The focus of spending is on building a China-Pakistan Economic Corridor (CPEC) – a network of roads, railway and pipelines between the long-time allies.
They will run some 3,000km (1,865 miles) from Gwadar in Pakistan to China’s western Xinjiang region.
The projects will give China direct access to the Indian Ocean and beyond.
This marks a major advance in China’s plans to boost its economic influence in Central and South Asia, correspondents say, and far exceeds US spending in Pakistan.
China plans to inject some $46bn – just a little less than three times the entire foreign direct investment Pakistan has received since 2008. Many say Mr Sharif’s penchant for “thinking big” and China’s increasing need to control maritime trade routes may well combine to pull off an economic miracle in Pakistan over the next four years, when Pakistani officials say most of the projects being finalised today will be well under way.
The CPEC corridor will serve as a primary gateway for trade between China and the Middle East and Africa. In particular oil from the Middle East could be offloaded at Gwadar, which is located just outside the mouth of the Persian Gulf, and transported to China through the Baluchistan province in Pakistan. Such a link would vastly cut the 12,000-kilometre route that Mideast oil supplies must now take to reach Chinese ports
Deals worth some $28bn are ready to be signed during the visit, with the rest to follow.
Under the CPEC plan, China’s government and banks will lend to Chinese companies, so they can invest in projects as commercial ventures.
A network of roads, railways and energy developments will eventually stretch some 3,000km (1,865 miles).
Some $15.5bn worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to Pakistan’s national grid, according to officials.
A $44m optical fibre cable between the two countries is also due to be built.
China will be able to reduce dependence on the Strait of Malacca for oil shipments.
The Council on Foreign Relations indicates that 60 percent of China’s imported oil comes from the Middle East, and 80 percent of that is transported to China through the Strait of Malacca, the dangerous, piracy-rife maritime route through the South China, East China, and Yellow Seas.
According to Chinese Foreign Ministry Spokesperson Hua Chunying, the corridor will “serve as a driver for connectivity between South Asia and East Asia.” Mushahid Hussain, chairman of the Pakistan-China Institute, told China Daily that the economic corridor “will play a crucial role in regional integration of the ‘Greater South Asia’, which includes China, Iran, Afghanistan, and stretches all the way to Myanmar.”
China plans to build oil storage facilities and a refinery at Gwadar Port, with oil transported to its Xinjiang Uighur Autonomous Region via road and pipeline. This will let it move energy and goods to inland China without going through the Strait of Malacca, which could be blocked by the U.S. or India should hostilities break out in the region. The project will also lead to development in western China, where tensions are simmering from activities by radical separatists.
CPEC is considered economically vital to Pakistan in helping it drive economic growth. Moody’s Investors Service has described the project as a ‘credit positive’ for Pakistan. In 2015, the agency acknowledged that much of the project’s key benefits would not materialise until 2017.
The first phase involves development at Gwadar Port and the construction of an international airport. It will be carried out by 2017, with Chinese companies expected to participate. The Karakoram Highway connecting the two countries will also be widened, while the rail network between Karachi in southern Pakistan and Peshawar in the north will be upgraded.
Part of the String of Pearls – Chinese ports across asia
The String of Pearls refers to the network of Chinese military and commercial facilities and relationships along its sea lines of communication, which extend from the Chinese mainland to Port Sudan.
China One Belt, One Road Plan
China’s one belt, one road initiative, described by Foreign Minister Wang Yi as the focus of China’s diplomacy this year, is becoming a hot topic in the international community.
It has been over a year since President Xi Jinping put forward the idea to jointly build a silk road economic belt and a 21st-century maritime silk road, during his visit to Central Asia and Southeast Asia in September and October 2013.
As its name implies, the belt and road initiative covers two major routes. The “belt” is oriented towards the land; the “road” towards the sea. The two connect the vibrant East Asian economic circle at one end with the developed European economic circle at the other, encompassing a large region with huge growth potential. More than 60 countries have already expressed a willingness to be part of the initiative. Once completed, it will enable around four billion people to live in harmony and prosperity as members of a community of shared destiny.
It is incorrect to call the initiative “China’s Marshall Plan”; for one, it is much older – the Silk Road has a history going back over 2,000 years and has been used by the peoples of many countries for friendly exchange. It is also younger – it was born in the era of globalisation and stands for win-win cooperation
SOURCES – BBC News, Wikipedia, south China Morning Post