03/22/2007, 00.00
PAKISTAN – CHINA

Chinese-funded port in Baluchistan to give Beijing direct access to the Middle East

The new port of Gwadar is inaugurated. Experts note that it will become a key transit point for oil, gas and all sorts of goods destined for China from the Middle East, Iran, Central Asia and even Africa. Economic cooperation between Pakistan and China is growing fast.

Quetta (AsiaNews/Agencies) – Pakistan's President Pervez Musharraf inaugurated a deep sea port in Gwadar, in the southern province of Baluchistan, on Tuesday. For many experts it will give China, which paid for much of the construction, direct access to the Middle East and the Arabian Sea.

“This port would prove to be a trade corridor for Central Asian states, China and the [Persian] Gulf as 60 per cent trade of oil and gas is done through this route,” the president said. “The same Chinese friends [who helped build the port] will build an airport here for us, where the best aircraft will come,” Musharraf added.

A high-level Chinese delegation, led by Minister for Communications Li Shenglin, was in attendance.

Gwadar port is on the Arabian Sea, not far from the Strait of Hormuz where 30 per cent of the world's daily oil supply moves by ship or pipeline. It is also close to Afghanistan, not far from the oil- and gas-rich countries of the Caucasus and Central Asia, and some 70 kilometres (45 miles) from the Iranian border.  Two thirds of the world’s oil reserves are in the region.

Pakistani officials have been keen to stress that the port will benefit Baluchistan, a Pakistani province that is currently affected by a local rebellion against Islamabad.

But analysts insist that it will be especially important in meeting China’s needs. China has provided 80 per cent of Gwadar Port’s US$ 248 million initial development costs (other sources put the total cost much higher).

Thanks to this port China will become a major player in the Middle East. Roads and railways will directly link Gwadar to China. Beijing has in fact already spent US$ 200 million building a coastal highway connecting Gwadar port to Karachi.

The port is said to be part of Chinese naval expansion along the Asian and African coasts dubbed the 'string of pearls' initiative, according to a US Department of Defence report.

And Beijing wants Gwadar to be the gateway port for its western region, since its eastern seaboard is 3,500 km from Kashgar, the main city in the far west of China's Xinjiang province, but only 1,500 km from Gwadar.

Since Beijing is eyeing Central Asia's oil and gas reserves, it plans to run oil and gas pipelines to Gwadar from the Central Asian republics and wants to turn the facility into a transit terminal for Iranian and African crude-oil imports. It also wants to build a refinery and petrochemical complex with an initial 10 million tonnes per year capacity, later expanding to 63 million tonnes, as set out in memorandum of understanding signed by Pakistan and the China last December.

Both countries are expected to announce several deals when Pakistani Prime Minister Shaukat Aziz visits China next month.

Scores of formal agreements have increased the total trade volume between Pakistan and China from less than US billion in 2000 to about billion by the end of 2006. Many Chinese companies are already in Pakistan, operating in the oil-and-gas, information-technology, telecommunications, power-generation, engineering, automobile-manufacturing, infrastructure and mining sectors.

Analysts point out that China helped Pakistan develop nuclear technology, not only through money. For instance, in 2004 Beijing pledged US$ 150 million for Chashma Nuclear Power Plant in Punjab.

As for Gwadar port, Baluchi tribal leaders were always against the project since its inception in 2002. They accuse Islamabad of sideling locals in the distribution of revenues and jobs arising from its development.

The issue erupted into a full scale insurgency in 2003 pitting local tribesmen and government forces. Hundreds have been killed in the fighting, including six Chinese engineers.

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