The Chinese government has committed to providing funding and support for a number of projects in Pakistan through the China-Pakistan Economic Corridor (CPEC) agreement. At the heart of everything is the port city of Gwadar, situated on the south western tip of the country.
It’s strategic location and its vast potential as a deep sea port are emphasised by the fact that the port is just 600 kilometres from the Strait of Hormuz. That is one of the key reasons that Gwadar is now leased to China and while the Chinese government is set to feel the benefits from the region’s development, what, exactly, are they putting back?
What is China backing in Gwadar?
Chinese investment as a whole forms part of an overall Global Belt and Road Initiative. Plans for the GBRI were first announced by President Xi Jinping in 2013 and varying descriptions list them as either China’s version of the Marshall Plan or a solution to wider economic blues.
It’s something of a modern day silk road and it embraces over 150 countries across several continents. The commitment by China is to improve road networks and infrastructure across those vast territories. Pakistan, therefore, forms a small part of that but as a near neighbour to China, its role, along with that of Gwadar, is an important one.
What investments are specific to Gwadar?
The importance of the wider GBRI project cannot be understated but there are projects that are more specific to Gwadar. These include future operations including the construction of a crude oil pipeline that will start here and span the whole of the China-Pakistan Economic Corridor.
We know that China is also aiming to set up an industrial park where many sectors of business will open up. Plans for that model are ongoing so the exact nature of the industries involved will be revealed in the months that lie ahead.
What are the confirmed Chinese financial commitments?
The developments in relation to the industrial park may be still ongoing but there are many investments that have been confirmed and are in advanced stages of development. These include the installation of breakwaters at Gwadar port which will cost some $130 million to construct. China had also committed to dredge the berths in Gwadar harbour and that, alone, will cost $27 million.
Also falling under the auspices of Chinese investment is a 300 bed hospital in Gwadar, the bill for which is expected to come in at $100 million. Other projects involve a coal power plant and a desalination plant but the biggest investment to date surrounds the new city airport.
The airport in Gwadar will, when complete, become the biggest in Pakistan with China having put forward a grant worth a mighty $230 million to advance its construction. There is no doubt that China is heavily invested in Gwadar and recognises that the city forms a crucial part of the entire CPEC agreement.