A crack in China-Pak ties

China’s vice-premier Wang Yang, speaking on Pakistan’s 70th Independence Day, said the relationship between China and Pakistan was “as close as lips and teeth”. Ostracised by most of the world, Pakistani leaders picked up the line gleefully. President Mamoon Hussain repeated Wang’s eulogy, adding to the lips-and-teeth metaphor by saying the two countries are linked by rivers and mountains.

What both Wang and Hussain didn’t mention is Mao Zedong, China’s revered (if despotic) leader, had first coined the lips-and-teeth analogy 50 years ago to describe China’s relationship with North Korea. Pakistan has taken North Korea’s place in China’s geopolitical affections. Pakistani lips though, as recent events have demonstrated, can be gnashed by Chinese teeth when the need arises.

It arose last week. At the 37-member Financial Action Task Force (FATF) plenary meeting in Paris, China for the first time broke ranks with its lips-and-teeth ally Pakistan.

The five-day session of the FATF, a global watchdog set up in 1989 to police terror financing and money laundering, placed Pakistan on the greylist for its role in funding terror groups like the Lashkar-e-Taiba (LeT), Jaish-e-Mohammad (JeM), Hizbul Mujahideen and the Taliban. Pakistan had been on the greylist from 2012-15 but only for money laundering. The impact on Pakistan’s economy during the 2012-15 greylisting was peripheral because the main focus of the sanctions was not terror financing.

In 2018, the focus is squarely on terror financing. Pakistan’s brazen support of LeT chief Hafiz Saeed and other terrorists who launch attacks on India and Afghanistan from Pakistani soil have roiled the FATF. On Tuesday, February 20, the second day of the FATF meeting in Paris, the United States tabled a motion to place Pakistan on the greylist. The US proposal was co-sponsored by Britain and backed by France and Germany. The move quickly ran into opposition from China, which blocked it. Turkey and the Gulf Cooperation Council (GCC), acting under Saudi Arabia’s directions (Saudi Arabia is only an associate member of the FATF and does not have a vote), also blocked the US motion.

This infuriated the Americans who were forced to withdraw the motion. India was meanwhile acting quietly with the US and the Europeans though keeping a low profile. On Thursday evening, US and Indian diplomats struck a deal with the Chinese. Beijing would drop its support for Pakistan in return for a larger future role in the FATF as vice-chair. US and Indian diplomats now began to work on the Saudi-backed GCC bloc which by Thursday night too agreed to drop its support for Pakistan. Only Turkey remained firm on blocking the US motion. But one vote is not enough to block a resolution at the FATF. Late on Thursday night, the US motion to place Pakistan on the terror financing greylist was passed in an extraordinary second round of voting.

This irrevocable decision will be formally announced at the June 2018 meeting of the FATF. Over the next three months, Pakistan’s actions against terror groups will be monitored by the FATF and the Asia Pacific Group (APG), the Asian unit of the FATF. Based on their report on Pakistani compliance, one of two options will be exercised: if Pakistani compliance on acting decisively against Hafiz Saeed and other terrorists is found to be satisfactory, Pakistan will be formally greylisted in June. If compliance by Pakistan is not satisfactory, it will be put on the blacklist in June which currently has only two countries (North Korea and Iran). There is no third option. In June, Pakistan will be either on the FATF greylist (if it complies) or on the blacklist (if it doesn’t).

The FATF meeting for the first time revealed cracks in the China-Pakistan relationship. Beijing has belatedly recognised that if it wants to be respected as a globally responsible power, it cannot be seen to perpetually support rogue nations like North Korea and Pakistan. Both countries, however, have geopolitical value for Beijing. North Korea is a buffer state against the proximity of 24,000 US troops currently stationed in South Korea. Pakistan is vital real estate for the Belt and Road Initiative (BRI) that will help China carve an economic pathway to Africa and the Middle-East.

But the Chinese are pragmatists. They worry about Islamist terrorism in their Xinjiang backyard. Their abandonment of Pakistan at the FATF plenary session opens up a sliver of opportunity in India’s own geopolitical calculations in the region. Saudi Arabia’s withdrawal of the GCC’s support to Pakistan at the FATF is also significant. It reflects the incremental success of Prime Minister Narendra Modi’s Middle East outreach.

But neither China nor Saudi Arabia can be taken at face value. Their support for India’s position against Pakistan is transactional. Indian foreign policy mandarins understand this. In a changing world order, the democracies of the US, Europe, Australia, Japan and India have formed a formidable axis. The authoritarian regimes of China, Russia, Saudi Arabia, North Korea and Pakistan remain a potent force. But as events at the FATF meeting in Paris underlined, the decks are increasingly stacked against those who finance, abet or condone terror.

The writer is the author of The New Clash of Civilizations: How The Contest Between America, China, India and Islam Will Shape Our Century.