Ever since the first high-level contact between Pakistani and Chinese Prime Ministers Mohammad Ali Bogra and Zhou En-Lai at the Bandung Afro-Asian Conference in 1955, the two countries have formed ties that have been consistently friendly. Earlier, China had been extremely suspicious of Pakistan due to the latter's alliance with the US. Its deteriorating ties with the former Soviet Union and India in the late 1950s, however, led it to close cooperation with Pakistan as a countervailing force. Stemming from a perceived power asymmetry vis-a-vis India, Pakistan's (in)security concerns also led it to cooperate with China to narrow the 'strategic deficit' it faced in South Asia.

Political and defence collaboration between the countries have been intense but their relationship lacks a corresponding economic depth. China's annual investment in Pakistan is a dismal US$ 4 billion and bilateral trade languishes at US$ 2.4 billion. Pakistan Prime Minister Shaukat Aziz's visit to China was an attempt to inject a strong economic content to this relationship. Seven agreements were signed in key sectors of trade, communication and energy, and a framework for greater economic cooperation was drawn up. Notable amongst these was recognition by Pakistan of the market economy status of China; signing of a Memorandum of Understanding (MoU) on a protocol on preferential trade agreement under which a joint study would be carried out for establishing a free trade agreement; and MoUs on cooperation in oil and gas exploration and gold and copper production.

In his discussions with political leaders and business entrepreneurs Prime Minister Aziz 'marketed' Pakistan as a state whose military and economic strength was in China's interests of wanting a peaceful South Asian region as well as stability in the Muslim-dominated north western province of Xinjiang. To assist Chinese companies interested in investing in Pakistan, an agreement was signed for the utilization of US$ 500 million preferential buyer's credit to them. Aziz also sought to project Pakistan as a springboard for China to reach other markets in Africa and the Middle East. Promoting Pakistan as an investor-friendly state was a crucial part of Aziz's agenda because his was the first high-level visit of a Pakistan leader to China after the death of a Chinese engineer working on the Gomal Zam dam project near South Waziristan in October 2004. Incidents of targeting and killing foreign and Chinese nationals working in development projects in Pakistan have been highly embarrassing for Pakistan and made the Chinese cautious, leading to suspension of work on the dam. To the relief of the Pakistanis, the Chinese agreed to restart work upon receiving adequate assurances about the safety of the Chinese personnel.

Amongst the numerous projects in Pakistan China is involved in, two 'mega projects' are the construction of the Gwadar port and the Chashma II nuclear power plant. The two sides reviewed the progress on the project and agreed to dredge the port channel to facilitate entry of big vessels. In 2001, The Washington Times had reported that a secret understanding had been reached between China and Pakistan to allow Chinese naval vessels to dock at Gwadar. According to members of the Pakistani delegation, China agreed to install a nuclear reactor at the Chashma II nuclear power plant early next year (Dawn, 19 December 2004). Both sides also exchanged letters for utilization of $150 million preferential buyer's credit for this project. Pakistan President Musharraf had been unsuccessful on this front when he visited China in November 2003. In light of previous alleged clandestine transfer of nuclear technology and know-how from China to Pakistan, this could be a troublesome development.

There are of course strategic drivers to the pronounced economic emphasis of Aziz's visit to China. Even though public statements are to the contrary, the evolving Sino-Indian rapprochement manifest in the regular discussions over the boundary dispute, ballooning bilateral trade and Chinese recognition of Sikkim as a part of India, has perturbed Pakistan enough to compel it to re-energize its ties with China. Aziz, the economist, has recognized the strategic worth of building trade and investment ties, and sought to directly engage the Chinese private sector for the first time.

Both Pakistan and India have realized that extra-regional powers like China, the US and Russia seek to free themselves from the straitjacket that the Cold War had confined them to of choosing one regional ally over another. They now seek to simultaneously engage Pakistan and India while still having their 'favourites'. Aziz's visit to China must be understood as a part of Pakistan's response to this, by reminding China of historically close ties the two have shared, broadening the basis of engagement which have primarily been defence-dominated, and even suggesting that joint collaboration on developmental efforts will contribute to the stability of Xinjiang. Premier Wen Jiabao's reassurance to Aziz that improvement in relations between India and China (especially in the economic sector) would never be at the expense of Sino-Pak relations was exactly what Pakistani PM must have wanted to take back home.