By Usman Ahmed
The Prime Minister of Pakistan, Raja Pervaiz Ashraf, during the cabinet meeting on Wednesday, gave formal approval to a deal transferring the management of strategically located Gwadar port on the Arabian Sea, from Singapore to China.
The Gwadar Port in Pakistan’s southwestern Balochistan province is situated between South Asia, Central Asia and the Middle East. It is near the Pak-Iran border and strategic Strait of Hormuz, the gateway for about 20 percent of the world’s oil. It is also the nearest warm-water deep-sea port to the landlocked but energy-rich Central Asian republics as well as Afghanistan.
China, which has long been seeking an alternative to the Strait of Malacca, through which over 80 percent of China’s imported oil passes, financed 75 percent of the initial development cost of $248 million for Gwadar Port. To China, the port could be a conduit for energy flows into northwestern China, by transporting oil and gas from the port through pipelines that traverse Balochistan and the federal agencies to feed into China’s Xinjiang province. As China’s oil imports increase, it would prefer to insulate its energy flows from the turbulent waters of the Straits of Malacca and the South China Sea. Indian ships among others patrol the former as an anti-piracy measure. In the latter, China is involved in a territorial dispute with Vietnam and Philippines among others. In a conflict, it would be easy to shut off China’s energy supplies. But not if they can be routed through Gwadar where Pakistan Navy can also add to the security.
According to recent figures, over 60% of China’s imported oil travels through the Straits of Hormuz. Having Gwadar under its command would change the security dynamics for China. As China moves into the Indian Ocean, Gwadar port would be ideal as a staging ground for Chinese ships. China already has a steady presence in Sri Lanka’s Hambantota port, it is wooing Maldives, though no port presence is planned yet. China is also building a port in Chittagong, Bangladesh, as well as Sonadiya, near Cox’s Bazar.
The Gwadar port is currently being operated by Singapore’s PSA International, but needs further development work to become fully operational. According to PSA’s Gwadar website, there has been no ship in the port since November.
Pakistan’s Information Minister Qamar Zaman Kaira said Singapore’s PSA International could not develop or operate Gwadar “as desired” and hoped that under the new management the strategically located deep-sea port would soon contribute to Pakistan’s flagging economy. “The Chinese will make more investment to make the project operational,” Kaira said.
Responding to this major development, Chinese foreign ministry spokesman Hong Lei said on Thursday that Chinese companies have been actively involved in Pakistan’s foreign cooperation projects and China will always support projects conducive to China-Pakistan bilateral friendship and Pakistan’s development and prosperity.
Taking over Gwadar operations means that Beijing would be undertaking the biggest infrastructure project in Pakistan after it Karakorram Highway road project connecting the two countries in 1976. China will be stepping into the port located at the entrance of the Persian Gulf about 75 km east of Pakistan’s border with Iran. It also evoked apprehensions among the Indian strategic community in India as it is in the proximity of Mumbai’s port. China recently said it would construct another 20 berths at Gwadar if it was given the rights to operate the port. Beijing has been working to develop a string of harbours in the Indian Ocean and Arabian Sea, a region traditionally considered an Indian backyard.
Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said he believed that the injection of Chinese investment could soon vitalize the port with strategic importance.
“The Singapore company put more value in the commercial benefits in operating the port, but for China, its strategic values is greater than the commercial significance,” Lin said. “I do believe China will build the port at the astonishing ‘Chinese speed’ to materialize the port’s strategic values.”
Wang Weihua, a researcher on South Asia at the Shanghai Institutes for International Studies, said the Gwadar project as a port, and not as a naval base, may provide supplies for Chinese merchant ships and escort vessels, as well as serving China’s energy interests in the Middle East. He said that the transfer of the port management does not represent a threat to any country. Meanwhile, Chinese investment can help Islamabad to better develop the Baluchistan province and help boost Islamabad’s influence in the Muslim world, said Wang.
Liu Xiaoxue, a researcher on South Asia at the Chinese Academy of Social Sciences, said the port can stimulate the development of the bilateral free trade agreement, which was signed in 2006 but has not achieved as much as Islamabad expected.
“Still, it’s a little early to talk about the energy corridor as the cost of land energy transportation and risk of insecurity is still higher than maritime transportation,” Liu said.
According to defence and strategic analysts, China wants to use the port for commercial and defence purposes, which will undermine US influence in the Arabian Sea, who is already concerned about Beijing’s expanding regional influence.
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