It’s no secret that Pakistan and China have recently strengthened their long-standing relationship. With preparations for the China-Pakistan Economic Corridor well underway, ties between Beijing and Islamabad seem to be stronger than ever. According to a senior economist in Karachi, “As the U.S. looks inward, China is reaching out.”

On November 14, 2017, Pakistan dropped its bid to have the Diamer-Bhasha Dam financed under the China-Pakistan Economic Corridor (CPEC) framework. The current Chairman of Pakistan’s Water & Power Development Authority has claimed that the conditions stated by the Chinese for financing Diamer-Bhasha “were not doable and against our interests.” These conditions included the Chinese ownership of the project, including operation and maintenance, and the securitization of the Diamer-Bhasha project by pledging another operational dam.

The U.S. may be the strongest state militarily, but it needs regional players like China, Iran, Russia and Pakistan to make success of its policy choices on Afghanistan. Operationally it needs to rely on Pakistani ports and road networks to resupply American troops in Afghanistan.

As NATO and the SCO expand simultaneously, the situation will become extremely tricky and complex. Therefore, after finishing membership procedures for India and Pakistan, the SCO should refrain from considering further expansion for a while, as it digests the newly added complexities, and should concentrate on enhancing economic interactions.

On the evening of June 14, 2017, Foreign Minister Wang Yi attended upon invitation the reception of the Shanghai Cooperation Organization (SCO) Day held by SCO

Pakistan’s deep-sea port Gwadar, which the Chinese built and are now operating under a 40-year agreement, is a key part of China’s Belt and Road Initiative. The U.S. and India are looking at the Chinese initiative with skepticism, believing that the twin initiatives are meant more to secure China’s geo-strategic aims.

The CPEC was expected to bring various units of Pakistan together in an integrated economic and communication framework but has instead fanned provincialism and discord. Moreover, senior economists in Pakistan are now increasingly voicing their concern over the terms of financing from China, which is mostly shrouded in mystery.

China now provides half of Pakistan’s military hardware and has demonstrated willingness to transfer technology to Pakistan. As geo-political alignments are changing, the mutuality of interests is drawing China and Pakistan closer.

President Xi Jinping’s latest trip to Iran, Saudi Arabia and Egypt point to the broader Chinese ambitions in the Middle East, a region where political turmoil and Russia’s military intervention in Syria are already altering the delicate balance of power. Only sustained pressure can persuade Beijing that its future lies in cooperation and not confrontation.