The economy is passing through a most difficult phase in recent history. It is not just high inflation or rising twin deficits, one set of bad news is feeding into the next and the crisis has assumed serious proportions.

What started with inflation, currently high at 25 per cent, turned out to be a far deeper problem, spreading from the consumer to capital to property to currency markets.

The negative evaluation of the international credit rating agencies has compromised the country’s capability to raise funds at serviceable rates from international market or attract investors for its privatisation programme. The depleting foreign exchange reserves have raised fears of default if immediate external support is not available to shore up the reserves (that have shrunk from the peak $16.5 to $9.3 billion) to a comfortable level.

The corporates are said to be doing well so far but the worsening macro economic indicators, threatening a major slowdown, would affect their profitability. Some analysts see the economic growth falling to a six-year low this year.

People are hard pressed but have demonstrated restraint, probably in the hope of more responsible governance by the elected government.

“Pakistan needs a ‘substantial’ injection of external funds if it is to improve its worsening economic situation” the IMF said recently.

In these difficult times, China, the economic powerhouse of Asia, can help energise the faltering economy, by stepping up investments particularly in the energy sector and by providing easier market access to Pakistani goods. China has recently demonstrated once again its deep concern for Pakistan at Vienna Nuclear Supplier Group meeting by advocating for energy deficient Pakistan same waiver as being offered by the US to India.

However, the degree of utilisation of the goodwill shown by China to emerge from the quicksand of economic crisis would depend on the capability of the government. The proposed visit of President Zardari to China would provide the government a window of opportunity to explore possibilities of Chinese support to ward off immediate challenges.

Some reports have appeared in local and foreign press speculating on the probable agenda of the intended high level meeting. There is a lot of anxiety in India. For the last one week the Indian press has been trying to guess possible dimensions of Sino- Pakistan co-operation and its possible consequences on India’s position in the region.

There is no visible excitement here for the China trip. No preparations seem to be afoot.

For the China cell in the ministry of finance, life is more dull than usual. The head of the cell is away and his deputy told Dawn from Islamabad that he was not aware of any activity taking place in this regard. “We do not know who will accompany the President on his visit to China. The ministry has not been informed about the trip nor it has received any request that I know of to put together any brief for the economic parleys”, a senior official told Dawn from Islamabad.

Farhatullah Babar , spokesman of the ruling Peoples Party revealed that the trip has not yet been officially announced. On the issue of preparation for Zardari visit, he found concerns misplaced. “All relevant departments and ministries will be taken on board after the government finalises the programme. The preparations need not start afresh. The concerned ministries have briefs ready that they can produce on demand on a short notice”.

The trade officials at the Chinese Consulate in Karachi declined to make any comment on the prospects of the high level meeting between Chinese and Pakistani leaders. “We are not authorised to offer any public comments on such sensitive issues”, a deputy consular responded when reached over telephone in Karachi.

“China has been a valued economic partner that assisted Pakistan in its development efforts. The major projects completed with Chinese assistance include Karakorum Highway, the Heavy Mechanical Complex, the forge and foundry project, the Gaddu-4 thermal power station, the Jamshoro-2 thermal power station, the Heavy Electrical Complex, Gwadar seaport, etc. Still in my view the full potential of the economic relationship has yet to be realised”, said a senior analyst requesting anonymity.

“Besides historical bonds, it is, perhaps the convergence of interests of the two states that draws them towards each other”, said another leader.

“We have been drawing the government’s attention for quite sometime through a series of letters that there is huge scope for Pakistan in China and that it needs to warm up its relations with the Asian giant that has a special soft spot for Pakistan but the government has been more inclined towards the West and ignored many suggestions that we forwarded”, said a high ranking foreign ministry official in a informal chat.

The foreign minister was approached but was not able to spare himself to offer a formal comment on the China visit.

The discussion is on who will be going where and not on why the trip has to be made or clear targets that the government hopes to achieve”, said an insider.

“You must sift facts from fiction. The government is alive on all issues confronting the country. We are in touch with China over our economic difficulties. The fact is that it has been quietly helping the Pakistan Peoples Party government that hopes to give new meaning to friendship during its current tenure”.