Chinese leader in Pakistan announces $46bn in investments

The Chinese president, Xi Jinping, is received by Pakistani president Mamnoon Hussain and prime minister Nawaz Sharif on his arrival in Rawalpindi yesterday. Mr Xi postponed a visit to Islamabad last Show more

ISLAMABAD // The Chinese president, Xi Jinping, inaugurated a US$46 billion (Dh169bn) investment plan in Pakistan on Monday at the start of his two-day visit.

Pakistan’s prime minister Nawaz Sharif and the country’s top civilian and military leadership received the visiting president at an air force base near the capital, Islamabad. Islamabad and Beijing hope the China-Pakistan Economic Corridor will transform Pakistan into a regional economic hub and bring growth to the restive western Chinese region of Xinjiang.

The corridor scheme is part of Beijing’s plan to expand its trade and transport footprint across Central and South Asia, while countering US and Indian influence.

The projected investments – $28bn of which is due to be signed during Mr Xi’s visit – dwarf a US assistance package to Pakistan of $5bn that began in 2010 but has made less impact than hoped.

They foresee the creation of road, rail and pipeline links that will connect China to the Arabian Sea, cutting several thousand kilometres off the route that transports oil from the Middle East.

Ahsan Iqbal, the minister overseeing the projects, said $11bn had been set aside for infrastructure work, while the remaining $35bn would go on energy projects. Much of the investment would be in the form of discounted loans.

After the airport reception and talks, Mr Xi and Mr Sharif symbolically broke ground on five renewable energy projects around the country via video link before overseeing the signing of more than 50 agreements.

Mr Xi said China was ready to “support Pakistan’s economic and social development”, while Mr Sharif said the corridor would make Pakistan a “regional hub and a pivot for commerce and investment”.

China and Pakistan have long maintained close political and military relations, based partly on mutual antipathy towards neighbour India.

However, stronger China-India ties have challenged that perception and Mr Xi’s visit seems intended to reassure Pakistan that relations remain robust.

Mr Xi postponed a visit to Islamabad last year because of anti-government protests and went ahead with a visit to India. China is also eager to boost trade and investment with New Delhi, and Indian prime minister Narendra Modi is expected to visit Beijing in the coming weeks. China is a leading arms supplier to Pakistan and has sought its help in combating anti-Chinese separatists reportedly hiding in the country’s lawless tribal areas. China is also eager to enlist Pakistan’s help in stabilising Afghanistan.

* Agence France-Presse and Associated Press