May 9th, 2016
Courtesy of STRATFOR (subscription required), detailed analysis of the evolving China-Pakistan economic corridor:
The partnership between Pakistan and China is one of the strongest in Asia. Pakistani Prime Minister Nawaz Sharif once said that his country’s ties with Beijing are “higher than mountains” and “deeper than oceans.” In May 2015, those sentiments were given form when Chinese president Xi Jinping, on his first visit to Pakistan, signed $28 billion worth of agreements as part of the proposed $46 billion China-Pakistan Economic Corridor (CPEC). The ambitious project, which when complete would link China with two Pakistani ports, faces an array of challenges. But if completed as planned, it will help stimulate Pakistani economic growth, particularly in its more impoverished western region. It would also strengthen Chinese influence in the region and give it an export corridor to the Arabian Sea.
The two branches of the CPEC consist of a network of roads, railways, energy pipelines and other infrastructure projects that will run from the city of Kashgar in China’s western Xinjiang province through each of Pakistan’s major cities before terminating at the Arabian Sea ports of Gwadar, near Iran, and Karachi, to the east. The initiative demonstrates the expansion of the already-deep partnership between the two nations. The CPEC, which, broadly speaking, is divided into eastern and western corridors running the length of Pakistan, fits into the Chinese trade diversification strategy dubbed the Belt and Road Initiative.
The project is vital to Pakistan’s economic ambitions and could provide the basis for an economic boom. The CPEC could also help Pakistan achieve its goal of becoming a major regional energy hub connecting the Middle East, Central Asia, South Asia and China. The project would give China access to energy supply routes linking Central Asia with South Asia as well. Massive as the proposed undertaking may be, it is only one of the many ties that bind Pakistan and China. The strategic interests of both nations dictate that their relationship, especially in economic development, will only improve.
Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.