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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"I think most security experts are looking at this very closely because this is the closest access point China has to the Persian Gulf," says Gal Luft, executive director of the Institute for the Analysis of Global Security in Washington. "I don't know that this is something the US particularly likes."

Pakistan could be crucial to China's bid for regional influence. Transporting oil is currently a long, expensive, and dangerous process for Beijing, traversing some of the most pirated seas in the world. For that reason, China is rapidly diversifying its sources, cutting billion-dollar deals from Sudan to Iran and scoping out alternative transport routes through Burma (Myanmar), Thailand, and Bangladesh.

Pakistan is likely to be among the most important routes.

Sitting at the mouth of the Persian Gulf, the Gwadar Port, which becomes fully operational next year, will provide an overland energy corridor connecting the Middle East to Xinjiang, China's future energy base. That will cut transport by 12,000 miles, shaving a month off the journey's time and 25 percent off the fees. Washington speculates that Gwadar could also be part of China's push to protect its growing energy system with a robust Navy.

For Pakistan, Gwadar is a chance to refashion itself a global energy player – a dream in the making for several decades. The potential is rich, given its prize location near the Gulf, at the feet of the energy-rich Central Asian states, and in the shadow of South and Southeast Asia, which houses a third of the world's population and where energy demands are expected to soar.

Given the energy game's high stakes, some wonder if Gwadar will set off alarm bells in Washington. Last April, while hosting the China-Pakistan Energy Forum in Pakistan, President Pervez Musharraf was asked as much by a visiting delegate. But to a roar of applause, he quickly deflected the question: "I do not care about pressure from major powers. If Pakistan suffers pressure from certain major powers, I believe China will come forward to help us apply pressure on the other side."

Still, the opening of Gwadar is indicative of how China's largesse in Pakistan is coming into open competition with the US – and how that could alter the region's political landscape.

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