Strategic Equilibrium in US-China Rivalry | OP-ED | Security Lense | 30-April-2025
The United States (US) and China have increasingly engaged in strategic rivalry, a fact that has put Pakistan in a very precarious geopolitical situation and forced it to meet a very tricky balancing act between two global powers that have conflicting interests. In the past, Pakistan has had a security-dominant relationship with the US and, at the same time, has grown economically and strategically close to China, especially in the China-Pakistan Economic Corridor (CPEC).
Islamabad, however, is being pushed by the growing US- China rivalry, which is characterized by trade wars, technological decoupling and military posturing in the Indo-Pacific, to take sides between the two rival blocs. The strategic balance that Pakistan seeks is not just a diplomatic choice but it is imperative to the sovereignty, economic wellbeing and regional security of Pakistan.
On one hand, being too much on the Chinese side may lead to loss of Western financial systems and further increase dependency on debt, on the other hand, too much pro-US will jeopardize essential investments in infrastructures and bring the wrath of Beijing.
In this way, Pakistan should pursue a balanced foreign policy that would take the most out of both relationships and would reduce the amount of risks in order not to become a collateral casualty of a new Cold War.
The relationships with the US and China have long influenced the geopolitical path of Pakistan, at least in two different ways. As the Cold War played out, Pakistan became a frontline state allied to the US to fight Soviet expansionism and in exchange was given hefty military and economic assistance in lieu of its strategic cooperation.
Nevertheless, the association has been transactional and uneven, with Washington often levying sanctions or scaling back aid according to temporary interests- like following the nuclear tests in Pakistan in 1998 or the US pullout of Afghanistan in 2021.
Conversely, China has proved a more stable ally, with unconditional diplomatic support, arms sales and, more recently, with enormous infrastructure projects under CPEC.
The friendship between China and Pakistan is based on their mutual strategic interests: Pakistan wants to develop economically and have an alternative to India, and China can have access to the Arabian Sea through the Gwadar Port and presence in South Asia to counter the influence of the US. The historical duality explains why Pakistan cannot afford to lose either of these relationships completely and as the US-China tensions increase.
The China-Pakistan Economic Corridor, a showcase project of Beijing-led Belt and Road Initiative (BRI), has been turned into a pillar of Pakistan economic planning, with promises of more than 60 billion dollars in investment in energy, transport, and infrastructure.
To Pakistan, CPEC will provide a lifeline as it faces chronic energy shortages, low development of transport networks, and slow rates of GDP growth. Nonetheless, the high dependency on Chinese financing has brought into question debt sustainability and Pakistan has an external debt of more than 30 billion dollars to China. Critics say that such opaque loan terms and profit repatriation clauses may result in a debt trap, as experienced in the case of Sri Lanka and the Hambantota Port.
Conversely, Pakistan continues to rely on the western financial institutions such as the international monetary fund (IMF) and the world bank to come to its rescue in terms of balance-of-payments. The US being one of the key stakeholders in IMF, have considerable control over the terms of bailout and usually exert pressure on Pakistan to wean off Chinese involvement.
Finding a balance is therefore important- Pakistan needs to use Chinese infrastructure funding but should not be too dependent on Chinese funding to ensure that it does not become over dependent on either state.
Besides the economic aspect, Pakistan has strategic issues in military and diplomatic relations with the US and China. The US is also a major provider of sophisticated military equipment especially in counterterrorist activities and has in the past offered essential assistance including the Coalition Support Funds in the war in Afghanistan.
The increasing strategic convergence between Washington and India, however, which includes the US-India nuclear deal and the Quadrilateral Security Dialogue (Quad) has undermined confidence in Islamabad. In the meantime, China has become the most important defense supplier to Pakistan, providing fighter aircraft, naval ships and missile technology, and preventing it with UN sanctions.
The danger facing Pakistan is that it may overcommit to the Chinese orbit, leading to US sanctions under such legislation as the Countering America Adversaries Through Sanctions Act (CAATSA). Further, with the US increasing its Indo-Pacific policy, to counter Chinese expansion, Pakistan may come under increased pressure to explain its contribution to the Chinese naval expansion.
Islamabad is therefore left with the delicate task of hedging its bets carefully- to maintain a counterterrorism relationship with the US and strengthen defense relations with China without being perceived as a proxy of either.
Pakistan faces a further diplomatic challenge in that the new global order is evolving and non-alignment is becoming hard to achieve. The US has been urging allies to cut connections with Chinese companies such as Huawei in 5G networks and limit BRI involvement, and China is responding through economic coercion as is the case with trade conflicts against Australia and Lithuania.
Pakistan however cannot afford to offend either power. It has been cautious, as it recently abstained on US-led efforts to criticize China over its human rights record in Xinjiang and Hong Kong. Simultaneously, Pakistan is interested in continuing working relations with the US on Afghanistan, climate change, and non-proliferation.
Multilateral organizations such as the Organization of Islamic Cooperation (OIC) and the Shanghai Cooperation Organization (SCO) provide avenues to Pakistan to diversify its alliances and not to over-depend on one bloc. However, Islamabad should be very careful and its diplomatic statements and voting in the UN should not isolate key partners.
Pakistan should pursue a pragmatic neutrality policy and derive maximum benefits in the US-China rivalry by reducing the exposure to vulnerabilities. Economically, it would be wise to renegotiate CPEC terms to make them transparent, debt sustainable, and local employment generating to minimize the allegation of neo-colonialism.
At the same time, it has to deal with IMF and western investors to diversify the sources of funds to avoid overexposure to Chinese loans. Pakistan ought to be strategically non-committal to direct military alliances that would provoke one or the other power, shifting its efforts to self-generated defense manufacture and associations with countries that are neutral, such as Turkey and Saudi Arabia.
Geopolitically, Islamabad needs to take advantage of its status as a mediator in Afghanistan and as a link between the Islamic world and China to increase geopolitical relevance. Finally, the most important factor that determines the survival of Pakistan in the US-China rivalry is its capability to sustain strategic ambiguity, i.e., it cooperates when there is an intersection of interests and pushes back to be forced to choose a side.
In the context of US-China rivalry, Pakistan is struggling to find its balance, which is critical to its sovereignty and stability. On the one hand, China can be seen as a source of invaluable economic and military assistance, whereas the US can be viewed as a source of important financial lifelines and cooperation in the aim of countering terrorism.
It would be bad to drop either of these relationships, but the over-commitment to one might provoke reprisal by the other. The best option available to Pakistan is calibrated engagement, which will make it an esteemed-but not subordinate- partner to both giants.
During an age of great power rivalry, strategic independence and multifaceted alliances will provide Pakistan its greatest protection as it cannot afford to be a chess piece in a geopolitical game that is far bigger than Pakistan.
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