Gwadar Port Turns to be a Headache for China and Pakistan

As part of CCP’s ambitious Belt Road Initiative (BRI) and considered a link between China's One Belt, One Road project, the ongoing over USD 60 billion China-Pakistan Economic Corridor (CPEC) project is likely to become a security and economic headache for both China and Pakistan.

According to the Centre for Advanced Defence Studies (C4ADS) report, Pakistan's rising debt is imperilling the country's long-term economic viability, and China's sunk costs in infrastructure assets and personnel on the ground are drawing Beijing deeper into Pakistan's internal security concerns.

The so-called Gwadar Port, branded and promoted as a signature China-Pakistan development model that will eventually be built into an "industrial powerhouse" with planned manufacturing facilities, a free trade zone, and a liquified natural gas (LNG) terminal, is no wonder turning out to be unprofitable, with a ship berthing average of one and a-half per month.

Adding to the surprising fact that China gets to retain 91% of the port's profits, financial and lease control of this port for the next 40 years remains with the state-owned China Overseas Ports Holding Co. Ltd.

The report further states that Gwadar port is potentially below ground for commercial activities. The port relies primarily on transshipment rather than import or export routes, with only an estimated 200 ships calling in on the port between 2008 and 2017.

The corridor, which came into operation in November 2016, passes through Gilgit-Baltistan in Pakistan-occupied Kashmir, which is actually the territory of India. Through the years, India has opposed this matter to the fullest.

Currently, the road from China to Pakistan begins with the Karakoram Highway, one of the world's most dangerous mountain passes. A route that is regularly closed for snow during several months each year. Due to this, much of the trade then passes through areas of sovereign territorial disputes and insurgency.

In Balochistan, where Gwadar is located, attacks by civilians on CPEC projects have killed 44 workers and injured over 100 from 2014 to 2016. As soon as the goods arrive at Pakistani ports, they typically incur higher dock charges and longer wait times than they would at regional competitors.

Pakistan's other concern is the huge number of Chinese entering their country for work. According to the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), roughly 2,50,000 Chinese expatriates arrive in Pakistan each year for work.

The increasing numbers of Chinese citizens and other interests on the ground play a direct role in Pakistan's internal security.

Also, the limited transparency on CPEC-related investments also puts a cloud over how much Pakistan will eventually benefit.

Thus, it is evident that CPEC projects like Gwadar will disproportionately favour China while unfavourably burdening Pakistan in the long term.

Report by



Shomen Chandra
Intern, The Narrative