China's Premier Li offers to help end Pakistan's energy crisis

ISLAMABAD (REUTERS) - China and Pakistan should make cooperation on power generation a priority, Chinese Premier Li Keqiang said, as Islamabad seeks to end an energy crisis that triggers power cuts of up to 20 hours a day, bringing the economy to a near standstill.

Mr Li arrived in the Pakistan capital on Wednesday on the second leg of his first official trip since taking office in March after a visit to Pakistan's and China's arch rival, India.

Tight security included shutting down mobile phone networks across the city.

Pakistan was one of the first countries to switch diplomatic allegiance from Taiwan to China, in 1950, and they consider each other "all-weather friends".

In an interview with Pakistan media, Mr Li said there was still "great potential" for the relationship. Bilateral trade last year rose above US$12 billion (S$15 billion) for the first time and both sides are aiming to reach US$15 billion in the next two or three years.

"Our two sides should focus on carrying out priority projects in connectivity, energy development and power generation and promoting the building of a China-Pakistan economic corridor," Mr Li said.

The power shortages have sparked violent protests and crippled key industries, costing hundreds of thousands of jobs in a country already beset by high unemployment, a failing economy, widespread poverty, sectarian bloodshed and a Taleban insurgency.

There are several joint energy and infrastructure projects under way in Pakistan and China has taken over operation of the strategically important Gwadar port.

When complete, the port, which is close to the Strait of Hormuz, a key oil shipping lane, is seen opening up an energy and trade corridor from the Gulf, across Pakistan to western China, and could be used by the Chinese Navy, upsetting India.

Mr Li this week offered India a "handshake across the Himalayas" and said the world's two most populous nations could become a new engine for the global economy - if they could avoid friction.

China and India disagree about large areas of their 4,000 km border and their troops faced off for three weeks last month on a windswept Himalayan plateau where they fought a brief but bloody war in 1962.

Pakistan and India have fought three wars, two of them over disputed Kashmir.

India has responded cautiously to Mr Li's overtures, partly because of China's friendship with Pakistan. For its part, Beijing is concerned about India's growing relations with the United States.

"I wish to reiterate solemnly China's continue firm support to Pakistan in its efforts to uphold independence, sovereignty and territorial integrity," Mr Li said in a possible reference to India and to the United States, which angers many with drone strikes targeting militants in Pakistan.

Pakistan is going through a turbulent chapter in its ties with the United States, which plans to withdraw most of its troops from neighbouring Afghanistan in 2014. Many US officials have questioned Pakistan's commitment to fighting Islamic militancy since U.S. forces tracked down and killed Osama bin Laden in a garrison town near Islamabad two years ago.

"Being a close friend of China, Pakistan wishes it well" in its attempts to address its border and security concerns, Pakistan's Nation newspaper said in an editorial.

"It is also good that Premier Li is not oblivious to the kind of ill-will resulting from the core issue of Kashmir."

In a brief security scare in southern Karachi on Tuesday, a roadside bomb exploded near the seafront which police said was likely aimed at a passing van full of Chinese port workers. No one was hurt.

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