South Asia Investor Review

The summit meeting of the leaders of China and the United States in Washington appears to signal a rapprochement between the two superpowers.  President Trump has repeatedly referred to what he calls "G2", without mentioning "G7" or "G20", the groups that include many more countries. This development is seen as positive for world peace but it diminishes India's significance as a "counterweight to China" and the benefits Indians expected to flow from the US-China confrontation in Asia.  President Trump Personally Welcomed President Xi at Andrews Air Force Base The fact that President Trump personally received President Xi at Andrews Air Force Base upon his arrival is yet another indication that the US now recognizes China as a peer competitor. President Xi, for his part, has talked about the need for the two superpowers to avoid the "Thucydides Trap", a reference to the potential for war between an established superpower and a rising...

Pakistani auto industry, currently dominated by Japanese automakers building ICE (Internal Combustion Engine) vehicles, is expected to be transformed with the arrival of Chinese new energy vehicles (NEV) manufacturers. Beyond Your Dreams (BYD), Chang'an, Great Wall Motors (GWM) and Shanghai Automotive Industry Corporation (SAIC) are planning to build plants in Pakistan.  Coming on the heels of the ongoing  solar revolution  in the country, these new EV entrants are helping accelerate Pakistan's  transition to clean energy.   These auto plants also create an opportunity for Pakistan to become a significant exporter of electric vehicles to developing nations.  BYD EV. Source: CNBC BYD, operating in Pakistan through a partnership with Mega Motor Company (a subsidiary of Hubco), has started building a $150 million assembly plant in Gharo, Sindh. Its initial target is to produce 25,000 units annually, with the capacity to scale up to 50,000 units a year. It...

Pakistan has long sought to  balance  its foreign policy between China and the United States through a pragmatic hedging strategy, gaining economic, military, and diplomatic benefits from both superpowers while maintaining strategic autonomy. But the relationship between Pakistan and China is not the same as the one between Pakistan and the United States. Pakistan's ties with China are strategic while those with the United States remain tactical and transactional. What has changed recently is that Pakistan is no longer waging war to help the United States as it did during the " Cold War " and the " War on Terror ". Instead, Pakistan has emerged as a peacemaker between the US and Iran.  Both China and US Are Courting Pakistan In a piece titled " Pakistan's Great Game ", French political scientist Christophe Jaffrelot has explained what he sees as Pakistan's "tactics and strategy" in dealing with the two superpowers. Here's a quote ...

Rogue AI agents are no longer just the stuff of science fiction. When an OpenAI rogue agent launched a cyber attack against AI startup Hugging Face this month, the company fought fire with fire, using an open-source Chinese AI model to defend against it.  During a test in a sandbox, an OpenAI autonomous agent managed to sneak out and attack a website operated by HuggingFace, an AI startup based in New York City. The OpenAI agent was not connected to the Internet but it found a way to access it and escaped its sandbox.  It took two days for Hugging Face to put an end to the attack, with help from GLM 5.2, an open weight system created by Chinese company Z.ai. All of this happened in the middle of a debate in the US about banning the use of Chinese AI models.  This incident gives one more reason to companies, including US-based firms, which are rapidly adopting  Chinese open-weight  AI models to save money. For example, Airbnb relies on Alibaba’s Qwen model, ...

On July 16 in Shanghai, 29 countries, including China, Pakistan and Russia, signed the founding agreement of WAICO, World AI Cooperation Organization.  Every BRICS founding member is in, except India. This agreement follows the launch of the US-led Pax Silica, a 24-member coalition, including  India , which is designed to counter China's AI efforts. The stated goal of both these competing groups is to provide global governance, including building guardrails and setting standards, for artificial intelligence (AI) technologies.  US-China AI Competition The announcement of WAICO coincided with the launch of Kimi K3 by  Chinese  startup Moonshot AI.  Kimi K3 is the largest open-weight AI model ever built, its full weights free for the world to download from July 27.  Cheaper open-source AI models like Kimi K3 pose a serious threat to U.S. proprietary models. By offering 80-90% of the capability at a fraction of the cost or for free, they are squeezing the ...

President Xi Jinping and Prime Minister Shehbaz Sharif have met today in Beijing to reaffirm the "unbreakable" bond between their two "iron brother" countries on the 75th anniversary of the establishment of the China-Pakistan diplomatic ties. "No matter how the international landscape may evolve, China will always place priority on the development of China-Pakistan relations in its diplomacy with neighboring countries," he said. Over 7 decades of friendship witnessed Pakistan help bring about the US-China rapprochement that has enabled the Asian giant to grow from international isolation to what President Donald Trump recently declared part of "G2", the exclusive group of two real superpowers in the world today. Prime Minister Shehbaz Sharif's three-day visit to China has seen the signing of multiple agreements to further strengthened strategic and economic relations between two Asian neighbors. These deals are aimed at developing Pakistan...

Worldwide demand for the JF-17 fighter jet, jointly developed by Pakistan Aeronautical Complex (PAC) and China’s Chengdu Aircraft Industry Group (CAIG), is  surging . It is attracting buyers in Africa, Asia and the Middle East. At just $40 million a piece, it is a combat-proven flying machine with no western political strings attached. It has enormous potential as the lowest-cost 4.5 generation fighter jet featuring AESA radar, enhanced electronics, and superior weapons systems.  Pakistan PFX Concept Fighter. Source: Raksha Anirveda In addition to the Pakistan Air Force, it is currently deployed by the air forces of Azerbaijan, Myanmar and Nigeria. Multi-billion dollar orders are in the pipeline from several countries, including Saudi Arabia, Libya and Sudan. Bangladesh is reportedly negotiating to purchase JF-17s in the near future. These orders are not just one-time purchases; they include service and training contracts, as well as spare parts and future upgrades. The US-bas...

As we enter the year 2026, it is time to review the year 2025 and wish you all Happy New Year 2026! May it bring peace, prosperity and happiness to all!!  The year 2025 saw Pakistan  defeat a brazen Indian attack  on its soil, while reviving its economy and fighting increasing terror. Pakistan's successful response to multiple serious challenges in 2025 helped significantly raise its geopolitical profile with improved ties with the United States and stronger relations with its friends in China, Russia and the Middle East. Pakistan’s GDP crossed the $400 billion mark in 2025. The year ended with Pakistani currency stable and the KSE-100, the key Pakistani stock market index,  achieving new record highs with over 50% annual return in US dollar terms for investors. Privatization efforts gained steam with the sale of the PIA, the debt-ridden money-losing state-owned national airline, to private Pakistani investors. The political issues between the rulers and the oppositi...

HS-1 is Pakistan's first hyper-spectral  satellite which is equipped with advanced hyperspectral imaging sensors capable of capturing data across hundreds of narrow spectral bands.  The satellite lifted off from China’s Jiuquan Satellite Launch Center on a Kinetica-1 rocket. It is expected to boost Pakistan's national capacities in areas such as precision agriculture, environmental monitoring, urban planning, and disaster management. Its high-resolution data will support improved resource management and strengthen Pakistan’s resilience to climate-related challenges.  Though the HS-1 satellite is primarily aimed at civilian applications, it will also have significant intelligence, surveillance and reconnaissance (ISR) capability for military applications. It is much more advanced than Pakistan's PRSS-1 satellite launched in 2018 which senses objects on earth in the optical RGB (Red-Green-Blue) range. The HS-1's high-resolution data will support improved resource manag...

The United States is the biggest export market for India. Among its top 5 trading partners, the US is also the only country with which India runs a trade surplus. This surplus is now at risk with the 50% tariff recently imposed by President Donald Trump on imports from India. Can Prime Minister Narendra make up for it by cozying up to China and Russia ? Recent trade data shows he can't.  While India has enjoyed a significant surplus in trade with the US,  the South Asian nation has been running large trade deficits with China and Russia. Last year, for example, India had a $100 billion trade deficit with China and a $62 billion deficit with Russia. On the other hand, India ran over a $40 billion trade surplus with the US. Given these figures, it's hard to understand what India hopes to achieve by getting closer to Beijing and Moscow. The fact is that the US is the world's biggest economy that offers the largest and most profitable export market for most countries. Loss of t...

Since the dawn of the 21st century, the US strategy has been to woo India and to build it up as a counterweight to rising China in the Indo-Pacific region. Most beltway analysts agree with this policy. However, the current Trump administration has taken significant actions, such as the imposition of 50% tariffs on India's exports to the US, that appear to defy this conventional wisdom widely shared in the West. Does President Trump have a grand strategy guiding these actions?  George Friedman, the founder of Geopolitical Futures, believes the answer is Yes.  George Friedman George Friedman is an American futurologist, political scientist, and writer. He writes about international relations. He is the founder and chairman of Geopolitical Futures. Prior to founding Geopolitical Futures, he was chairman of the publishing company Stratfor In a recent  podcast , Friedman said "India is not an essential country from the American standpoint". "They (Indians) are a useful al...

Prime Minister Narendra Modi appears to be shedding his Hindutva arrogance. He is reaching out to China after President Donald Trump and several top US administration officials have openly and repeatedly targeted  India for harsh criticism  over the purchase of Russian oil. Top American officials have accused India, particularly the billionaire friends of Mr. Modi, of “profiteering” from the Russian oil trade. While welcoming India’s outreach, the Chinese have indicated they expect New Delhi to stop covert aid to militant groups attacking Chinese interests in Pakistan. Meanwhile, Chinese Ambassador Xu Feihong in New Delhi recently told his Indian audiences that “Pakistan is a victim of terrorism”. Also, the United States has recently labeled the Baloch Liberation Army (BLA) and its affiliated the Majeed Brigade as “international terrorists”. Majeed Brigade claimed responsibility for hijacking of the Jaffar Express train in Balochistan and murdering 31 people in cold blood in M...