Chinese President Xi Jinping arrived in Pakistan yesterday to launch $46 billion in projects linking the allies, a figure that would far exceed US spending in Pakistan and underscores China’s economic ambitions in Asia and beyond.
The infrastructure and energy projects are aimed at establishing a Pakistan-China Economic Corridor between Pakistan’s southern Gwadar port on the Arabian Sea and China’s western Xinjiang region.
The plan is part of China’s aim to forge ‘Silk Road’ land and sea ties to markets in the Middle East and Europe and reflects a shift of economic power in the region to China, said Mushahid Hussain Sayed, chairman of the Pakistani parliament’s defence committee.
“Pakistan, for China, is now of pivotal importance. This has to succeed and be seen to succeed,” he said.
The corridor, a network of roads, railways and pipelines, will pass through Pakistan’s poor Baluchistan province where a long-running separatist insurgency, which the army has again vowed to crush, will raise doubts about the feasibility of the plan. The security of Chinese workers will be a prime concern for Xi. In his talks with Pakistani Prime Minister Nawaz Sharif and military leaders, Xi is also likely to raise China’s fears that Muslim separatists from Xinjiang are teaming up with Pakistani militants.
Xi has linked economic cooperation with security.
“Our cooperation in the security and economic fields reinforce each other, and they must be advanced simultaneously,” he said in a statement to media on the eve of his two-day visit.
Xi is expected to call for greater efforts to bring peace to Afghanistan, where Pakistan is keen to restrict the influence of is rival India.
Pakistan, for China, is now of pivotal importance. This has to succeed and be seen to succeed
China will provide up to $37 billion in investment for the energy projects to generate 16,400 MW of power, said Ahsan Iqbal, Pakistan’s minister for planning and development.
Concessional loans will cover nearly $10 billion of infrastructure projects.
The US has given $31 billion to Pakistan since 2002, according to the Congressional Research Service. About two-thirds was earmarked for security.
Despite Chinese-US competition for influence across Asia, they share interests in Pakistan, with both wanting a stable government fighting militancy, said Andrew Small, author of a book on China-Pakistan relations.
“China would like US support for Pakistan to continue, in terms of aid, selling arms, and other support,” Small said.
Few details of the projects have been finalised, and it is not only the Baluchistan insurgency that stands in the way of the ambitious plan becoming reality.
Xi may seek assurances that Pakistan will rein in corruption and that the leaders he is to meet from rival political parties will be willing to make a long-term commitment.
“We should be cautious because of Pakistan itself, not China,” said Imtiaz Gul of the Centre for Research and Security Studies, adding that Pakistan’s bureaucracy, political leadership and national unity would be tested as China seeks to build trade links.
Pakistani officials have said China’s government and banks, including China Development Bank and the Industrial and Commercial Bank of China Ltd, will lend to Chinese companies, which will invest in projects as commercial ventures.
Chinese companies investing in the projects will include Three Gorges Corp, China Power International Development Ltd, Huaneng Group, ICBC Corporation and Zonergy Corporation, officials said.
Sharif made ending chronic power blackouts a central promise of his 2013 election campaign and will be hoping for an improvement before the next polls in 2018.