn’t have one. Pakistan doesn’t have one. That is the reason for its consistent loan-seeking and reliance on foreign bailouts to keep the country’s economy afloat.

Islamabad has been knocking at every possible door with its begging bowl. It holds the record of taking the maximum number of loans from the International Monetary Fund (IMF) – 23 in a short span of over 75 years since joining the financial body in 1950.

A part of Dar’s statement highlighted the true intention behind Pakistan’s relationship with China. Dar said that the ties between Islamabad and Beijing have “grown from strength to strength into a robust economic and strategic partnership”. The downside of the latter part of the statement is that it is overwhelmingly one-sided, heavily favouring Pakistan.

Pakistan has been shrewd in buttering up China to extract maximum economic help from the Chinese. Celebrating Pakistan-China’s 75th anniversary of diplomatic relations with much fanfare remains part of the same policy. Even the Senate passed a resolution praising China for its support for Pakistan. The latter, in turn, has led to Beijing’s entanglement in Pakistan’s economic mess.

Pakistan has become a rentier state, living off financial support provided to it by others. It has time and again failed abysmally to reform its economic structure. From the money coming from outside the country, the ruling elite and the military establishment siphon off a large chunk. Some portion of it is used to manage macroeconomic indicators, to keep hopes of the local population alive and, at the same time, keep money flowing in from countries like China, Saudi Arabia, Qatar and international financial institutions.

Islamabad’s relations with China are emblematic of what can be called Pakistan’s rent-seeking policy. For example, the China-Pakistan Economic Corridor (CPEC) has been presented by Islamabad as a “game changer” for the country. The project has been seen as vindicating “ironclad friendship” between Pakistan and China. It is sold to build infrastructure, create jobs, and transform the country’s economic structure for lasting suitability.

Hardly anything concrete has been achieved from the billions of dollars of investment from China. In the last few years, about $8 billion in potential investment was lost due to the failure to woo foreign investors. An editorial in Dawn vindicates the larger failure of the project: “The gap between ambition and delivery is too wide to ignore. The fact that only four SEZs have moved beyond the planning stage in over a decade exposes the deeper failure of execution.” This remains important as 75 per cent of the CPEC was supposed to go into the development of new and old Special Economic Zones (SEZs) that could have boosted outputs to be transported on the corridor to other countries, helping in increasing exports.

Pakistan’s decision not to establish SEZs was taken because the IMF had set no SEZ condition for new loans. On the one hand, Pakistan keeps China entangled by highlighting the potential of the CPEC; on the other, it abides by the dictates of the IMF to get new loans and delays CPEC projects. In this way, it keeps both sponsors hooked.

Despite all hyperbolic talks and symbolism about the potential of the project, given Pakistan’s structural constraints for economic reforms and security threats for foreign investors, CPEC has underperformed in achieving whatever goals it was supposed to achieve. Already, various issues are being raised over the CPEC. Many projects started since it was rolled out in 2014 have not been completed; work on many goes slowly, and many are yet to take off. And whatever has been completed has not yielded economic benefits.

China has realised that. The Chinese have expressed their frustration with Pakistan time and again. The Chinese were “not happy with the current progress of CPEC projects” and wanted the government of Pakistan to work to remove bottlenecks in the implementation of the project. Later, China’s concerns were compounded by increasing armed attacks in Balochistan, also targeting Chinese investments and nationals working on various projects and political instability in Pakistan, asking Pakistan to overcome its political crisis. None of these issues has been addressed. In fact, armed attacks in Balochistan have increased, and political instability remains.

There is a difference in the views of CPEC as well. While for Pakistan the CPEC is projected as a solution to all its problems, for China, it is part of larger Belt and Road Initiative (BRI). Therefore, expectations of the two are consequently different. Both, China and Pakistan, however, are aware of the fact that the CPEC is not meeting the desired expectations. Still, they keep selling it, in Pakistan particularly, by overstating its potential. Both countries have their interests in doing so; more so, Pakistan.

Pakistan’s foreign exchange reserves always fall short of the country’s needs to pay for imports and pay back loans to countries and institutions. Pakistan has mostly suffered a current account deficit; lately, again in April, the current account deficit was $324 million. That being the case, Pakistan needs two things: continuous foreign financial aid and its deferment, since it cannot pay back loans on time.

That is the reason Pakistan wants to be in China’s good books: it does so by showering praise on China and highlighting the potential of CPEC, which it knows very well has not been achieved. By rolling a narrative about “iron-clad” relationship, “all-weather” friendship, etc., Pakistan seeks keep China hooked on to the Pakistani dream. Time to time, high level visits and requests from the Pakistani side aim to convince China about investing its fortunes in Pakistan. The recent visit by President Asif Zardari to China was also aimed at securing Chinese assurance to stay engaged economically under CPEC.

Pakistan is eternally busy dragging China into various sectors of its economy. After welcoming Chinese investment in infrastructure, industry and agriculture, Pakistan has now opened the defence sector to China. During Zardari’s visit, it was clear that Islamabad wanted to present provinces as new potential investment options. He went on to sign memorandums of understanding (MoUs) on agriculture technology, water desalination, and tea production, with a focus on provincial-level collaboration: at least two agreements were signed with the Sindh Government.

Even China seems to know it well and has lost its enthusiasm in CPEC. Given the failure of CPEC to achieve its goals, its consistently rising costs, and the security threats to the investment, China now wants to protect the huge investment at all cost. To do so, it has announced new small projects — more to keep a watch on the current investment than being hopeful of securing benefits from them. China has not so far announced any major investment, knowing that previous ones have not yielded desired dividends.

Pakistan has been trying to increase its labour-intensive exports but faces tough competition from countries like Bangladesh and Vietnam. Any possible success in this sector would depend on credible policy determination and a viable business environment. Both these are lacking in Pakistan. And given the mindset of the Pakistani ruling elite, they are likely to continue their rent-seeking policy vis-à-vis China by playing various cards, like offering new sectors for investment, of late.

It is unlikely, however, that the inscrutable but highly mercantile Chinese will fall for Pakistani charm in the realm of economics. This would mean that while Pakistan-China will try to remain geopolitically together, geo-economic bonding between the two will not be as strong as Pakistan would like the world to believe.  

Disclaimer: Views expressed by writers in this section are their own and do not reflect Milli Chronicle’s point-of-view.

Pakistan’s Inter-Services Intelligence (ISI) is leveraging ISKP as a strategic asset to subdue the Afghan Taliban.

In the desolate, mineral-rich expanses of Afghanistan, a new chapter of the “Great Game” is being written, one where the old rules of insurgency and statecraft are colliding with the ruthless ambitions of the Islamic State Khorasan Province (ISKP).

For Beijing, the withdrawal of Western forces from Kabul was supposed to herald a golden era of economic expansion—a chance to extend the Belt and Road Initiative (BRI) into the heart of Central Asia.

Yet, as Chinese engineers break ground and diplomats shake hands with the Taliban, a sinister reality has emerged. China is no longer just an investor; it is a target. And arguably the most disturbing element of this security crisis is not just the ferocity of the jihadists, but the calculated geopolitical machinations of China’s “all-weather friend,” Pakistan.

The Dragon in the Crosshairs

The resurgence of ISKP in the post-US Afghanistan landscape poses an existential threat to Chinese interests that Beijing appears ill-equipped to handle. Unlike the Taliban, who crave international legitimacy and economic aid, ISKP operates on a nihilistic theology that views the Chinese state not as a partner, but as a godless oppressor of the Uyghur Muslims.

Intelligence reports and propaganda channels from the group have increasingly explicitly included Chinese citizens in their “kill lists,” marking a terrifying pivot from local sectarian violence to transnational terrorism.

This is not merely rhetoric. ISKP has engaged in a systematic campaign to obstruct the China-Afghanistan cooperation process. By attacking Chinese personnel, hotels frequenting Chinese businessmen, and infrastructure projects, they aim to achieve a dual victory: punishing Beijing for its Xinjiang policies and humiliating the Taliban administration by exposing its inability to protect its most powerful patron.

Every dead Chinese engineer is a billboard for the Taliban’s security failure, driving a wedge between Kabul and Beijing. For China, the risk is compounding; their economic strategy relies on stability, yet their very presence incites the instability they fear.

The Double Game: Islamabad’s Dangerous Proxy

However, to view the ISKP threat solely as a byproduct of Afghan chaos is to miss the deeper, more cynical geopolitical undercurrents. Security analysts and regional intelligence have long pointed to a disturbing pattern in Pakistan’s strategic calculus—a continuation of the “double game” that once bedeviled the Americans.

The central allegation, supported by a growing body of evidence, is that Pakistan’s Inter-Services Intelligence (ISI) is leveraging ISKP as a strategic asset to subdue the Afghan Taliban.

Islamabad finds itself in a precarious position. The Afghan Taliban, once their proxies, have become defiant, sheltering the Tehrik-i-Taliban Pakistan (TTP) and refusing to recognize the Durand Line. In response, observers argue that the Pakistani security establishment has tacitly allowed ISKP to operate as a counter-pressure force.

By facilitating—or at the very least, turning a blind eye to—ISKP sanctuaries, Pakistan aims to weaken the Taliban’s grip on power and force them into subservience. The logic is brutal but familiar: use one monster to fight another.

This strategy, however, comes with a catastrophic collateral cost for China. While Pakistan acts as Beijing’s closest ally, the very groups it nurtures to checkmate Kabul are the ones turning their guns on Chinese citizens. It is a perilous gambit where Islamabad attempts to walk a tightrope, utilizing jihadist assets for regional leverage while simultaneously claiming to be a victim of terrorism to secure international funds.

The Tirah Valley Revelation

Nowhere is this duplicitous reality more stark than in the recent, murky events of the Tirah Valley in Pakistan’s Khyber Pakhtunkhwa (KPK) province. This rugged terrain, historically a smuggler’s paradise and militant stronghold, has become the epicenter of a new security failure involving Chinese nationals.

Recent violent incidents in the region resulting in the deaths of Chinese personnel were swiftly framed by Pakistani narratives as the work of Baloch separatists or generic “militants.” The Baloch Liberation Army (BLA) is a convenient scapegoat; they are secular, anti-state, and openly hostile to Chinese investment. Blaming them fits a tidy narrative that absolves the state of religious extremism problems.

However, a forensic look at the Tirah Valley incident suggests a different author. The operational sophistication and the specific targeting methodologies bore the hallmarks of ISKP. Credible intelligence suggests that the Tirah Valley has been functioning as a sanctuary where ISKP operatives regroup, allegedly under the watchful surveillance of the ISI.

The accusation is damning: that elements within the Pakistani state apparatus, in their zeal to maintain ISKP as a thorn in the Taliban’s side, allowed these networks to fester until they lashed out at the Chinese.

The attempt to shift blame to the Baloch separatists serves a dual purpose for Islamabad. It demonizes the Baloch independence movement, justifying harsh military crackdowns in Balochistan, while simultaneously concealing the state’s lingering flirtation with Islamist terror groups like ISKP.

For Beijing, the realization is dawning that the “iron brothers” relationship with Pakistan might be riddled with rust. The Chinese are dying not just because of ideological hatred, but because they are pawns in a fratricidal struggle between regional intelligence agencies and the proxy groups they cultivate.

A Fracture in the Alliance

As China doubles down on its security protocols, importing private security contractors and demanding “thorough investigations,” the silence from Beijing regarding Pakistan’s role is deafening. It is a silence born of necessity; China has no other viable route to the Indian Ocean.

Yet, the blood spilled in the Tirah Valley and the streets of Kabul serves as a grim warning.

The resurgence of ISKP is not an accident of history but a monster fed by the cynical strategies of regional powers. If Pakistan continues to view ISKP as a useful lever against the Taliban, it does so at the peril of its most critical economic partnership.

For China, the lesson is harsh and historically consistent: in the Hindu Kush, the hand that shakes yours in friendship may also be the one feeding the tiger that stalks you.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Milli Chronicle’s point-of-view.