On April 20, the Chinese president Xi Jingping visited Pakistan to launch the Pak-China Economic Corridor *(PCEC), a conglomeration of energy and transport projects aiming at giving Pakistan an economic boost and China a shorter and cheaper route for trade with much of Asia, the Middle East and Africa.
The Economic corridor ,a comprehensive package of cooperative initiatives and projects, covers key areas such as energy cooperation, industrial parks, agricultural development, poverty alleviation, tourism, financial cooperation, information network infrastructure, education and public health. It also entails building of oil storage facilities and a refinery at the Pakistani port of Gwadar and 3,000 km network of pipelines, railways and motorways stretching from Gwadar through Pakistan to Kashghar in western China.The two partners also agreed to further strengthen cooperation in civil nuclear energy, space and maritime technology, counter-terrorism and defense.
Some political analysts maintain that China's move is aimed at countering U.S.A. and Indian influence in the Asia-Pacific region. Others, however, argue that the corridor is more about boosting China's economic interests and is an important pillar of China's broader policy, "One Belt, One Road ", which seeks to physically connect China to its markets in Asia, Europe and beyond. But a much closer analysis reveals that the corridor is important for China from both an economic and strategic perspectives.
The Chinese president announced *$45.6 billion package for this developmental megaproject, out of which *$11.8 billion will be directed towards infrastructure projects and *$622 million on Gwadar port. According to the First post report, "This is the largest overseas investment by China announced yet and the corridor is expected to be operational within three years and will be a strategic game changer in the region, which would go a long way in making Pakistan a richer and stronger entity than ever before."
Gwadar, the terminus of the corridor, is strategically located on the Arabian Sea Coast of Balochistan Pakistan, near the oil rich Persian Gulf region and the Strait of Hormuz. Oil exports from the Persian Gulf, accounting for around 40 percent of the world's internationally traded oil, most pass through the Strait of Hormuz. China’s stake in Gwadar will also allow it to expand its influence in the Indian Ocean, an important route for transportation of energy resources and trade. Gwadar is set to begin commercial operations this year and a final agreement on building a new international airport there was also signed by the Chinese president during his visit to Pakistan.Being cautious of Chinese strategic access to the Arabian Sea and its influence in the region, the U.S.A.had reportedly made attempts in vain to persuade Pakistan against handing over the management of Gwadar port to China.
Another benefit of the corridor to China is that it will enable China to bypass the Strait of Malecca and instead use Pakistan as a conduit for energy transport and trade purpose. China, the world's biggest oil importer, imports 60 percent of its oil from the Middle East and transports 80 percent of that through the Indian Ocean, the Strait of Malecca and the South and East China Seas -- a distance of 9,912 miles. China spends about $18 million per day as shipment costs on import of 6.3 million barrels of oil routing through this Strait. By opening up more direct land route from Gwadar to Kashghar, China will cut these costs considerably down to about 30 percent of the current levels as the new distance will be just 3000 km from Gwadar to Kashghar.
From a strategic perspective, the corridor is of paramount significance for China amid the escalating military tensions unleashed by Obama’s foreign policy, "Pivot to Asia ", designed to contain and encircle China with an alliance including India, Vietnam, South Korea, Japan, Australia, Singapore and Philippines. This corridor will serve as an alternative route for Chinese trade, thereby allowing China to circumvent the threat of a blockade of Chinese oil supplies through the Strait of Malecca by the USA and allied navies in the wake of a future war in Asia.
Keeping in view the weak infrastructure in Pakistan and western China, the main task of the corridor will be the construction of transport lines to establish the smooth connectivivity to make economic factors move smoothly. Beijing fears that without its intervention, terrorism, extremism and economic stagnation in Pakistan will filter across into its bordering northwestern region of Xinjiang, which has a large Muslim population. Xinjiang Province has faced marginalization and a separatist movement by the Uyghur Muslim population, which China sees as instigated by the U.S. CIA. Beijing now seems to hope that speeding up development and economic advance will bring prosperity and tranquility to this region. China has decided to develop Xinjiang province by turning Pakistan into a sort of Hong Kong. Xi said, " Our cooperation in the security and economic fields reinforce each other and they must be advanced simultaneously. "
The CPEC is a comprehensive deal that encompasses economic and strategic integration between China and Pakistan. At the same time, the corridor constitutes an important step of China’s efforts to keep the U.S. from increasing its presence *and influence in Southeast Asia and therefore bears an immense significance in the context of Sino-U.S strategic competition in Southeast Asia.
Dr Ali Ahmad
London
The Economic corridor ,a comprehensive package of cooperative initiatives and projects, covers key areas such as energy cooperation, industrial parks, agricultural development, poverty alleviation, tourism, financial cooperation, information network infrastructure, education and public health. It also entails building of oil storage facilities and a refinery at the Pakistani port of Gwadar and 3,000 km network of pipelines, railways and motorways stretching from Gwadar through Pakistan to Kashghar in western China.The two partners also agreed to further strengthen cooperation in civil nuclear energy, space and maritime technology, counter-terrorism and defense.
Some political analysts maintain that China's move is aimed at countering U.S.A. and Indian influence in the Asia-Pacific region. Others, however, argue that the corridor is more about boosting China's economic interests and is an important pillar of China's broader policy, "One Belt, One Road ", which seeks to physically connect China to its markets in Asia, Europe and beyond. But a much closer analysis reveals that the corridor is important for China from both an economic and strategic perspectives.
The Chinese president announced *$45.6 billion package for this developmental megaproject, out of which *$11.8 billion will be directed towards infrastructure projects and *$622 million on Gwadar port. According to the First post report, "This is the largest overseas investment by China announced yet and the corridor is expected to be operational within three years and will be a strategic game changer in the region, which would go a long way in making Pakistan a richer and stronger entity than ever before."
Gwadar, the terminus of the corridor, is strategically located on the Arabian Sea Coast of Balochistan Pakistan, near the oil rich Persian Gulf region and the Strait of Hormuz. Oil exports from the Persian Gulf, accounting for around 40 percent of the world's internationally traded oil, most pass through the Strait of Hormuz. China’s stake in Gwadar will also allow it to expand its influence in the Indian Ocean, an important route for transportation of energy resources and trade. Gwadar is set to begin commercial operations this year and a final agreement on building a new international airport there was also signed by the Chinese president during his visit to Pakistan.Being cautious of Chinese strategic access to the Arabian Sea and its influence in the region, the U.S.A.had reportedly made attempts in vain to persuade Pakistan against handing over the management of Gwadar port to China.
Another benefit of the corridor to China is that it will enable China to bypass the Strait of Malecca and instead use Pakistan as a conduit for energy transport and trade purpose. China, the world's biggest oil importer, imports 60 percent of its oil from the Middle East and transports 80 percent of that through the Indian Ocean, the Strait of Malecca and the South and East China Seas -- a distance of 9,912 miles. China spends about $18 million per day as shipment costs on import of 6.3 million barrels of oil routing through this Strait. By opening up more direct land route from Gwadar to Kashghar, China will cut these costs considerably down to about 30 percent of the current levels as the new distance will be just 3000 km from Gwadar to Kashghar.
From a strategic perspective, the corridor is of paramount significance for China amid the escalating military tensions unleashed by Obama’s foreign policy, "Pivot to Asia ", designed to contain and encircle China with an alliance including India, Vietnam, South Korea, Japan, Australia, Singapore and Philippines. This corridor will serve as an alternative route for Chinese trade, thereby allowing China to circumvent the threat of a blockade of Chinese oil supplies through the Strait of Malecca by the USA and allied navies in the wake of a future war in Asia.
Keeping in view the weak infrastructure in Pakistan and western China, the main task of the corridor will be the construction of transport lines to establish the smooth connectivivity to make economic factors move smoothly. Beijing fears that without its intervention, terrorism, extremism and economic stagnation in Pakistan will filter across into its bordering northwestern region of Xinjiang, which has a large Muslim population. Xinjiang Province has faced marginalization and a separatist movement by the Uyghur Muslim population, which China sees as instigated by the U.S. CIA. Beijing now seems to hope that speeding up development and economic advance will bring prosperity and tranquility to this region. China has decided to develop Xinjiang province by turning Pakistan into a sort of Hong Kong. Xi said, " Our cooperation in the security and economic fields reinforce each other and they must be advanced simultaneously. "
The CPEC is a comprehensive deal that encompasses economic and strategic integration between China and Pakistan. At the same time, the corridor constitutes an important step of China’s efforts to keep the U.S. from increasing its presence *and influence in Southeast Asia and therefore bears an immense significance in the context of Sino-U.S strategic competition in Southeast Asia.
Dr Ali Ahmad
London
