Growing opportunities along China-Pakistan economic corridor

Pakistani businessman Shah Hussain recently cleared customs to ship 2,000 Chinese mobile phones through the Khunjerab Pass in west China's Xinjiang Uygur Autonomous Region.

He'll bring the China-made mobile phones back to his store in his hometown Gilgit, more than 300 kilometers from the pass. Popular with the locals for their affordable prices and long battery life, 25,000 Chinese mobile phones were sold last year at his store.

For business people like him, importing commodities from Xinjiang is safer and more convenient than from somewhere in Pakistan, "especially after China and Pakistan said to construct an economic corridor," Shah Hussain said.

The corridor he mentioned is the China-Pakistan Economic Corridor (CPEC), an important part of the China-initiated Silk Road Economic Belt. It was agreed upon by both countries in May 2013, a few months earlier than the broader economic belt.

The CPEC aims to create a 3,000-km economic corridor, a planned network of roads, railways and energy infrastructure, between the ports of Gwadar in Pakistan and Kashgar in Xinjiang, so as to help lift Pakistan out of its economic slumber and boost growth for Chinese economy.

The latest efforts took place last week at the first China-Pakistan Economic Corridor Forum in Xinjiang, with the two countries signing 20 cooperation agreements worth 10.35 billion yuan (1.6 billion U.S. dollars).

Companies have already enjoyed benefits from the economic corridor.

In April, a solar photovoltaic plant with an installed capacity of 100 megawatts, built by Tebian Electric Apparatus Stock Co., Ltd. (TBEA), went into operation in Pakistan.

Huang Hanjie, executive general manager of TBEA, said the project aims to benefit Pakistani people with green, smart and reliable technologies and services.

Also in April, State Grid Corporation, China's national electricity supplier, signed a cooperation agreement with Pakistan to fund and build a power transmission and distribution station to help ease power shortage in central and northern Pakistan.

The CPEC benefits not only regions in Pakistan but also Kashgar in China, where companies from as far as coastal areas have settled down.

Guangdong-based Sike Electronics Company established last year a subsidiary Zhanbo Electronics in Kashgar. Mainly manufacturing mobile phone chargers and cables, the plant exports 30 percent of its products to India and Pakistan.

"We were attracted by abundant labor force and preferential policies. The economic corridor will bring easier access to neighboring Pakistan, a big market to us," said Chen Dongsheng, general manager of Zhanbo.

Currently, the company has opened factories in four counties in Kashgar. It will increase production to a stable level within two years.

"With construction of pipelines, telecommunication, energy and infrastructure projects, the volume of goods transported from Kashgar to Pakistan and other neighboring countries will increase dramatically," said Yuan Youjun, general manager of Xinjiang Rundong Freight Co.

Yuan's company transported more than 40,000 tonnes of goods between China and Pakistan last year.

However, strangled by poor roads, China-Pakistan trade remains small. In 2014, trade between Pakistan and Xinjiang was 147 million U.S. dollars, far less than Xinjiang's 12.2-billion U.S. dollars with another neighbor, Kazakhstan, said He Yiming, director of the Xinjiang regional commerce department.

A lake, formed after a landslide in 2010, cut off a section of the Karakoram Highway traversing the two countries' border and affected goods and people exchanges. Pakistan has built a bridge over the lake, which allows small vehicles to pass.

"The road is expected to reopen in September," Yuan said, "at that time, the company's volume of transported goods to Pakistan will increase by 33 percent year on year."

Guo Lingzhen, deputy director of the Kashgar prefecture customs management committee told Xinhua, the economic corridor gives incentives to expand businesses and create jobs in Xinjiang and Pakistan. "The growing opportunities will attract more companies."