China's trajectory towards a Middle Power is indicated by the recently concluded visit of President Hu Jin Tao to four nations which are of consequence towards this quest. These countries were Vietnam, Laos, India and Pakistan. Five substantial joint statements were issued and 54 agreements were concluded during this period as per Chinese Foreign Minister, Mr. Li Zhaoxing . The itinerary of the President followed the logic of geography but was also carefully calibrated to convey the subtlety of power balance that China seeks to maintain with these four states. Vietnam and India are the only two states with which China has not settled its long standing boundary disputes and have the potential to challenge the Chinese pursuit for dominance in Asia and also have a location advantage in impinging on China's great power ambitions situated astride the all important Sea Lines of Communications (SLOCs) through which much of China's gigantic oil supplies pass each day. Vietnam also has the organizational, political and national confidence to challenge China's supremacy in the South East Asian region particularly the Eastern seas in which China has considerable interests. Laos and Pakistan have been China's partners for many years. Pakistan and Laos are ideal foils against India and Vietnam respectively.
The Chinese however seem to have taken a fresh view of their strategy and are embarking on a cooperative engagement strategy with India and Vietnam. Thus the reported rebuff to the Chinese Ambassador in New Delhi for stepping out of line just before the visit of the President, stating that Arunachal was a claim area, though he had been only stating the obvious. The visits to Pakistan and Laos were in the nature of balancing power in the region, to ensure that regional prodigies, India and Vietnam do not step out of line or just in case they do, are checkmated. This is the realist view of Chinese foreign policy which is still stuck in the static, balance of power rut and in the long run may cause it more harm than good.
The overt theme of Hu's visit was however economic cooperation, whether it was the APEC summit or meetings with APEC leaders by the President, he consistently stressed on the need for a bilateral trading system between nations and adopting the Bogor goals set by APEC. A free trade area in the Asia Pacific region by 2010 for developed and 2020 for developing economies was envisaged at Bogor. The focus during the visit to other nations was also on bilateral economic and trade cooperation. Thus with Vietnam it signed a number of cooperation agreements applicable over the next 5 to 10 years as well as take forward the process of ASEAN free trade zone. With Laos the theme was again bilateral trade and cooperation to include investment, communications, transportation, infra structure, energy and mining.
The areas of interest with India were information and communication technology, energy, infra structure, science and technology and agriculture. The trade target has been placed at $ 40 billion by 2010. The relationship with Pakistan was the most significant where a free trade agreement was signed to triple the bilateral trade from the current $ 4 billion to $ 15 billion in the next five years. Thus the volume of Sino Pakistan trade will be larger than that of Pakistan and India despite a much better transportation network. A significant feature of the agreement with Pakistan is the inclusion of transportation and finance, a feature which is not included in agreements with India and Vietnam, though China shares a common border with them. This will provide a focus to the much touted widening of the Karakoram highway.
China is also greatly enhancing its engagement of Pakistan by providing it bilateral military and nuclear assistance. The development of the Gwadar Pasni complex and assistance in construction of new nuclear reactors is an important indication of the degree of Chinese involvement in Pakistan. The intent obviously is to ensure a counter vail to India, which China appears to be now viewing as an economic competitor in the long term. The vulnerability of the oil economy is also compelling, the interest in Gwadar thus needs to be seen in this light.