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Posts Tagged ‘State-owned Assets Supervision and Administration Commission

Great Game – the Karakoram Corridor

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The Jamestown Foundation’s China Brief provides more input to the new Great Game theme.Writing in the latest China Brief is Vijay Sakhuja who describes the Karakoram Highway and its importance to China.

In China’s quest to secure raw materials, resources and markets, writes Sakhuja, Beijing has laid out a sophisticated blueprint to develop a region-wide transit corridor throughout the subcontinent. In the Himalayas, it has built rail, road and air networks that can support the Chinese military’s logistic supply chains and showcase its capability to overcome the tyranny of geography.

The transportation network through the Karakoram mountain range is particularly noteworthy. Notably, the corridor provides Chinese access to Pakistan that can be extended in the future to provide connectivity to the Indian Ocean and to the energy rich Persian Gulf, particularly Iran. Furthermore, the modernization of the regional transit infrastructure will be conducive to stronger connectivity between South Asia and the Central Asian Republics, yet at the same time it will expose China’s borders to the region’s growing security challenges.

The 1,300 kilometer-Karakoram Highway (National Highway 35 or N35), also dubbed “Friendship Highway,” links Islamabad with Kashgar in Xinjiang. It is the highest metalled road in the world and it took nearly two decades to build. In 2006, Pakistan Highway Administration and China’s State-owned Assets Supervision and Administration Commission (SASAC) agreed to widen the highway from 10 to 30 meters and upgrade it to make it accessible by motor vehicles during extreme weather conditions. China completed the widening of the highway on its side but Pakistan could not raise the funds, which delayed the project. As a result, China agreed to give Pakistan a soft loan for the project.

Main pier at Gwadar port. Satellite image from Google Earth

The joint China-Pakistan project to link Kashgar in Xinjiang to Havelian near Rawalpindi in Pakistan through the Khunjerab Pass in the Karakoram Range through a rail corridor is indeed ambitious. It has been noted that the rail track running nearly 700 kilometers “will transform the geopolitics of western China and the subcontinent”.

At the southern end of the Karakoram corridor is the Gwadar port on the Arabian Sea. The port offers several strategic advantages to China. In economic terms, it can potentially link Xinjiang to the global trading system through the Karakoram Highway.

Pakistan has urged China to use and “take maximum benefits from the Gwadar port”. The Gwadar port was built with Chinese financial assistance (80% of its initial US$248 million development costs) and was offered to the Ports of Singapore Authority (PSA) to conduct shipping operations in February 2007 for 40 years.