China and Pakistan have together unveiled plans for $46bn in vital energy and infrastructure projects, as the nations look to strengthen their existing relationship and construct a “land corridor” between the two. China’s Xi Jinping was in Islamabad to oversee the signing of the agreement, and the plans, once completed, include a Pakistan-China Economic Corridor – or superhighway – that runs from China’s western Xinjiang region to Pakistan’s southern port of Gwadar, as well as a whole host of energy projects.
Security is very much front and centre for any party operating in Pakistan
The investment is significant insofar as it equates to some 20 percent of Pakistan’s annual GDP, and, once the projects are up and running, Pakistan’s place as an often-overlooked investment destination may well begin to fade. As it stands, investors favour neighbouring India ahead of Pakistan, though the proposed projects will do much to quash any qualms concerning the lesser-known nuclear power.
Inadequate electricity generation has blighted the economy in years past, and blackouts remain a constant threat. $37bn of the total will be dedicated to energy projects, which should generate an additional 16,400MW of additional power and more than double the country’s current capacity.
Add to that on-going fighting between local terror groups and the military, and security is very much front and centre for any party operating in Pakistan.
For China, the new trade routes will go some way towards lightening the load on a country for which energy imports are key. Trade between the two nations will also be made easier, with the China-Pakistan Economic Corridor meaning that transit will be both more direct and less treacherous. Ultimately, the deal constitutes one part of a much wider plan to improve trade relations with those in Asia and beyond.