Pakistan’s Gwadar port was heralded as the next Singapore when it opened for business more than a decade ago. But the China-funded site has failed to emerge as a commercial hub, underscored by a brand-new international airport that sits nearly empty.

Now, the city surrounding its underused deep-water port — a cornerstone of the $50 billion China-Pakistan Economic Corridor — is playing host to an unusual new business, which has quickly become the butt of jokes among locals who have yet to see Gwadar live up to its five-star billing.

This month, China’s Hangeng Trade Company swung open the doors to a $7 million donkey slaughterhouse that will supply skins critical to making ejiao, a traditional Chinese medicine promoted as a way to enrich blood, boost the immune system and even prevent cancer.

The company couldn’t be reached for comment. But Pakistani officials familiar with the deal said the business is to supply more than 300,000 donkey hides a year to feed an estimated $8 billion annual ejiao market in China, Pakistan’s top international investor.

“One thousand donkeys have to be exported daily from the slaughterhouse,” said one official, speaking on condition of anonymity.

The new business was confirmed at a meeting of Pakistan’s Standing Committee on National Food Security and Research earlier this month.

The Chinese company has struck deals with several donkey breeding farms in Pakistan’s Punjab and Sindh provinces, which will provide the animals for slaughter in Gwadar before their skins are exported, according to the officials. Gelatin in donkey hides is a key ingredient in ejiao.

The business plan is all the more unusual since slaughtering donkeys is taboo in Muslim-majority Pakistan, where they’re primarily used for transport in rural areas.

And there are concerns that the ejiao market threatens the global donkey population, according to a 2023 report by the U.S. Congressional Research Service.

Last year, the African Union banned the sale of donkey skins with the continent home to about two-thirds of the world’s donkeys.

“Multiple slaughterhouses have filed applications with the government and if they are allowed to operate and export to China, then it will make donkeys extinct in Pakistan for sure,” a local official told Nikkei Asia.

The Gwadar business is the first to get the green light to slaughter donkeys in Pakistan, which has previously busted gangs smuggling their skins out of the country.

Islamic leaders aren’t thrilled given the religious prohibition on donkey meat.

“Some religious figures in Gwadar are opposing the slaughterhouse but it has not become a prominent issue so far due to other major problems in Gwadar related to infrastructure and underdevelopment,” said Nasir Sohrabi, president of the Rural Community Development Council of Gwadar.

City officials are making efforts to turn the southwestern region into a tourist draw. But with economic progress stumbling — and residents suffering frequent power outages — it looks unlikely that anyone will block Gwadar’s donkey plant.

“[This] is the only business making sense in Gwadar” right now, said Muhammad Shoaib, a postdoctoral fellow at U.S.-based George Mason University who researches China.

“Symbolically, [the slaughterhouse] will draw a negative reaction in Pakistan. It will be very difficult to convince Pakistanis that it is even a proper business,” he told Nikkei.

That seems clear as the venture has become the theme of a local wisecrack.

“Gwadar’s port didn’t work and the airport didn’t take off, so now they’re putting all their bets on donkeys,” goes the gag. “At least this time, they’re not aiming too high.”