plawolf
Lieutenant General
China is looking to build Pakistan into a regional economic powerhouse.
It is using the formula that has worked so well for itself - massive investment in infrastructure. To build the common goods stock that would allow private and public enterprise to flurish and delivery economic growth.
This is only the first step.
Follow on steps would be to invest massively in education in Pakistan (a huge, young, unskilled population is a burden, not a boom); and migration of Chinese light manufacturing to Pakistan, both to provide the mass employment needed to underpin long term sustained growth, but also to allow Chinese companies to benefit from the lower labour costs in Pakistan as Chinese wages continue to rise.
Those jobs are already starting to leave China for lower wage economies like Vietnam and the Philippines. So China looses little by directing those jobs it cannot hope to hold to Pakistan, a longstanding ally, rather than see them go to rivals Vietnam and the Philippines.
As Pakistan's economy takes off, it will in turn create a new market and opportunities for Chinese companies and products as they continue to climb the value chain.
That's where Chinese strategic thinking differs the most from classic western thinking. Rather than look for opportunities, the Chinese prefer to create them instead.
And while the likes of Trump would happily shrink the size of the pie if he can grab a bigger share of what's left, China prefer to grow the pie so everyone gets a bigger share.
It is using the formula that has worked so well for itself - massive investment in infrastructure. To build the common goods stock that would allow private and public enterprise to flurish and delivery economic growth.
This is only the first step.
Follow on steps would be to invest massively in education in Pakistan (a huge, young, unskilled population is a burden, not a boom); and migration of Chinese light manufacturing to Pakistan, both to provide the mass employment needed to underpin long term sustained growth, but also to allow Chinese companies to benefit from the lower labour costs in Pakistan as Chinese wages continue to rise.
Those jobs are already starting to leave China for lower wage economies like Vietnam and the Philippines. So China looses little by directing those jobs it cannot hope to hold to Pakistan, a longstanding ally, rather than see them go to rivals Vietnam and the Philippines.
As Pakistan's economy takes off, it will in turn create a new market and opportunities for Chinese companies and products as they continue to climb the value chain.
That's where Chinese strategic thinking differs the most from classic western thinking. Rather than look for opportunities, the Chinese prefer to create them instead.
And while the likes of Trump would happily shrink the size of the pie if he can grab a bigger share of what's left, China prefer to grow the pie so everyone gets a bigger share.
