China, Pakistan team up on energy

A new China-financed port on Pakistan's coast ups the ante in the new 'Great Game' for energy resources in the Middle East and Central Asia.

from the April 13, 2007 edition

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ISLAMABAD, Pakistan - If China is to become the economic powerhouse it envisions, the road to its new future could run, literally, through Pakistan.

Or so the two nations hope. Last month, they inaugurated Gwadar Port in Pakistan's Balochistan Province, the first step in an elaborate "energy corridor" that will one day ship Persian Gulf oil from Gwadar overland through Pakistan to China. China bankrolled the $200 million port and plans to put billions more into railways, roads, and pipelines linking Gwadar to China. Pakistan hopes it will generate $60 billion a year in transit fees in 20 years' time.

The deal could point to new fortunes on the horizon. But many observers wonder what price the two nations will pay for such inextricable energy ties.

Gwadar shines a spotlight on a little-studied dimension of the global showdown for the world's depleting oil. Pakistan, with Chinese money, hopes to reinvent itself as one of the region's largest energy players – but it could also become a victim of the new Great Game, some observers say, crushed in the squeeze between the American and Chinese race for influence in volatile, lucrative Central Asia.

As China positions itself as Pakistan's chief patron, that could tilt Pakistan's center of political gravity, observers add, outweighing US influence dollar for dollar – and without the strings of human rights, democracy, and counterterrorism attached.

"The Americans come with a great deal of ideological baggage. There's none of that with the Chinese," says Richard Russell, a professor of national security affairs at the National Defense University in Washington. "[Pakistan's] interactions with the Chinese are not nearly as radioactive as with the US."

Analysts have long fretted over a possible collision course between the US and China over energy. China is now the world's second-largest consumer of oil after the US. Its consumption is expected to double by 2025, with 70 percent coming from the Middle East. Both giants are competing for finite supplies.

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