Pakistan’s President Asif Ali Zardari completed his first state trip to Beijing on Oct. 17, signing a raft of new agreements with a nation he had hailed in Islamabad four days earlier as “the future of the world.” China and Pakistan tied up at least 11 deals on trade and economic cooperation, infrastructure projects, agriculture, mining rights and telecommunications; they now aim to double bilateral trade, which currently stands at around $7 billion, by 2011.
The two countries have a long-standing, all-weather relationship, forged over decades of mutual animosity toward neighboring India, with whom they separately have fought wars. But Zardari’s visit comes at a pivotal moment. His fledgling democracy is not only threatened by terrorism, but is also teetering toward bankruptcy. Spiraling inflation, now at 25%, has eaten into Pakistan’s foreign exchange reserves at a rate of $1 billion a month and the country risks defaulting on debt repayment loans. These fiscal headaches have been compounded by a flare-up in tensions with its most vital ally, the U.S., which recently launched raids against terrorist targets in Pakistan’s remote tribal areas without notifying Islamabad — actions that have triggered a firestorm of protest and clouded relations with Washington.