China Extends Support to Pak! Amidst Raging US-China Trade War, Who Gains The Most After Destabilising India, Pakistan or China?

China has recently extended its financial support to Pakistan by agreeing to expand their currency swap line by an additional 10 billion yuan (approximately $1.4 billion). This move aims to bolster Pakistan's foreign reserves and stabilize its economy, which has been under significant strain. Additionally, Pakistan is preparing to issue its first Panda bond—Chinese yuan-denominated debt sold in China—with backing from the Asian Infrastructure Investment Bank and the Asian Development Bank .

Implications for India Amid U.S.-China Trade Tensions

The U.S.-China trade war has led to significant shifts in global trade dynamics. With the U.S. imposing steep tariffs on Chinese goods, China has sought to mitigate the impact by strengthening alliances, notably with Pakistan. This alliance poses strategic challenges for India, as it navigates its own economic and security concerns.

India, while benefiting from some trade diversions due to the U.S.-China tensions, faces the risk of being encircled by a China-Pakistan axis that could leverage economic and military collaborations to counterbalance India's influence in the region .

Strategic Calculations: Who Gains the Most?

In the short term, Pakistan benefits from China's financial and diplomatic support, which provides a buffer against economic instability and international isolation. China, on the other hand, gains a strategic foothold in South Asia, potentially offsetting U.S. influence and countering India's regional dominance.

However, these gains come with risks. A destabilized India could lead to broader regional instability, which might adversely affect China's economic interests and global image. Therefore, while both China and Pakistan might achieve certain strategic objectives, the long-term implications of a destabilized South Asia could be detrimental to all parties involved.

China's increased support for Pakistan amid the U.S.-China trade war highlights the complex interplay of economic and strategic interests in South Asia. While there are immediate benefits for both China and Pakistan, the potential for regional instability poses significant risks. India, facing these challenges, may need to recalibrate its foreign policy and economic strategies to safeguard its interests in an increasingly multipolar world.