Can China's economic model be compatible with Pakistan's Structure.

Byline: Dr Abdul Wahid

The history of well established, principled and long-standing partnership based on mutual cooperation between China and Pakistan dates back to the earliest years when Pakistan was one of the first major countries to recognize the People's Republic of China. This'time-tested and all-weather' friendship is built on the strong pillars of bilateral cooperation on socio-economic grounds. Continuing the harmonious legacy of trust and collaboration, China has become the largest trade partner of Pakistan after Free Trade Agreement (FTA) signed in 2006 where both countries have agreed to eliminate tariffs on a number of products.

Similarly, China-Pakistan Economic Corridor (CPEC) is a multi-billion-dollar infrastructure- development project consisting of a network of highways, railways, pipelines, special economic zones, power plants and multiple other ventures. A consortium of Chinese investors have purchased up to 40% stake in the Pakistan Stock Exchange (PSX). In spite of these developments, Pakistan has not achieved a substantiate success in translating these endeavors into sustainable partnership programs which might further bring FDI, portfolio investment, transfer of technology and knowledge exchange schemes between the two nations.

Several multilayered challenges are observed at state to state, business to business and people to people levels which have affected the full groom of economic cooperation between the two countries. Regarding the state to state structural crisis, infrastructure gaps are of the preliminary concern for the economic policy makers of Pakistan. The country needs to become more resourceful in terms of transportation, energy, technical and knowledge expertise and communication framework. Bureaucratic hurdles have also contributed to hindering economic cooperation. Additionally, the two states have different legal systems, business cultures and regulatory frameworks which have made it challenging to navigate the business environment in respective countries.

The colonial nature of Pakistan's administrative structure and the western orientations of the majority of bureaucrats (with their dual western nationalities and academic degrees from Western universities) are also among the significant challenging factors. On the other hand, Deng Xiaoping's revolutionary reforms of 1978 completely transformed the nature of Chinese bureaucracy. A famous quote of Deng Xiaoping reflects this transformation as he...