Economic diplomacy: deciphering the case of Sino-Pakistani economic relations

This thesis engages with the debates about diplomatic agency in the realist conception of diplomacy and strategic interests as factors shaping contemporary economic diplomacy by focusing on the case of Sino-Pakistani economic cooperation. This research has examined the previously unexplored areas of the relevance of the military actors to the management of economic relations between states and economic cooperation for shared strategic goals based on the location of a state’s territory. The research analyses the decision-making and negotiations processes in the cases of the China-Pakistan Free Trade Agreement (FTA), the China-Pakistan Economic Corridor (CPEC), and Gwadar port development. Enquiries look into the roles of the actors in Pakistan’s economic diplomacy at the leadership, executive, and consultative levels of decision-making. Secondly, it examines the economic, political and strategic interests of the stakeholders and identifies the objectives of Sino-Pakistani economic diplomacy. Findings of the enquiries in this thesis have demonstrated that the range of actors in Pakistan’s economic diplomacy extends beyond economic ministries and includes the military leadership as extraordinary actors. Moreover, the military actors are primarily concerned with international economic cooperation of strategic nature. This research has added the military actors to the range of actors involved in the conduct of strategic economic relations and revealed that Pakistan’s political hybridity extends to its economic diplomacy. It has thus filled a gap in earlier literature and expanded the debate about agency in diplomacy. Whereas Pakistan pursues a vision of functioning as a pivot in the region by linking the neighbouring landlocked markets to the Indian Ocean through its ports, China’s quest for safer alternatives to the Malacca Straight trade route and its goal of developing its western region have found the answers in Gwadar port. Pakistan and China have enacted the complementarities of their respective development and trade agendas by synchronising their development strategies and forging a mechanism of joint management of development projects. This synchronisation of strategies lies at the core of the strategic nature of Sino-Pakistani economic relations. The CPEC investment in energy, infrastructure, and socio-economic development is contributing to Pakistan’s achievement of its Sustainable Development Goals (SDGs). This thesis argues that shared geostrategic goals of cooperating states take precedence over their market interests and serve as levers of economic negotiations. Strategic location of a state’s territory bestows upon it advantages over other states affected by it and defines their interdependence. Conversion of the location advantages of a state into economic benefits thus becomes a key concern of contemporary economic diplomacy