By Louay Ghabra

It is a delicate balancing act of Pakistan's foreign and economic policy, which aims to strengthen both regional and global partnerships without being strictly tied to a specific bloc. The country's strategic vision is focused on driving economic projects while maintaining close ties with China, the largest economic partner, while forging new alliances with other regional and global powers. This balancing act allows Pakistan to maintain its sovereignty, economic interests and security even in the face of rapid geopolitical developments.

Foreign debt to China

Despite its foreign debt to China of almost 69 billion US dollars, Pakistan's financial obligations are primarily linked to long-term infrastructure investments, particularly in transport networks such as the Karachi-Lahore highway and the port of Gwadar, both of which are crucial for connecting the Pakistani economy to world markets. In the energy sector, Chinese investments have developed projects such as the Thar coal-fired power plant, which ensures Pakistan's energy security through the use of local coal reserves. Industrial growth was also promoted by initiatives such as Allama Iqbal Industrial City in Faisalabad. It is helping to expand the textile industry — one of Pakistan's most important export sectors.

The second phase of the China-Pakistan Economic Corridor (CPEC) builds on this basis and shifts the focus away from Infrastructure development based on strong economic initiatives. Industrial cooperation includes projects such as the Karachi Special Economic Zone and the Gwadar Free Trade Zone. These projects are intended to boost production and increase exports. Modernizing agriculture through joint ventures in cotton and wheat production will also be an important aspect of this strategy. In this phase of CPEC, the focus is also on socio-economic development in the areas of education, health and qualification, which contributes to improvement, particularly in traditionally underdeveloped regions.

Security measures reinforced

In order to secure these foreign investments, particularly from China, Pakistan has stepped up its security measures. 12,000 employees were deployed to protect workers and infrastructure projects — to protect against militant attacks or political instability.

Intelligence sharing and counterterrorism cooperation with China have also been stepped up to protect both economic and strategic interests. This security framework is crucial for the long-term success of CPEC and other foreign investments and strengthens Pakistan's ultimate goal of establishing itself as a stable and reliable partner in international trade.

Diplomatic frictions

Diplomatic challenges are part of every international partnership, and relations between Pakistan and China are no exception. The need to maintain strong ties with Beijing while working with other world powers is, of course, creating diplomatic friction. Pakistan's closer ties with China, for example, have sparked concern in Washington, especially as the US increasingly sees India as a strategic counterweight to China in the Indo-Pacific region. This led to tensions as the West fears that Pakistan's close relationship with China could weaken its involvement in Western countries. Despite these fears, it remains clear that Pakistan is striving for strong ties with both China and the United States. In doing so, Pakistan wants to expand its strategic balance.

Statements by US President Donald Trump about the Bagram airbase in Afghanistan add another dimension to Pakistan's geopolitical significance. Trump emphasized the strategic importance of Bagram, regretted the US withdrawal and hinted that China could now exert influence on the base. He explained: “I would have kept Bagram because it is right next to China.” Trump's comments underscore the wider geopolitical competition in the region.

Against this background, the CPEC is strengthening the country's geostrategic importance by offering China a secure economic corridor and facilitating access to world powers, thus reducing dependence on vulnerable transit routes, such as those through Afghanistan. This makes Pakistan an important partner for global trade and security, which is likely to counteract the West's skepticism about CPEC.

Pragmatic foreign policy as an asset

By balancing its alliances in the region, Pakistan wants to contribute to maintaining peace and stability in South Asia. The country's diplomatic strategy is a diversified foreign policy so as not to become too dependent on a single power.

This pragmatic approach Islamabad between major powers and regional dynamics is the key to a sustainable future. Pakistan's strategic importance in South Asia cannot be overemphasised. Its ability to work with a variety of international players strengthens its role as a regional leader and even serves as a model for other nations facing similar strategic challenges. Pakistan's pragmatic foreign policy is its strongest asset.

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