Chinese President Xi Jinping will launch energy and infrastructure projects worth $46 billion on a visit to Pakistan next week as China cements links with its old ally and generates opportunities for firms hit by slack growth at home.
Also being finalised is a long-discussed plan to sell Pakistan eight Chinese submarines. The deal, worth between $4 billion and $5 billion, according to media reports, may be among those signed on the trip.
Commercial and defense ties are drawing together the two countries, which share a remote border and long-standing mistrust of their increasingly powerful neighbor, India, and many Western nations.
“China treats us as a friend, an ally, a partner and above all an equal – not how the Americans and others do,” said Mushahid Hussain Sayed, chairman of the Pakistan parliament’s defense committee.
Pakistan and China often boast of being “iron brothers” and two-way trade grew to $10 billion last year from $4 billion in 2007, Pakistani data shows.
Xi’s trip is expected to focus on a Pakistan-China Economic Corridor, a planned $46-billion network of roads, railways and energy projects linking Pakistan’s deepwater Gwadar port on the Arabian Sea with China’s far-western Xinjiang region.
It would shorten the route for China’s energy imports, bypassing the Straits of Malacca between Malaysia and Indonesia, a bottleneck at risk of blockade in wartime. If the submarine deal is signed, China may also offer Pakistan concessions on building a refueling and mechanical station in Gwadar, a defense analyst said.
China’s own submarines could use the station to extend their range in the Indian Ocean. “China is thinking in terms of a maritime silk road now, something to connect the Indian Ocean and Pacific Ocean,” said a Pakistani defense official, who declined to be identified.
For Pakistan, the corridor is a cheap way to develop its violence-plagued and poverty-stricken Baluchistan province, home to Gwadar.
China has promised to invest about $34 billion in energy projects and nearly $12 billion in infrastructure.
Xi is also likely to raise fears that Muslim separatists from Xinjiang are linking up with Pakistani militants, and he could also push for closer efforts for a more stable Afghanistan. “One of China’s top priorities on this trip will be to discuss Xinjiang,” said a Western diplomat in Beijing. “China is very worried about the security situation there.”