Beijing lavishes aid on Pakistan fishing town

The plan is to turn Gwadar into a transshipment hub and megaport to be built alongside special economic zones. Fishermen take out their catch in Gwadar. Beijing and Islamabad see the fishing town as the future jewel in the crown of the China-Pakistan
Fishermen take out their catch in Gwadar. Beijing and Islamabad see the fishing town as the future jewel in the crown of the China-Pakistan Economic Corridor.PHOTO: REUTERS
The plan is to turn Gwadar into a transshipment hub and megaport to be built alongside special economic zones. Fishermen take out their catch in Gwadar. Beijing and Islamabad see the fishing town as the future jewel in the crown of the China-Pakistan
The plan is to turn Gwadar into a transshipment hub and megaport to be built alongside special economic zones. PHOTO: REUTERS

US, India fear massive grants and handouts aimed at serving China's military needs

GWADAR (Pakistan) • China is lavishing vast amounts of aid on a small Pakistani fishing town to win over locals and build a commercial deep-water port that the United States and India suspect may also one day serve the Chinese navy.

Beijing has built a school, sent doctors and pledged about US$500 million (S$674 million) in grants for an airport, hospital, college and badly needed water infrastructure for Gwadar, a dusty town whose harbour juts out into the Arabian Sea, overlooking some of the world's busiest oil and gas shipping lanes.

The grants include US$230 million for a new international airport, one of the largest such disbursements China has made abroad, said researchers and Pakistani officials.

The handouts for the Gwadar project is a departure from Beijing's usual approach in other countries. China has traditionally derided Western-style aid in favour of infrastructure projects for which it normally provides loans through Chinese state-owned commercial and development banks.

"The concentration of grants is quite striking," said Mr Andrew Small, an author of a book on China-Pakistan relations and a Washington-based researcher at the German Marshall Fund think tank.

"China largely doesn't do aid or grants, and when it has done them, they have tended to be modest."

Pakistan has welcomed the aid with open hands. However, Beijing's unusual largesse has also fuelled suspicions in the US and India that Gwadar is part of China's future geostrategic plans to challenge US naval dominance.

"It all suggests that Gwadar, for a lot of people in China, is not just a commercial proposition over the longer term," Mr Small said.

The Chinese Foreign Ministry did not respond to a request for comment from Reuters.

Beijing and Islamabad see Gwadar as the future jewel in the crown of the China-Pakistan Economic Corridor (CPEC), a flagship of Beijing's Belt and Road Initiative to build a new "Silk Road" of land and maritime trade routes across more than 60 countries in Asia, Europe and Africa.

The plan is to turn Gwadar into a transshipment hub and megaport to be built alongside special economic zones from which export-focused industries will ship goods worldwide.

Energy pipelines, roads and rail links will connect Gwadar to China's western regions.

Port trade is expected to grow from 1.2 million tonnes next year to 13 million tonnes by 2022, Pakistani officials say. At the harbour, three new cranes have been installed and dredging will next year deepen the port depth to 20m at five berths.

The challenges are stark. Gwadar has no access to drinking water, power blackouts are common and separatist insurgents threaten attacks against Chinese projects in Gwadar and the rest of Balochistan, a mineral-rich province that is still Pakistan's poorest region.

On top of the airport, Chinese handouts in Gwadar include US$100 million to expand a hospital by 250 beds, US$130 million towards upgrading water infrastructure, and US$10 million for a technical and vocational college, according to Pakistani government documents and officials.

"We welcome this assistance as it's changing the quality of life of the people of Gwadar for the better," said Senator Mushahid Hussain Sayed, chairman of the parliamentary committee that oversees CPEC, including Gwadar.

For its investment in Gwadar, China will receive 91 per cent of revenues until the port is returned to Pakistan in four decades' time. The operator, China Overseas Ports Holding Company, will also be exempt from major taxes for more than 20 years.

When a US Pentagon report in June suggested that Gwadar could become a military base for China, a concern that India has also expressed, Beijing dismissed the idea.

"Talk that China is building a military base in Pakistan is pure guesswork," said a Chinese Defence Ministry spokesman.

Pakistani Maritime Affairs Minister Hasil Bizenjo and other Pakistani officials say Beijing has not asked to use Gwadar for naval purposes.

"This port, they will use it mostly for their commercial interests, but it depends on the next 20 years where the world goes," Mr Bizenjo said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 18, 2017, with the headline 'Beijing lavishes aid on Pakistan fishing town'. Print Edition | Subscribe