Chinese premier visits Pakistan to launch $46B project

Chinese Premier Xi Jinping to announce $46 billion infrastructure and energy project in two day Pakistan visit

Updated Jul 28, 2015

Chinese Premier Xi Jinping is starting his two day Pakistan visit on Monday where he is to unveil $46 billion investment projects to strengthen the ties between the two countries.

Biggest portion of the investment will go to infrastructure and energy projects on China Pakistan Economic Corridor (CPEC) between Pakistan's southern Gwadar port in Balochistan region on the Arabian Sea and Kashgar city in China's western Xinjiang region.

The CPEC is seen as a revitalisation of historical Silk Road with railroads and highways stretching 3000 kilometres from Arab Sea to China.

China will increase its influence in Pakistan in particular and the region in general as the project dwarfs any foreign investment done so far in Pakistan and that expected to boost economies of the two countries as they try to contain India, their common regional rival.

“Our cooperation in the security and economic fields reinforce each other, and they must be advanced simultaneously,” said Chinese Premier Xi on Sunday before embarking on his visit.

As regions at both ends of the project, Balochistan in Pakistan and Xinjiang in China, have a history of separatist insurgency. Both governments are expected to adopt new measures to secure the project.

Pakistan is set to form a special security force of thousands to protect the Chinese workers and engineers who will come to Pakistan for the project.

Chinese companies working in the projects will receive loans from China's government and state owned banks.

Pakistan's Minister for Planning and Development, Ahsan Iqbal, said $34 billion of the finances will come from Chinese government and remaining $12 billion will be covered by the concessional loans.

Construction of power plants alongside trade corridor to meet the electricity demand of Pakistan will be one of the most important aspects of the project.

Pakistan is suffering from shortage of electricity as scheduled daily cuts cripple industry and the social life.

Ending electricity cuts and solving county’s energy problem were the main promises of Pakistani Prime Minister Nawaz Sharif in 2013 elections.

In the longer run, Pakistan hopes to become a regional economic hub as it will connect China to the West.

Talking about the CPEC, Iqbal said: “Very substantial and tangible projects which will have a significant transformative effect on Pakistan's economy.”

TRTWorld and agencies