China-Pakistan corridor could be a game changer if conditions are met

CHINA's pledge to invest an eye-popping US$46 billion in Pakistan mainly in infrastructure projects can be seen as potentially transformational for the troubled South Asian economy in particular, but many conditions need to be met for the reality to live up to the promise and the rhetoric.

While China and Pakistan have long been in discussions about an economic corridor to link northwest China to south Pakistan, it is now official. During his visit to Pakistan earlier this week, Chinese President Xi Jinping pledged China's support and financial backing for the mega-project, called the China-Pakistan Economic Corridor (CPEC). More than 50 agreements worth about US$28 billion were signed during Mr Xi's visit, covering mostly energy projects. Eventually, it is envisioned that the CPEC will run down the length of Pakistan, linking Kashgar in northwest China to the port of Gawadar in the southwestern Pakistani province of Balochistan.

Potentially, there could be substantial benefits for both countries. China would get direct access to a port (which it already controls) facing the Indian Ocean. This would be another route through which vital supplies, including oil, can reach China more quickly than via ports on its eastern coast and will benefit, in particular, the western provinces of Xinjiang and Tibet.