Economic Corridor to boost Sino-Pak trade

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Observer Report

Islamabad

The Xinjiang government has decided to invest more than 170 billion yuan ($24.72 billion) in a road network between China and Pakistan to improve transportation capability.
The China-Pakistan Economic Corridor (CPEC) is expected to improve overland trade between China and Pakistan, which accounts for two percent of the overall trade between the two countries, an article in the leading Chinese daily ‘Global Times’ opined while highlighting the future trade prospects of CPEC.
The article noted that for the first time, the residents of Northwest China’s Xinjiang Uyghur Autonomous Region were able to eat seafood imported from Pakistan by container cars through the Khunjerab Pass in January, this year.
The first batch seafood shipped by container cars arrived in the region on January 13, marking the first time that ªTaxkorgan Tajik Autonomous county, Kashgar prefecture, has received imported seafood.
“We imported 7.46 tons of seafood, including prawns, cuttlefish and squid, worth $26,700. It was sold mainly in western China,” Chen Hai’ou, president of Kashgar Mufeng Biotechnology Co., was quoted as saying by the same article.
The frozen seafood was shipped from the port of Karachi in southern Pakistan to the port of Sost in northern Pakistan, and then transported to China via the Karakoram Highway.
The highway, also known as China-Pakistan Friendship Highway, which connects Xinjiang and northern Pakistan, stretches more than 1,000 kilometers across the Karakoram, Himalayas and Hindu Kush mountains.
Chen said that the container cars started from Pakistan in November 2016 and entered the Khunjerab Pass before the Karakoram Highway closed for the winter. The closure lasts from December to April each year.
This trial shipment is meaningful because it illustrates the growth of overland trade between the two countries since the highway was rebuilt and extended in 2013, said Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.
The highway greatly reduced the transnational transportation time. “It used to take 30 to 40 days to ship goods to Xinjiang [from Pakistan], but we can now receive goods in about 10 days through the China-Pakistan Economic Corridor (CPEC),” Chen told the Global Times.
It was also 10 percent cheaper than transporting seafood from coastal cities in China, Chen noted. Chinese Premier Li Keqiang proposed the 3,000- kilometer CPEC, which links Xinjiang and Pakistan’s Gwadar port, during his visit to Pakistan in May 2013.
As part of China’s “One Belt and One Road” initiative, the project aims to strengthen economic cooperation in transportation, energy and other industries.The first shipment of seafood imported via the overland channel will invigorate bilateral trade and will have a demonstration effect on other companies, said Cao Lei, chief of Khunjerab Pass.
Pakistan doesn’t consume a lot of seafood and its seafood resources remain well preserved, it is likely to boost overland shipments to Xinjiang, Cui told the Chinese daily. Currently, 98 percent of trade between the two countries is by sea, Cao was quoted as saying in a report of domestic news portal chinanews.com on February 4. Bilateral trade across Khunjerab Pass accounts for the remaining two percent.
For their part, Chinese companies will likely increase overland exports of large mechanical equipment and construction materials such as cement and steel to Pakistan as they contract more infrastructure projects under the CPEC, Zhou said.
In addition, the CPEC has made it more convenient for domestic companies to transport goods to Pakistan, where they can arrive in the northern city of Sost, he said. In the past, containers were shipped through the port of Karachi, where they had to go through customs.
Chen is also optimistic about the prospects that the CPEC will revitalize overland trade. “Besides seafood, we will import fruit and other agricultural products in line with domestic needs,” he said, noting he is discussing importing fruit with Pakistani companies.
Eddie Wong, CEO of Shenzhen Hezhengyuan Group, the parent company of KashgarMufengBiotechnology Co, told the Global Times that the company will continue to import cotton and sugar in the second phase.
This year, the region will invest 170 billion yuan ($24.72 billion) in building new roads, 8.1 billion yuan into railway construction and 4.8 billion yuan in civil aviation projects, the report said, noting the total will surpass the combined investment in transportation infrastructure from 2011 to 2015.