Trump tweet draws China, Pakistan closer

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By Yang Sheng and Wang Cong Source:Global Times Published: 2018/1/4 21:28:39

Yuan used in bilateral trade, military base talks reemerge

A Twitter attack by US President Donald Trump against Pakistan on New Year’s Day appears to be helping boost the already close ties between Pakistan and China as days after the tirade two important advances in financing and military cooperation between the latter two countries were reported.

Trump’s tweet, which accused Pakistan of giving safe haven to terrorists, drew a stern backlash in Islamabad and staunch defense of Pakistan in Beijing – a dynamic that experts say highlights the further strengthening of the relationship, as the US, in its broader geopolitical strategy, aims for closer ties with India, while casting aspersions on Pakistan.

On Tuesday, a day after Trump’s Twitter attack, the State Bank of Pakistan announced that it has taken measures to ensure the use of the yuan in bilateral trade and financing transactions and that public and private sectors are free to choose the Chinese currency for bilateral trade and investment activities.

While the content of the statement was not a dramatic policy change, as the yuan is already accepted by many Pakistani companies, the timing made the move significant, Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, told the Global Times.

“This is more of a political statement in response to pressure from the US, telling the US that Pakistan has a great relationship with China and that Pakistan would become even closer with China,” Dong said.

The statement also drew a positive response from China’s foreign ministry.

“We encourage market entities from both countries to use our own currencies in clearing bilateral trade and investment, we welcome the measures from the Pakistani side,” Chinese foreign ministry spokesperson Geng Shuang said at Thursday’s press conference.

Second overseas military base

Military cooperation between China and Pakistan could also improve in response to the US’ strategic shift towards India, which is on bad terms with both Pakistan and China.

The US newspaper Washington Times reported on Wednesday that China is in talks with Pakistan to build its second overseas military base as part of a push for greater maritime capabilities along strategic sea routes.

The facility could be built at Jiwani, a port close to the Iranian border on the Gulf of Oman, and located a short distance up the coast from the Chinese-built commercial port facility at Gwadar, Washington Times reported, quoting two people familiar with the deal.

“Both Beijing and Islamabad have the ability to build a joint naval and air facility in Pakistan, but it is unnecessary at this time,” as it is a backup plan for the Indo-Pacific strategy of the US and its allies, Lin Minwang, a professor at Fudan University’s Center for South Asian Studies, told the Global Times.

Lin believes if the US and its allies push their Indo-Pacific strategy to the extreme, China will surely carry out a plan with Pakistan to ensure the security of sea routes.

China’s first overseas military base is in Djibouti.