China Launches Economic Investment Projects in Pakistan

• 04.20.2015, 23:32
•  Asia,  World

China is launching new economic projects with Pakistan in order to recreate the old allies between these two countries. President Xi Jinping is in Pakistan to start $46 billion worth project with the Western neighbor, Reuters reports.

The new projects are based on infrastructure and energy development which aimed to create a Pakistan – China Economic Corridor between Gwadar port (Pakistan’s southern international port on the Arabian Sea) and Xinjiang region (in western part of China).

The only concern for China’s government is that corridor is passing through politically unstable region of Pakistan – Baluchistan province, which is isolated because of Islamic militants, criminal gangs and rebellions. There is a concern that Muslim separatists also from Xinjiang region and Pakistan militaries are linking up. The cooperation in the security and economic fields reinforce each other and they must be advanced simultaneously, the president Xi said in the Pakistan media.

China is going to provide $34 billion only for investment of the energy projects and $12 billion for infrastructure projects. The investment process will be done by China’s government, China Development Bank and other state owned commercial banks that will lend to Chinese companies.

The deal towards infrastructure and energy programs is mutually beneficial for both sides. It is not only economic development between neighboring countries, it also possesses fragment of political stability in the region. China strengthened its economic positioning in Asia by investments which aimed to reduce the economic dependency in the region from the US. But this is not the only aim for China, the corridor linked between Pakistan and China gives opportunity for China to reach Arabian Sea in easy way, which will boost its trade relationship between China and Gulf countries. The benefit for Pakistan is the major investment especially in infrastructure development and good trade relation with the Asian giant China, besides political stability that should be controlled by China as well.