October 15, 2008 / 12:24 PM / 10 years ago

Pakistan's Zardari looks to China for support

BEIJING (Reuters) - Pakistani President Asif Ali Zardari reached trade deals with China on Wednesday, raising hopes that Beijing would help his country through difficult economic and diplomatic times.

Chinese President Hu Jintao (R) smiles with his Pakistani counterpart Asif Ali Zardari in front of their respective country's flags during a signing ceremony at the Great Hall of the People in Beijing October 15, 2008. Zardari arrived on Tuesday for his first visit to China as president, and has said he wants his four-day trip "to remind the leadership of the world how close our relationship is". Pakistan is set to usher in a series of agreements with China during the trip, highlighting Islamabad's hopes that Beijing will help it through economic and diplomatic troubles. REUTERS/David Gray

Chinese President Hu Jintao and Zardari oversaw the signing of 11 agreements on trade and economic cooperation, agriculture, mining and other areas, but it was unclear whether they included any concessional loans or nuclear cooperation deals.

The Financial Times reported that the Pakistani president was seeking $500 million or more in soft loans from its neighbor as it grapples to stem a looming balance of payments crisis.

Zardari is wooing Beijing at a time when his country’s relations with the United States are strained after U.S. forces in Afghanistan carried out cross-border air raids and at least one ground assault on al Qaeda and Taliban targets in Pakistan.

Washington also recently sealed a civilian nuclear deal with India that riled Pakistan. Both New Delhi and Islamabad have developed nuclear weapons to counter each other, but Washington has ruled out a similar deal for Islamabad.

Zardari, on his first visit to China as president, made clear commercial ties with Chinese companies were foremost on the Pakistani delegation’s agenda, according to Xinhua news agency.

“I chose China as my first country to visit to say to Chinese companies that I will provide favorable treatment to you,” Xinhua quoted Zardari as saying.

Hu told the Pakistani leader that his country “attaches high importance to the China-Pakistan relationship and has always made the development of the relationship as one of China’s diplomatic priorities,” state television reported.

In the official Liberation Daily, a Chinese analyst suggested recent discord was forcing Zardari to look elsewhere for more help.

“Although the United States has repeatedly declared it remains as supportive as ever of President Zardari and the Pakistan government, up to now there has not been action on these vows,” wrote analyst Wu Yongnian.

TRADE TIES DIP

China’s trade ties with Pakistan have flagged.

In the first eight months of this year, trade between the two grew to $4 billion, a rise of 6.3 percent on the same time last year, according to Chinese statistics. China’s imports from Pakistan shrunk by 11.6 percent in the first eight months.

By contrast, China’s trade with India grew by 59.1 percent.

The 11 signed agreements included a framework agreement for mineral cooperation and a satellite purchase contract, but there was no mention of concessional loans.

Pakistan said in April China had agreed to provide $500 million in concessional loans to help the country meet its balance of payments needs. Those loans have since been disbursed.

A Chinese expert on relations with South Asia said his country wanted to reassure Islamabad that it would remain close under the new Pakistani president.

“Especially with the India-U.S. nuclear agreement, Pakistan feels troubled and neglected by Washington and Zardari would want to remind the world that he expects equal treatment,” said Zhang Li, the expert from Sichuan University in southwest China.

“The Pakistani economy is extremely troubled, and China may feel compelled to show that it won’t just stand aside. A loan seems likely, but China will also expect concessions in return.”

But Beijing does not want to become embroiled in fresh rivalry between India and Pakistan and any agreement on civilian nuclear cooperation would be a “gesture of goodwill,” rather than a substantive agreement, Zhang said.

“Any agreement would be more about showing unity. I don’t expect anything substantive in such tense times,” he said.

Additional reporting by Ian Ransom; Editing by Jeremy Laurence

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