On 20 April 2015, China and Pakistan launched a plan for energy and infrastructure projects in Pakistan worth $46 billion, linking their economies and underscoring China’s economic ambitions in Asia and beyond.
China’s President Xi Jinping arrived in Pakistan to oversee the signing of agreements aimed at establishing a China-Pakistan Economic Corridor between Pakistan’s southern Gwadar port on the Arabian Sea and China’s western Xinjiang region.
The plan, which would eclipse U.S. spending in Pakistan over the last decade or so, is part of China’s aim to forge “Silk Road” land and sea ties to markets in the Middle East and Europe.
Pakistani Prime Minister Nawaz Sharif said the corridor would transform Pakistan into a regional hub and give China a shorter and cheaper route for trade with much of Asia, the Middle East and Africa.
The corridor, a network of roads, railways and pipelines, will pass through Pakistan’s poor Baluchistan province, where a long-running separatist insurgency that the army has vowed to crush will raise questions about the feasibility of the plan.
China is also worried about Muslim separatists from Xinjiang teaming up with Pakistani militants. Although Xi did not refer to the issue on, he linked economic cooperation with security.
The two sides also agreed to strengthen cooperation in civil nuclear energy, space and maritime technology, counter-terrorism and defence.
Pakistan says China will provide up to $37 billion in investment for energy projects to generate 16,400 MW of power. Concessional loans will cover nearly $10 billion of infrastructure projects.
Chinese President Xi Jinping applauded Pakistan’s anti-terrorism efforts in a speech to Parliament, vowing his nation would continue to stand by its neighbour. Lawmakers gave Xi a standing ovation after his address, aired live on state-run Pakistani TV. Legislators, military leaders and foreign ambassadors all attended the speech.
Xi pledged in his speech that China and Pakistan will always move forward together and the Chinese people will always stand together with the Pakistani people.
China is a leading arms supplier to Pakistan and has sought its help in combating anti-Chinese Islamic separatists reportedly hiding in Pakistan’s lawless tribal areas. China also wants to enlist Pakistan’s help in stabilizing Afghanistan as U.S. and international troops wind down their presence there.