China and Pakistan have agreed to strengthen their mining and energy cooperation, deepening their economic partnership under the China-Pakistan Economic Corridor (CPEC), part of China's Belt and Road Initiative.
Reuters states that the announcement was made during Pakistani Prime Minister Shehbaz Sharif's recent visit to Beijing, where he sought to bolster bilateral ties and economic collaboration between the two nations.
A joint statement emphasizes the nations' commitment to enhancing mining cooperation and implementing a comprehensive pact aimed at advancing mine development and industrial cooperation.
How CPEC strengthens bilateral ties on mining, oil and gas
As part of the deal, Chinese firms are expected to increase their investment in Pakistan's mining industry, focusing on the development of mining industry parks and the deep processing of ores.
Additionally, China will support Pakistan in exploring marine oil and gas resources and natural gas hydrates, encouraging Chinese companies to participate in the development of offshore oil and gas blocks in Pakistan.
This strengthened cooperation is expected to be a significant boost for Pakistan's struggling economy.
Since 2013, Chinese investment and financial support have played a crucial role in helping Pakistan manage its external financing needs, particularly through the rolling over of loans. China has invested over US$65 billion in infrastructure and development projects in Pakistan under CPEC, which is a key component of the Belt and Road Initiative.
As the first decade of CPEC concludes, both sides are committed to upgrading the project by implementing eight major steps to support high-quality Belt and Road Initiative cooperation.
This includes creating an innovative, green and open corridor aligned with Pakistan's 5Es Framework, which focuses on exports, e-Pakistan, environment, energy and equity and empowerment.
Gwadar Port, a critical node in regional connectivity, is also set to receive further development for its auxiliary infrastructure to maximize its potential as a transshipment hub with its own shipyard.
“The CPEC has been a flagship project of the Belt and Road Initiative. Over the last 10 years, it has immensely contributed to the socioeconomic development of Pakistan,” said Ashan Iqbal, Pakistani minister for planning, development and special initiatives. “Through the CPEC, Pakistan has added more than 8,000 megawatts of power to its energy grid. More than 500 kilometers of motorways and 800 kilometers of highways have been constructed,” he told the Global Times.
The enhanced cooperation under CPEC is expected to not only benefit China and Pakistan, but also positively impact neighboring regions, including Iran, Afghanistan and Central Asian republics.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.