The agreement was moderately economically advantageous to Pakistan, which received grazing lands in the deal, but of far more significance politically, as it both diminished potential for conflict between China and Pakistan and, Syed indicates, "placed China formally and firmly on record as maintaining that Kashmir did not, as yet, belong to India.
Time, reporting on the matter in 1963, expressed the opinion that by signing the agreement Pakistan had further "dimmed hopes of settlement" of the
Kashmir conflict between Pakistan and India. Under this Sino-Pakistan Agreement, Pakistani control to a part of northern Kashmir was recognised by China. During this period, China was in dispute with India regarding Kashmir's eastern boundary, with India making claims of the border having been demarcated beforehand and China making claims that such demarcations had never happened. Pakistan and China recognised in their agreement that the border had been neither delimited nor demarcated, providing support to the Chinese position. According to ''
Jane's International Defence Review'', the agreement was also of significance in the Cold War, as Pakistan had ties with the United States and membership in the
Central Treaty Organization and the
Southeast Asian Treaty Organization. The agreement was part of an overall tightening of association with China for Pakistan, which resulted in Pakistan's distancing from the United States. After defining borders, the two countries also entered into agreements with respect to trade and air-travel, the latter of which was the first such international agreement China had entered with a country that was not
Communist. == Modification of Treaty ==