Together, these agreements mark a qualitative transformation of Chinese economic presence in the subcontinent.

For pessimists in New Delhi, the emerging Chinese economic clout in West Panjab would mean Beijing is outflanking India in its own natural hinterland. For optimists, though, the Chinese success in cracking open Pakistan’s market might create new opportunities for the rest of the world, especially India.

New Delhi, which for years has been so focused on Beijing’s military and nuclear partnership with Islamabad and chafed at its tilt towards Pakistan on Kashmir, will soon have to reckon with the fact that Chinese money might soon rule the roost in its neighbourhood.

That China has an FTA with Pakistan and has emerged as the largest trading partner of Bangladesh last year should remind New Delhi that its failure to expand economic cooperation with its important neighbours is proving to be a blessing in disguise for Beijing.

As its tight-fisted Commerce Ministry refuses to lift the many trade barriers with the neighbours and its cloistered security establishment prevents normalisation of bilateral relations with Pakistan and Bangladesh, India has in effect given China a free economic pass in the region.

While the Indian security establishment pats itself on the back for preventing Chinese investments in its border areas, Beijing’s economic presence all across India’s frontiers — from Pakistan in the West, through Nepal in the North and Bangladesh in the East to Sri Lanka in the South — will soon be a powerful reality.

From its own perspective, Beijing has no reason to limit its economic activity in Pakistan to the local market. It would like to gain access to other markets in the region, including those of India, Iran and Afghanistan.

... contd.