A number of Chinese companies are rethinking their investments in Pakistan amid rising political instability and growing fears over the security of Chinese personnel, according to mining firms working in the country.
An official working for the China Metallurgical Group Corporation, speaking on condition of anonymity, said the deteriorating security situation in Pakistan in recent months and renewed political instability, heightened by the on-going tension between the military and civilian leadership, had prompted companies to review future investment plans and seek assurances from the Chinese government that the safety of personnel would be assured.
“Security has been very inadequate, even though companies have faced kidnapping threats and are afraid about their safety,” said the official, who works for the Engineering and Research Institute for Nonferrous Metallurgical Industries (ENFI), a subsidiary of the China Metallurgical Group, which recently sent an exploratory team to the country and is already invested long-term in many projects in Pakistan.
“At one point, we were so concerned about the lack of security that we were forced to start paying the military to give us some protection,” the official claimed.
Last year, the Kingho Group, one of China's biggest private coal mining firms, pulled out of a $19-billion deal — the biggest investment by a Chinese company in the country — in the Sindh province citing security concerns.
In recent months, a number of Pakistani officials have visited Beijing, courting investment and looking to assure Chinese companies that their security would be guaranteed, fearing further withdrawals after the Kingho deal stalled.
The visits have come after a number of reports — some unconfirmed — detailed either threats or attempts to kidnap or attack Chinese workers employed in projects in the country.
In November, Pakistani media reported that militants in Balochistan had attacked a group of Chinese engineers who were being escorted by security forces. Initial reports said the attack left five security personnel killed, although local officials subsequently denied that the attack took place.
In a faxed statement to The Hindu, the Chinese Foreign Ministry said reports about the attack were untrue. The ENFI official, however, said threats issued by militant groups to kidnap Chinese personnel were not uncommon.
The Foreign Ministry did not reply to questions about whether Chinese companies had expressed safety fears and what steps the Chinese government was taking to ensure their safety.
A Chinese scholar who studies Pakistan and advises the government on its policy said in a recent interview, speaking on condition of anonymity, that the Chinese government's influence on companies “only goes so far” and they could not be pressured to continue investing.
“Ultimately, whether or not a company decides to continue investing in Pakistan depends on whether the environment is suitable for business and profits can be made,” the scholar said. “The government can't force companies to continue operating, no matter what the political relationship is.”
Concerns in media
Recent reports in the Chinese official media have also, unusually, detailed concerns of Chinese workers in Pakistan, in a break from the overwhelmingly positive media coverage accorded to the “all-weather” neighbours' relationship.
One report described the security fears of the more than 80 Chinese workers in the Karachi shipyard, who were working on four frigates China is building for Pakistan, in the wake of an attack on a naval base in May last year.
Wang Dejie, assistant president of the China Shipping Trading company, was quoted as saying “the gravity of the security issue can not be underestimated”, although terrorist organisations were, generally, “not targeting the Chinese”.
“For security concerns, all the Chinese workers in Karachi Shipyard are not allowed to go outside,” he said. “The Shipyard organises a day out each month. If the security situation is too severe, the shipyard will rent a boat to a nearby island so they can relax.”
He said two workers had been trapped near the United States Consulate in Karachi “as armed militants roamed the streets”. Following the attack, security was boosted for Chinese workers in the shipyard, with secured accommodation and a security zone being constructed, Pakistani officials were quoted as saying.
In June, Pakistani Prime Minister Yusuf Raza Gilani sought to assuage Chinese fears following the attack, telling a visiting delegation of Chinese companies in Islamabad that arrangements would be made for their safety. Pakistan would assist Chinese companies “by providing all possible incentives and security measures”, he said.
While Chinese officials have, in recent months, publicly voiced strong backing to their all-weather ally and promised to bolster support in the wake of strains between Islamabad and Washington, they have privately expressed increasing concern over instability.
In November, Chinese officials told visiting Pakistani politician Imran Khan, who heads the Pakistan Tehreek-e-insaf (PTI) party, that they were worried about the future of their investments in the country.
“[The Chinese officials] did mention that if there instability, how can you have investment?” Mr . Khan said. “Pakistan is going through one of its most unstable periods. This is not a time when people want to invest in the country.”