My latest story is up, on Chinese investment in Balochistan, a Pakistani province that borders Afghanistan, Iran and the Persian Gulf. As others have reported, China is building up investments in Central and South Asia in a strategy it calls the “string of pearls,” in a way that contains/constrains India. My piece looks at how China goes about staking its claim and what the strategy, as applied in Pakistan, means for the United States.
“Beijing is willing to play hardball to protect its position in Balochistan. That’s a lesson learned the hard way for Tethyan Copper, a joint venture between Canada’s Barrick Gold ( ABX– news – people ) and Chile’s Antofagasta. In 2006 Tethyan signed a deal to survey, and then develop, the Reko Diq reserve in Balochistan, estimated to hold $70 billion in copper and gold…
In January the Baloch government, struggling politically and looking to appease separatist hardliners, announced it would cancel Tethyan’s license and force investors to absorb a $3 billion loss. Almost immediately the U.S. intervened, putting pressure on the Pakistani central government to dissuade Quetta from doing this. U.S. diplomats believe the sanctity of the Tethyan deal is essential to its efforts to encourage Western investment in Pakistan as a counterterror tool.
For China, however, American intervention was an alarm bell…”
To find out what happened next, read the rest (and comment!) here