China and Pakistan’s $51-billion project

China seem hell-bent on developing their investments in other parts of the global.  We’ve seen some extraordinary development in the South China Sea, with China building artificial islands as a means to claim sovereignty over long disputed fishing grounds.  Tighter restrictions across Australia have been imposed as a means of preventing vast Chinese investment in mining and farming land.  London too has been exposed to large Chinese investment, as house prices continue to climb beyond local affordability.

So what next?

In recent times China and Pakistan have rekindled economic ties, which date back to the 1950’s.  In 1959 construction of the Karakoram Highway began, which aimed to connect the China’s western border to Pakistan's deep water ports on the Arabian Sea.  This early project proved economic ties were viable, with China boosting interest with the construction of Gwadar Port. 

Fast forward to 2013 and China and Pakistan have put plans in place to build “The China–Pakistan Economic Corridor”, a $51-billion project intended to rapidly expand and upgrade Pakistani infrastructure, as well as deepen and broaden economic links between Pakistan and the People's Republic of China.

The project initial focus will be on transport links, connecting the length and breadth of Pakistan. Once complete the new links will connect the city of Gwadar in southwestern Pakistan, to China's north-western autonomous region of Xinjiang. Much of the transport infrastructure will cost around $11-billion, with the remainder intended for energy generation, which will be constructed by private consortia to help alleviate Pakistan's chronic energy shortages.

With such large investment from China (equivalent to 17% of Pakistan's 2015 gross domestic product), it’s clear China have a strong intent to be the primary supplier for the fast growing Pakistan consumer market.  India had hoping to overcome a difficult former history, with investment plans of their own aimed at this close neighbour, but it seems China have invested at a crucial time.