Implications of new ‘Silk Route’

Dubai: Pakistan Prime Minister Nawaz Sharif’s recent five-day trip to China after assuming power has been termed highly successful in Islamabad. Important deals were inked on this visit that is emblematic of Sharif’s economic policy aimed at fixing the country’s staggering economy. But more significant is the strategic development pertaining to the decision to develop the trade corridor between the two countries — a project with regional implications beyond South West Asia.

The much-publicised agreement to speed work on developing a 2,000-km trade corridor linking Gwadar Port on Pakistan’s Makran Coast to Kashgar in China’s Xingjian province has been called a “game changer” by Sharif.

Second, the purpose of this corridor is to give China the shortest route possible for its crucial energy imports from the Gulf states. And vice versa a convenient route for its exports to the Gulf, Africa and Europe.

This project has high stakes for Pakistan in terms of boosting its economy, developing high-grade infrastructure, creating thousands of jobs and serving as a strategic conduit for energy imports. But more important, by default, it also serves as an important crucial link in the energy export chain to China and Central Asia for the Gulf states.

The project entails the construction of road and rail links passing through around almost 2,000 km of difficult territory, including vast stretches of uninhabited areas in Balochistan and the northern mountainous areas in Pakistan, linking it to Karakoram Highway.

Close to the Straits of Hormuz, Gwadar’, undoubtedly has the potential to become the gateway to Central Asia and China. Its location at the junction of the world’s three most important strategic and economic regions– Middle East, South Asia and Central Asian Republics – makes it potentially viable to generate billions in annual transit trade. As part of shift in policy, Saudi Arabia and other GCC states have been keenly pursuing trade and economic links with China and other Asian states.

Similarly China’s growing needs for energy resources, food and minerals from the Gulf and Africa has also boosted trade between the regions. The availability of alterative trade routes, especially those that cut distance and time are likely to benefit both.

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The proposed Gwadar-Khunjerab-Kashgar link could thus serve those needs ideally, once it has been set up. There were plans earlier to connect Gwadar with Port Qasim in Karachi and the new rail and road links with Kashgar could boost the capacity for trade.

Full article: Implications of new ‘Silk Route’ (Gulf News)

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