Li Keqiang

China, Pakistan ink eight deals to boost trade, create 'economic corridor'

Agreement on 'economic corridor' is among eight mutually beneficial deals Li and Sharif sign

PUBLISHED : Saturday, 06 July, 2013, 12:00am
UPDATED : Saturday, 06 July, 2013, 3:42am

Beijing and Islamabad set their sights yesterday on developing a transport link through rugged mountains and lawless lands, a route they hope will boost economic growth and bring critical oil supplies to energy hungry China much faster.

A broad agreement for the "economic corridor" was among eight pacts signed after a meeting in Beijing between Premier Li Keqiang and Pakistani Prime Minister Nawaz Sharif. The 2,000 kilometre transport link was described as a "long-term plan" to connect Kashgar in northwestern China to the Pakistani port of Gwadar, likely by road initially and possibly by rail later.

Pakistan hopes to attract greater Chinese investment to revive its economy beset by inefficiency, corruption, political instability and chronic electricity shortages, while expanding two-way trade that exceeded US$12 billion for the first time last year.

For its part, China wants Pakistan to crack down on insurgents from China's Muslim Uygur minority who have taken refuge in Pakistan's northwest alongside al-Qaeda-linked extremists.

Another deal is for a fibre-optic cable from the Chinese border to the Pakistani city of Rawalpindi, which will boost Islamabad's access to international communications networks. China is to provide 85 per cent of the financing for the three-year project's US$44 million budget, with Pakistan covering the rest.

Sharif's visit to China is his first foreign trip since returning to power last month, highlighting the importance Pakistan places on its 63-year-old relationship with its most important ally in the region. The two co-operate closely in diplomatic and defence affairs, and share a common rival in neighbour and occasional military opponent, India.

"What I am witnessing here on my visit to Beijing, it reminds me of the saying: Our friendship is higher than the Himalayas and deeper than the deepest sea in the world, and sweeter than honey," Sharif told Li at the start of their meeting.

He was employing the usual effusive language with which the two nations describe their relationship.

A joint statement issued after the meeting affirmed their support for an Afghan-led peace effort in the country following the withdrawal of US troops next year.

It said they would "work with regional countries and the international community to help Afghanistan achieve peace, stability and security".