Pakistan turns to China for development support


Mon, Dec 09, 2013 - Page 15

Pakistan’s launch of work on its largest nuclear power plant last week is the latest example of big-money Chinese infrastructure projects in the troubled nation.

Cash-strapped Pakistan, plagued by a bloody homegrown Taliban insurgency, is battling to get its shaky economy back on track and solve a chronic energy crisis that cripples industry.

Politicians in Beijing and Islamabad are fond of extolling the profundity of their friendship in flowery rhetoric and on the ground this has translated into about 10,000 Chinese engineers and workers flocking to Pakistan.

Chinese companies are working on more than 100 major projects in energy, roads and technology, according to Pakistani officials, with an estimated US$18 billion expected to be invested in the coming years.

“Some projects are being done by the government, then most of the projects are being done by the Chinese companies, by the provinces and also with the state enterprises and authorities,” Pakistani Minister for Planning and Development Ahsan Iqbal said.

“In the energy sector, Chinese engineers are building up to 15 power projects that include hydel [hydroelectric], thermal and nuclear plants,” he added.

Pakistan faces an electricity shortfall of about 4,000 megawatts (MW) in the sweltering summer, leading to lengthy blackouts that make ordinary people’s lives a misery and have strangled economic growth.

To combat the crisis, Pakistan has sought Chinese help in building power generation projects across the country, including nuclear.

Aside from the 2,200MW project near Karachi launched by Pakistani Prime Minister Nawaz Sharif last week, Chinese companies built two of Pakistan’s three operational reactors.

Chinese engineers are also busy in the construction of a 969MW hydropower project in Kashmir.

They have also committed to generate 6,000MW of electricity from coal and wind in southern Sindh Province.

However, cooperation goes beyond energy. Visiting in May during his first overseas trip after taking office, Chinese Premier Li Keqiang (李克強) linked growth in his country’s restive west with that in Pakistan, saying the two sides wanted to create an “economic corridor” to boost development.

The concept involves improving road and rail networks to link China through Pakistan to the Arabian Sea and Iqbal said its benefits would extend to other neighboring countries.

In January the Pakistani Cabinet approved the transfer of Gwadar Port, strategically located in the country’s far southwest, to a Chinese state-owned company.

Once the road network is improved, Gwadar is to slash thousands of kilometers off the distance oil and gas imports from Africa and the Middle East have to be transported to reach China.

The bloody six-year Taliban insurgency and threat of expatriate workers being kidnapped and beheaded by militants has made many foreign firms wary of investing in Pakistan.

“Pakistani people are very friendly with Chinese. That is why I am here since last three years and I will spend some more years over here,” said Wang Yanjun, supervising a road-building project in Muzaffarabad, the main town in Pakistani Kashmir.

Wang Yanjun’s company, China Xinjiang Beixin (中國新疆北新), has already worked on projects in Pakistan ranging from roads to airports.

Another engineer, Wang Songqiang of China International Water and Electric Corp (中國水利電力), is looking after the construction of a shopping center in Muzaffarabad.

Pakistan and China presently have annual bilateral trade of about US$12 billion and are trying to take it to US$15 billion in the next three years, though Iqbal said Sharif is dreaming of doubling this volume.

For China, investing in Pakistan’s crumbling infrastructure is a chance to boost trade, but also about using its southwestern neighbor’s workforce as it seeks to keep prices down while satisfying growing domestic demand.