Pakistan Prime Minister Nawaz Sharif with Chinese Premier Li Keqiang during a welcome ceremony held outside the Great Hall of the People in Beijing on July 5. Image Credit: AP

Dubai: Pakistan Prime Minister Nawaz Sharif’s recent five-day trip to China after assuming power has been termed highly successful in Islamabad. Important deals were inked on this visit that is emblematic of Sharif’s economic policy aimed at fixing the country’s staggering economy. But more significant is the strategic development pertaining to the decision to develop the trade corridor between the two countries — a project with regional implications beyond South West Asia.

The much-publicised agreement to speed work on developing a 2,000-km trade corridor linking Gwadar Port on Pakistan’s Makran Coast to Kashgar in China’s Xingjian province has been called a “game changer” by Sharif.

While credit must be given to the Pakistan premier for his plans to speed up this ambitious project — perceived as pivotal to the country’s economic prosperity — there are several underlying factors, especially security and political differences within Balochistan, that will have to be incorporated in policy formulation for the corridor’s implementation.


Such is the enthusiasm for propelling Pakistan-China’s economic and strategic ties to new levels that Sharif even announced the formation of a ‘China Cell’ in the prime minister’s house.

However, given the precarious security situation, especially along the prospective route of this corridor, it remains to be seen if this dream project can attain full potential and be able to repay anticipated dividends to both Pakistan and China.

For one, the Gwadar to Kashgar (Xingjian province in China) trade corridor passes through territory that is deemed a high security risk zone.

Second, the purpose of this corridor is to give China the shortest route possible for its crucial energy imports from the Gulf states. And vice versa a convenient route for its exports to the Gulf, Africa and Europe.

This project has high stakes for Pakistan in terms of boosting its economy, developing high-grade infrastructure, creating thousands of jobs and serving as a strategic conduit for energy imports. But more important, by default, it also serves as an important crucial link in the energy export chain to China and Central Asia for the Gulf states.

The project entails the construction of road and rail links passing through around almost 2,000 km of difficult territory, including vast stretches of uninhabited areas in Balochistan and the northern mountainous areas in Pakistan, linking it to Karakoram Highway.

The cost of this development will be in billions of dollars, an investment China is reported to have already pledged in the form of ‘soft loans’. The railway infrastructure that is to provide crucial links for transporting oil, gas (from Gulf) and minerals and food (from Africa) is at present non-existent.

The existing railway lines that may be used to connect to the new communication network will require massive upgrading. Providing security for both rail and road transportation is something that will require proper planning and provision of massive resources by the government. There have been past incidents involving hostage taking and targeted killings of Chinese engineers and other personnel working on development and infrastructure projects in the country, much to the embarrassment of the Pakistan government.

Ensuring security for foreign specialists working on development projects is something Pakistan needs to look into as an immediate priority. Sharif’s quest to bring in foreign investments will only be successful if the security needs for those projects are met fully. Pakistan and China have also signed agreements to develop industrial cities in various parts in Pakistan including at Gwadar.

Close to the Straits of Hormuz, Gwadar’, undoubtedly has the potential to become the gateway to Central Asia and China. Its location at the junction of the world’s three most important strategic and economic regions– Middle East, South Asia and Central Asian Republics – makes it potentially viable to generate billions in annual transit trade. As part of shift in policy, Saudi Arabia and other GCC states have been keenly pursuing trade and economic links with China and other Asian states.

Similarly China’s growing needs for energy resources, food and minerals from the Gulf and Africa has also boosted trade between the regions. The availability of alterative trade routes, especially those that cut distance and time are likely to benefit both.

Key link

The proposed Gwadar-Khunjerab-Kashgar link could thus serve those needs ideally, once it has been set up. There were plans earlier to connect Gwadar with Port Qasim in Karachi and the new rail and road links with Kashgar could boost the capacity for trade.

More ambitious plans that were floated earlier included linking Gwadar with a Trans Asia-European railway project starting from Malaysia, and passing via India, Pakistan, Iran, Afghanistan, Central Asia Republics and ending in Europe. While this may seem far-fetched at present, given the tensions prevalent in South West Asia, it is not impossible. Pakistan and India for once seem keen on moving beyond past acrimonies and boosting trade as part of an ‘economic roadmap to peace’.

Gwadar’s potential to serve as a transit hub for grain and food storage facilities, as well as industrial and processing zones would further boost investment opportunities. The establishment of an oil refinery and storage depots at the site could be beneficial to the Gulf as well as China. More importantly, the location could prove useful to have strategic oil reserve facility in case of an emergency either due to a conflict or other developments affecting the shipping routes in the Hormuz.

The fact that Gwadar is a short distance from Chabahar, the Iranian port that has been heavily invested in by India also puts an interesting spin on how China and India are ever mindful of maintaining a strategic presence in the Arabian Gulf.

It will be interesting to see how Islamabad deals with US on the issue since Washington has made clear its displeasure over Pakistan’s decision to hand over operations of running Gwadar Port to China Overseas Port Holding Company. The Americans had also been upset over Pakistan’s decision to sign the Iran-Pakistan gas pipeline deal.

While the mood in Pakistan is optimistic with Sharif’s government buoyed by the economic deals in China, ground reality requires deeper introspection especially at the country’s security policy.

Unless Islamabad takes serious action against terror outfits at home. In fact, foreign investments and development work of such magnitude will galvanise further threats from groups with vested interests.

Even if it means a lessening of popularity, the government must take firm action and devise a policy in consultation with the military that reins in groups targeting the state and people with impunity.