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China and Pakistan pave way for ‘economic corridor’

Pakistan and China sign agreements to build a new airport and upgrade the fabled Karakorum Highway

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Published: 8:43pm, 19 Feb, 2014

Updated: 5:01pm, 20 Feb, 2014

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Pakistan's President Hussain and China's President Xi greet children holding flowers and miniature flags of both countries during a welcoming ceremony in Beijing. Photo: Reuters

Longtime allies Pakistan and China signed agreements on Wednesday to build a new airport and upgrade the fabled Karakorum Highway as part of efforts to build an “economic corridor” through rugged mountains and regions torn by insurgent violence.

Friendship with China is the most important pillar of our foreign policy and security policy Mamnoon Hussain

The signings followed a summit in Beijing between Pakistani President Mamnoon Hussain and Chinese leader Xi Jinping that underscored close ties between the neighbours.

“Friendship with China is the most important pillar of our foreign policy and security policy,” Hussain said in brief comments at the start of their meeting, which followed a formal welcoming ceremony at Beijing’s Great Hall of the People.

Xi said “the Chinese people cherish a profound friendship with the people of Pakistan.”

Pakistani President Mamnoon Hussain (left) attends a meeting with Chinese President Xi Jinping at the Great Hall of the People in Beijing on Wednesday. Photo: AP

While Islamabad and Beijing have long found common cause in opposing mutual rival India and co-operate closely in military and diplomatic affairs, economic ties have lagged. That’s largely a result of Pakistan’s poorly functioning government and lack of basic infrastructure such as power plants for generating electricity, something Pakistan is looking to China for help improving. Two-way trade exceeded US$12 billion for the first time in 2012, a tiny fraction of China’s overall commerce with the world.

The planned economic corridor will incorporate a 2,000-kilometre transport link connecting Kashgar in northwestern China to the little-used Pakistani port of Gwadar on the Arabian Sea near the border with Iran. That could at some point include a railway and oil pipeline.

The project received a major boost when control of Gwadar was transferred to China’s state-owned China Overseas Ports Holding in February last year. Built by Chinese workers and opened in 2007, Gwadar is undergoing a major expansion to turn it into a full-fledged, deep-water commercial port.

One of the agreements signed on Wednesday was a preliminary accord for constructing an international airport at Gwadar. Another was for upgrading a section of the 1,300-kilometre Karakorum Highway connecting to Islamabad.

The sides last year already agreed to build a fibre-optic cable to be laid from the Chinese border to the Pakistani city of Rawalpindi which will boost Pakistan’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.

If the corridor project takes off, oil from the Middle East could be offloaded at Gwadar, which is located just outside the mouth of the Persian Gulf, and transported to China through the lawless Baluchistan province in Pakistan and over the towering Karakoram mountains. Such a link would vastly cut the 12,000-kilometre route that Mideast oil supplies must now take to reach Chinese ports.