Gwadar will soon become international trading hub


There is no threat to China Pakistan Economic Corridor. Very soon Gwadar Port is close to becoming an international trading hub.

Law and order situation in Balochistan has improved considerably.
Around 10,000 Chinese nationals are working on CPEC and China is satisfied with the measures taken by Pakistan for their protection.

China is desirous of good relations between the two countries and is making efforts for reconciliation process in Afghanistan.

China has time and again requested the Taliban to take part in negotiations.
Pakistan and China inked five Agreements and a Memorandum of Understanding for strengthening collaboration between Gwadar and the Chinese port cities.

On the sidelines of the sixth Heart of Asia Conference-Istanbul Process in Amritsar, India, Afghanistan and India planned to start air cargo transportation over Pakistan.

The move will help greatly in exporting Afghan goods, such as fruits and carpets, to India and allowing Indian medicines to be imported to Afghanistan.

The air cargo deal comes after Afghanistan and India, along with Iran, signed the Chabahar transport and transit agreement in Tehran.

Both India and Pakistan are overestimating the potential of the Chabahar port and often frame it as the main rival to the China-Pakistan Economic Corridor (CPEC), which is anchored by Gwadar port in Pakistan. For Kabul, the Chabahar agreement was a sigh of relief.

Afghanistan is no longer dependent on Pakistan for its transit and trade with India and the rest of the world.

It has diversified transit routes options for Kabul, giving an end to the Pakistani transit route’s monopoly.

Despite open concerns government’s top officials have expressed their support for Chabahar and labeled Chabahar and Gwadar as “sister ports.”

The government has also spoken about the chances to link Gwadar with Chabahar and build a motorway between Peshawar and Chabahar.

From the Chinese point of view Chabahar and CPEC (including Gwadar port) are complementary projects and will benefit China.

The geopolitical and economic importance of the Chinese projects mainly depends on the health of regional infrastructure as a whole.

Chabahar will improve infrastructure in Iran and Afghanistan, which will then indirectly boost Chinese projects.

China welcomes interconnectivity in the region and it welcomes Chabahar port.
Chabahar will help China because the region is infrastructure poor and any improvement in infrastructures in the region will automatically boost OBOR.

Despite both being transit and deep sea ports, there is a big difference between Gwadar and Chabahar that must be taken into consideration.

The underlying goal behind CPEC is to develop China’s western provinces.
It is economically to have a transit route via Pakistan to not only import energy to western Chinese regions but also export western Chinese products to the Middle East and to the rest of world through Pakistan.

Beijing will cut the time and cost needed to reach the sea.
China’s western provinces are farther from the Chinese coast lines than Pakistani ports such as Gwadar and Karachi.

This Chinese initiative to develop its western provinces is a step toward balanced growth, which is seen as a necessary step in fighting against terrorism, separatism, and extremism in the country.

The EU has been China’s largest trade partner since 2004, with bilateral trade touching $559.1 billion in 2013.

China had bilateral trade of $50.2 billion with Central Asia republics, up from $460 million in 1992, when Central Asian republics declared independence from the former Soviet Union.

Beijing’s bilateral trade with Gulf Cooperation Council states (Saudi Arabia, United Arab Emirates, Qatar, Bahrain, and Oman) in 2012 was $155 billion and will further increase if a free trade agreement between these two partners is signed.

China is dependent on the Middle East, Central Asia, and Russia for its energy resources.
It will further enhance energy and trade relations with these regions.

Chabahar will not affect China’s ability to achieve these goals, and so will not derail CPEC.
Chabahar port is “transit trade” with Central Asian republics and Afghanistan.

It is neither an alternative route to Chinese transit through Pakistan and nor a substitute for Chinese investments in Pakistan.

Afghanistan supports the China-Pakistan Economic Corridor. Afghanistan is ready to facilitate the linking of Central Asian countries with the corridor.

Iran also wants to connect CPEC and Gwadar and Chabahar. Chabahar will line up in direct competition with the Chinese project.

The rivalry between Chabahar and Gwadar pose that the probability of a Chinese and Indian military especially navy presence in these ports will increase Sino-Indian rivalry in the Indian Ocean.

There is an expectation that Chabahar port will diminish the importance of Gwadar port the end of CPEC as a transit hub and route for Central Asian republics and Afghanistan.

Iran, for her part, may not agree to allow India to use Chabahar for military purposes.
Iran may not want to enter into the Sino-Indian strategic rivalry. Sino- Bilateral trade between India-Iran is $14 billion, compared to $51.8 billion between China and Iran.

The close ties between the United States and India will influence Iranian strategic thinkers.
It is unlikely that Iran will allow its ports to be used militarily by Indians against China as Tehran considers the Indo-U.S. alliance in the Indian Ocean as against its own interests.

In order to avoid Chinese and Pakistani misunderstanding, the Iranian envoy to Pakistan has already invited both Pakistan and China to be a part of the Chabahar accord.
Pakistan will soon enter into a quadrilateral transit agreement with Central Asian republics and China.

Thus Pakistan will bypass Afghanistan and reach Central Asian republics through China and CPEC.

Afghanistan’s top 10 trading partners through the Afghanistan-Pakistan Transit Trade Agreement are, in order of trade volume.

China, United States, Malaysia, Indonesia, India, UAE, Kenya, Vietnam, Hong Kong, and South Korea.

In 2012, 2013 and 2014, 33 percent of total Afghan imports through APTTA were solely Chinese imports to Afghanistan, which made China Afghanistan’s top trading partner through APTTA.

Afghanistan’s trade with China will continue to mostly depend on Pakistan and CPEC.

The construction of the Gwadar port is an important component of Pakistan’s overall initiative to facilitate trade with the landlocked states of Central Asia.