ISLAMABAD: Chinese President Xi Jinping arrived in Islamabad Monday to unveil a $46 billion investment plan that Pakistan hopes will end a chronic energy crisis and transform it into a regional economic hub.
With the plan, known as the China Pakistan Economic Corridor (CPEC), Beijing hopes to increase investment in Pakistan as part of its ambitions to expand its trade and transport footprint across Central and South Asia, while countering US and Indian influence.
Pakistan, a Muslim-majority country of 200 million that has been battling an Islamist insurgency for over a decade, hopes the investment will spur its long-underperforming economy, which the IMF projects to grow 4.3 percent this year.
Xi was given a lavish welcome as he arrived on Monday morning at Nur Khan air base in Rawalpindi, next to Islamabad, where he was greeted by President Mamnoon Hussain and Prime Minister Nawaz Sharif.
The two allies have enjoyed close diplomatic and military relations for decades, though economic ties have only grown more recently. Bilateral trade crossed $12 billion last year compared to only $2 billion a decade earlier.
“The real opportunity of this China Pakistan Economic Corridor is that it changes the scope of the relationship from geopolitics to geoeconomics,” Ahsan Iqbal, the minister overseeing the projects, told AFP.
The project foresees the creation of road, rail and pipeline links that will cut several thousand ki-lometers off the route to transport oil from the Middle East to China, while bypassing mutual rival India.
The upgrade will stretch 3,000 kilometers (1,860 miles) from the Pakistani port of Gwadar on the Arabian Sea to China’s western city of Kashgar.
Pakistan transferred control of the port to a Chinese public company in 2013. Iqbal said $11 billion has been set aside for the corridor.
The two countries are also set to cooperate in gas, coal and solar energy projects to provide 16,400 megawatts of electricity—roughly equivalent to the country’s entire current capacity, said Iqbal.
Pakistan has wrestled with chronic power shortages in recent years that have scrubbed several points off GDP growth and inflicted misery on the everyday lives of its citizens.