World Economy

Will Silk Route Help Boost China, Pakistan Economy?

Will Silk Route Help Boost  China, Pakistan Economy? Will Silk Route Help Boost  China, Pakistan Economy?

China is planning to revive the centuries old Silk Route, or the New Silk Road – a series of routes that were important in the past for cultural interactions and trade between the East and the West.

As part of this revival, China recently announced working on a high speed train from Lanzhou to Urumqi, capital of the troubled Xinjiang province. It is also rumored that the train may, in future, reach out to regional states including Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan, Iran and Turkey, along with further reaching out to, and concluding in, Bulgaria (Europe).

With extensive visits to Central Asian states by the Chinese president and penning a number of multibillion dollar deals with his counterparts, President Xi Jinping of China has ensured that his vision of the New Silk Road starts off on the right footing.

The progress on the project comes at an ideal phase in the Chinese economy, where the country recently surpassed the US economy in terms of its purchasing power parity (PPP). China’s PPP, in the current year, has reached a mammoth figure of $17.6 trillion or 16.48% of the world’s GDP, while the US stands at $17.4 trillion.

  Lucky Pakistan

The Silk Road Project consists of three parts. The first part starts from Xian (China) goes through Pakistan and ends in Turkey. The second strand stretches from Bangladesh to Myanmar, whereas the third aims at connecting China’s Fujian coast with the rest of the world.

Luckily for Pakistan and its economic prospects, China plans to expand one of the three Silk Route channels into Pakistan, starting from Kashgar and ending in Gwadar via Karachi.

China’s interest of including Pakistan in the project stems from its fears of any drastic US actions that could see Washington cutting of Beijing’s energy supply through various sea routes that it oversees, or controls virtually. Controlling Gwadar means that China sits right next to the Persian Gulf, one of the most important oil trade corridors in the world. Also, China, being the largest global oil importer, seems to gain a lot from a fully operational Gwadar port by cutting down thousands of miles in transportation and millions of dollars in costs.

Blueprints of the Pakistan-China Economic Corridor provide hope that the project, as well as the port, could spur economic growth in Pakistan.

India, on the other hand, has already voiced concerns over Chinese ‘ambitions’ of this new project, which it says is aimed at increasing Chinese influence both in the sea as well as on land. These concerns were put to bed by Gao Zhenting, councilor of the department of international economic affairs, who invited India to join this project citing India’s historical importance in the trade route.