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BEIJING--Pakistan's President Mamnoon Hussain is looking to strike agreements with China on Wednesday for joint energy and infrastructure projects worth an estimated $20 billion, to be completed by 2018, as part of a long-term strategy to build a new trade and transport corridor between the two countries, according to a Pakistani government minister.
Mr. Hussain, who began a visit to Beijing on Tuesday, was expected to oversee the signing of memorandums of understanding on projects including upgrades of road and rail links and construction of an airport in the Chinese-built Arabian Sea port of Gwadar, said Ahsan Iqbal, Federal Minister for Planning, Development and Reform.
Chinese and Pakistani authorities had selected these as the first so-called early-harvest projects of a longer-term plan to enhance economic ties and transport links between Pakistan and China, which share a border and have had close diplomatic and defense ties for decades, largely due to their mutual distrust of India.
The long-term plan to build a China-Pakistan Economic Corridor, including an oil and gas pipeline from Gwadar to China's northwestern border, has been discussed for years, but has been repeatedly delayed by corruption, economic instability and security issues in Pakistan, analysts and diplomats say.
"In the past, the economic relationship could not match the political one. Now the leadership on both sides has realized that we have to bridge that gap," Mr. Iqbal told The Wall Street Journal in a telephone interview.
"The main idea is not just a bilateral corridor. We're seeking a much broader integration of the region. Essentially, this economic corridor will integrate a region with a population of some three billion people--about half the world."
In recent months, China has renewed its commitment to the economic corridor. Analysts say Beijing hopes the project will establish a new route for energy imports from the Middle East and help to promote economic growth in China's northwestern region of Xinjiang, home to a separatist movement among members of the mostly Muslim Uighur minority.
Chinese Foreign Ministry spokeswoman Hua Chunying told a regular briefing on Tuesday that the planned economic corridor would have a "model effect" on the region. "This project is also important for strengthening the entire communication between South Asia and East Asia, bringing economic development and improving the quality of life in the peripheries [of China and Pakistan]," she said.
Mr. Iqbal said the Pakistani government was hoping that most of the early harvest projects would be funded through private investment from Chinese companies on a build-operate-transfer basis as well as through concessional loans from China. "They're saying they'll decide what to fund on a project by project basis," he said of the Chinese authorities. "We'll complete the projects tomorrow."
The early harvest projects included construction of a motorway from the eastern Pakistani city of Lahore to the southern port of Karachi, and upgrading a stretch of road from China's border to the Pakistani capital, Islamabad, he said. Also included were plans to build an airport, a power plant and new roads in Gwadar and to upgrade rail infrastructure between Lahore and the northwestern city of Peshawar, he said.
The initial list also included investment in ongoing projects to develop the Thar coalfield and construct power plants in Gadani, in the southern province of Baluchistan, and Sahiwal, in the southern province of Sindh, he said.
He said Chinese and Pakistani authorities planned to draw up a timetable by August this year for longer term projects, which included the pipeline from Gwadar to China and a new rail link across the border.
Last year, China agreed to build two large 1,100 megawatt nuclear power plants for Pakistan in Karachi under a $9 billion deal, financed largely through a concessional loan from China.
Pakistan Aims to Sign Chinese Pacts for $20B Joint Infrastructure Projects--Update - WSJ.com
Mr. Hussain, who began a visit to Beijing on Tuesday, was expected to oversee the signing of memorandums of understanding on projects including upgrades of road and rail links and construction of an airport in the Chinese-built Arabian Sea port of Gwadar, said Ahsan Iqbal, Federal Minister for Planning, Development and Reform.
Chinese and Pakistani authorities had selected these as the first so-called early-harvest projects of a longer-term plan to enhance economic ties and transport links between Pakistan and China, which share a border and have had close diplomatic and defense ties for decades, largely due to their mutual distrust of India.
The long-term plan to build a China-Pakistan Economic Corridor, including an oil and gas pipeline from Gwadar to China's northwestern border, has been discussed for years, but has been repeatedly delayed by corruption, economic instability and security issues in Pakistan, analysts and diplomats say.
"In the past, the economic relationship could not match the political one. Now the leadership on both sides has realized that we have to bridge that gap," Mr. Iqbal told The Wall Street Journal in a telephone interview.
"The main idea is not just a bilateral corridor. We're seeking a much broader integration of the region. Essentially, this economic corridor will integrate a region with a population of some three billion people--about half the world."
In recent months, China has renewed its commitment to the economic corridor. Analysts say Beijing hopes the project will establish a new route for energy imports from the Middle East and help to promote economic growth in China's northwestern region of Xinjiang, home to a separatist movement among members of the mostly Muslim Uighur minority.
Chinese Foreign Ministry spokeswoman Hua Chunying told a regular briefing on Tuesday that the planned economic corridor would have a "model effect" on the region. "This project is also important for strengthening the entire communication between South Asia and East Asia, bringing economic development and improving the quality of life in the peripheries [of China and Pakistan]," she said.
Mr. Iqbal said the Pakistani government was hoping that most of the early harvest projects would be funded through private investment from Chinese companies on a build-operate-transfer basis as well as through concessional loans from China. "They're saying they'll decide what to fund on a project by project basis," he said of the Chinese authorities. "We'll complete the projects tomorrow."
The early harvest projects included construction of a motorway from the eastern Pakistani city of Lahore to the southern port of Karachi, and upgrading a stretch of road from China's border to the Pakistani capital, Islamabad, he said. Also included were plans to build an airport, a power plant and new roads in Gwadar and to upgrade rail infrastructure between Lahore and the northwestern city of Peshawar, he said.
The initial list also included investment in ongoing projects to develop the Thar coalfield and construct power plants in Gadani, in the southern province of Baluchistan, and Sahiwal, in the southern province of Sindh, he said.
He said Chinese and Pakistani authorities planned to draw up a timetable by August this year for longer term projects, which included the pipeline from Gwadar to China and a new rail link across the border.
Last year, China agreed to build two large 1,100 megawatt nuclear power plants for Pakistan in Karachi under a $9 billion deal, financed largely through a concessional loan from China.
Pakistan Aims to Sign Chinese Pacts for $20B Joint Infrastructure Projects--Update - WSJ.com
