Move will boost CPEC, 'Belt and Road' plans: experts
Chinese and Pakistani officials have laid the groundwork for a China-Pakistan free trade zone (FTZ) at the strategically important port of Gwadar in Pakistan and preliminary plans are now being finalized, according to media reports on Monday.
Specific plans for the new China-Pakistan FTZ, which will be a part of Pakistan's Gwadar Port FTZ, are still under discussion, but it will be a free port that is similar to Hong Kong, the Shanghai Securities News reported on Monday.
The report, citing unnamed sources, said that China's top economic planner, the National Development and Reform Commission (NDRC), is heading the Chinese delegation in the discussions. The NDRC did not respond to requests for comment by the Global Times as of press time.
A number of companies based in Zhuhai in South China's Guangdong Province have signed deals with the city of Gwadar worth a total of 6.5 billion yuan ($1.02 billion) to develop the port, news portal ifeng.com reported Thursday.
Specific plans might include establishing industry parks, which are effective in facilitating investment and trade, said Chen Fengying, an expert with the China Institutes of Contemporary International Relations.
"I believe that more plans will follow, and the establishment of an FTZ at the strategically import port of Gwadar is an important step," Chen told the Global Times on Monday.
Chinese firm leases FTZ land
China Overseas Ports Holding Co (COPHC) has leased over 650 acres of land in Gwadar to build and operate the FTZ, Pakistan-based newspaper The Express Tribune reported on Thursday.
That was the first part of a deal signed between the two countries, under which Pakistan will provide a total of 2,281 acres of the Gwadar FTZ to COPHC as part of a 43-year lease, according to a separate report from The Express Tribune on Wednesday.
COPHC will operate at the FTZ through three main companies - Gwadar International Terminal, Gwadar Marine Services and Gwadar Freezone Company - according to the report.
Key move for CPEC
Experts said the new developments with the Gwadar FTZ marked a milestone in the implementation phase of the China-Pakistan Economic Corridor (CPEC).
"The new developments are by far the most important step in the implementation of the CPEC," Sun Lizhou, deputy director of the Academy of the World and China Agendas, told the Global Times on Monday.
The CPEC is a major bilateral initiative to build infrastructure facilities in Pakistan that will connect the country's Arabian Sea coast with the Himalayan border with China. The initiative was unveiled during Chinese President Xi Jinping's State visit to Pakistan in April.
With low tariffs and better coordination, the Gwadar FTZ will serve as an "entry point" for Chinese companies and products to enter the country, Sun said.
Step forward for "Belt and Road"
Because of the strategic importance of the Gwadar port, the establishment of an FTZ there is also expected to have profound significance in the implementation of China's "One Belt, One Road" initiative, which will connect with Europe via Central Asia, Sun noted.
COPHC also noted the importance of the deal.
"On the shores of the Arabian Sea in the western province of Balochistan, Gwadar is strategically a well-located port to ensure increasing trade in the region," the company said in a post on its website.
Located at the mouth of the Persian Gulf, just outside the Straits of Hormuz, Gwadar is close to key shipping routes accommodating a flow of more than 17 million barrels of oil per day and a large quantity of cargo, according to COPHC.
Sun said that although shipments still go through the Strait of Hormuz, Gwadar could serve as a "back-up sea line" for China.