The Pak-China Economic Zone Deal is about developing a colossal economic zone in the deep sea port of Gwadar. For that purpose, Pakistan is all set to sign a lease lasting forty years with a Chinese company, China Overseas Port Holding Company (COPHC). For the purpose of developing the Pak-China Economic Zone, China will lease over 800 hectares of land at the Gwadar Port. Upon completion, it will be Pakistan’s first Free Economic Zone. The construction of Pak-China Economic Zone will cost north of $35 million. Back in the month of April 2015, China won the rights to operate Gwadar Port for a period of 40 years.
Under the China-Pak Economic Corridor (CPEC), China will invest over $46 billion, of which $786 million will be spent on several projects in Gwadar. Once functional, Gwadar port should raise heaps of benefits for both China and Pakistan. This deal will also give China access to the other Gulf countries. For those of you who don’t know, Gwadar is located within an earshot of the Gulf. That is the gateway for 20% of the world’s oil, approximately. For the development of Pak-China Economic Zone, the acquired land will be handed over to COPHC during the month of September or October upon signing the deal. For convenient commute of several Chinese engineers flying to the Gwadar Port, work on the Gwadar International Airport is also set to begin in the next couple of months.
In order to provide security for foreign engineers and workers, Pakistan is busy gathering and training a special security force, somewhere between 10,000 to 25,000 men. Free Economic Zones (FEZ), also sometimes known as free ports, are areas where companies are taxed extremely lightly or not at all. This encourages economic activity. Development of the Pak-China Economic Zone can potentially increase exports and foreign exchange earnings, generate hosts of employment opportunities and accelerate regional development. In the long-term, such economic zones could be considered a platform to make transfer of technology possible, and also develop trade linkages with several countries.
This Economic Zone is one of the biggest projects under the China-Pak Economic Corridor, and Pakistan is counting on its development to boost the economy, and slingshot the country into an era of infrastructural growth. The deal regarding the land is just the beginning, soon the construction will begin, and hopefully, Pakistan will come to realize the expectations.
What do you think of Chinese investment in Pakistan? Do you think China-Pak Economic Corridor and the Pak-China Economic Zone will change Pakistan’s future? Let us know in the comments below.You can follow us on Facebook, Twitter, or Google+ for more updates. Otherwise fill in the subscription box above, or subscribe to our RSS Feed.