Pakistan port integral to China maritime expansion

The Pakistani cabinet on Jan. 30 approved the transfer of Gwadar port, a commercial failure cut off from the national road network, from Singapore's PSA International to the state-owned China Overseas Port Holdings Limited.

The Pakistanis pitched the deal as an energy and trade corridor that would connect China to the Arabian Sea and Strait of Hormuz, a gateway for a third of the world's traded oil, overland through an expanded Karakoram Highway.

Experts say it would slash thousands of kilometers off the distance oil and gas imports from Africa and the Middle East have to be transported to reach China, making Gwadar a potentially vital link in its supply chain.

China paid about 75 percent of the initial US$250 million used to build the port, but in 2007 PSA International won a 40-year lease with then-ruler Pervez Musharraf who was reportedly unwilling to upset Washington by giving it to the Chinese.

Although it may take up to a year for the deal to be signed, Gwadar would be the most westerly in a string of Chinese-funded ports encircling its big regional rival, India, which was quick to express concern over the impending transfer.

In Nepal, China is building a US$14 million “dry port” at Larcha, near the Tibet border, along with five other ports and and is upgrading transport links with an eye to the huge Indian market.

In Bangladesh, China is one of four countries, including India, Japan and the United States, interested in building a US$5 billion deep-sea port at Sonadia island in the Bay of Bengal, according to the shipping ministry.

Sri Lanka in June 2012 opened a new US$450 million deep-sea port at Hambantota, close to the vital east-west sea route used by around 300 ships a day, built with Chinese loans and construction expertise.

Although China has no equity stake in Hambantota, they have taken up an 85-percent slice of Colombo International Container Terminals Limited, which is building a new container port adjoining the existing Colombo harbor.

Beijing is also a key backer of a port and energy pipeline in Myanmar that will transport gas pumped offshore and oil shipped from Africa and the Middle East to China's Yunnan province, due to be finished by the end of May.

The ports were dubbed China's “string of pearls” — or potential naval bases similar to those of the United States — in a 2004 report for the Pentagon.

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