The importance and significance of Gwadar and its port

Pakistan’s third deep-sea port at Gwadar has caught the attention of the world, and is set to make a huge impact in the country’s economy. The port which was constructed and operational in 2007 was handed over to the Port of Singapore Authority. The port however was severely mishandled and was largely neglected, with hardly any development.

But in 2013 the port was handed over to China Overseas Port Handling Company (COPHC), and that is when a series of development were started in the area. Then with the CPEC project being announced the significance of the port increased even more. It is now Pakistan’s most prized and valued venture for numerous reasons.

- Gwadar Port is warm water deep-sea port which will be able to cater to large container ship, all year round.

- China has already constructed the first phase of the Gwadar port at cost of $248 million, and has already started on the second phase which will introduce massive upgrades at cost of $1.6 billion.

- The Gwadar Port is also being built to promote Pakistan at a social level and to revive tourism in the country.

- The Port and the CPEC project are set to eradicate unemployment and offer more than 100,000 jobs in all of Pakistan.

- Gwadar port will be the center of three major trading locations, which are Central Asian, Gulf States and South Asian nations.

- Giant Pakistani companies have invested in Gwadar property which will plan to build various commercial buildings in the city.

Gwadar is supremely located on the western side of the coast of Baluchistan and is on the opposite end of the Gulf of Oman which is a permanent and important course for transporting large number of oil tankers, to the western and eastern countries.

Pakistan will most likely receive overflowing amount of trading goods from China and Central Asia, and they will make their way to Gwadar which will be the main overland trading route. Pakistan could potentially earn huge amounts from handling various payloads, maintaining and re-fueling tankers, imposing charges for trading and cargos. Due to these numerous reasons many global investors are interested in land for sale in Gwadar, with plans to build this city into Pakistan’s next business center.

The Bilateral Relationship of China in global trading and economics

The China Pakistan Economic Corridor (CPEC) is a multi-billion dollar venture which has the potential to change Pakistan’s fate, and can set the country on a course of advancement. It has the potential toenhance the crippling economy and trading; improve Pakistan’sregional activities and connections.

The various energy projects that are to be built under CPEC will also resolve the energy crises that Pakistan has been facing. The province of Baluchistan is also planned to go through a lot of development, in terms of infrastructure and road networks. In fact some of the projects have already started, and started increasing the value of land for sale in Gwadar. In any case, now, China is assuming a central trading role not only in whole of Asia, but the whole world. Having the biggest population in the world, China is also rapidly becoming the world’s biggest economy as well.

So the main objective of China and Pakistan are focusing their combined efforts to re-establish the Old Silk road, which is one the most notable old trade routes, which will run from Gwadar (Pakistan) to Kashgar (China).

China’s CPEC project plays part in even a bigger project known as the ‘One Belt One Road’, this project has a total net value of $ 21 trillion, and through this China has wishes to connect various countries and regions. This way Pakistan will also participate in this global scheme and will have new trading markets.

China-Pakistan Bilateral Trading& Economic ties:

Over the year both countries have made strong ties, and have established bilateral economic and trading ties. Pakistan and China have been cooperating over the years in many fields with each other. China is in fact one of Pakistan’s biggest partner for the exporting and importing of goods.

Now the CPEC project will maximize the trade in the country and expand sustainable development scope of Pakistan. The various investments being made by China will increase the $ 247 billion GDP of Pakistan by at least 15%. This will prove to be very advantageous for Pakistan in the future.

Implications of Gwadar’s port and the CPEC

Pakistan’s third deep-sea port at Gwadar has caught the attention of the world, and is set to make a huge impact in the country’s economy. The port which was constructed and operational in 2007 was handed over to the Port of Singapore Authority. The port however was severely mishandled and was largely neglected, with hardly any development.

But in 2013 the port was handed over to China Overseas Port Handling Company (COPHC), and that is when a series of development were started in the area. Then with the CPEC project being announced the significance of the port increased even more. It is now Pakistan’s most prized and valued venture for numerous reasons.

1- Gwadar Port is warm water deep-sea port which will be able to cater to large container ship, all year round.

2- China has already constructed the first phase of the Gwadar port at cost of $248 million, and has already started on the second phase which will introduce massive upgrades at cost of $1.6 billion.

3- The Gwadar Port is also being built to promote Pakistan at a social level and to revive tourism in the country.

4- The Port and the CPEC project are set to eradicate unemployment and offer more than 100,000 jobs in all of Pakistan.

5- Gwadar port will be the center of three major trading locations, which are Central Asian, Gulf States and South Asian nations.

6- Giant Pakistani companies have invested in Gwadar property which will plan to build various commercial buildings in the city.

Gwadar is supremely located on the western side of the coast of Baluchistan and is on the opposite end of the Gulf of Oman which is a permanent and important course for transporting large number of oil tankers, to the western and eastern countries.

Pakistan will most likely receive overflowing amount of trading goods from China and Central Asia, and they will make their way to Gwadar which will be main overland trading route. Pakistan could potentially earn huge amounts from handling various payloads, maintaining and re-fueling tankers, imposing charges for trading and cargos. Due to these numerous reasons many global investors are interested in land for sale in Gwadar, with plans to build this city into Pakistan’s next business center.

How will government incentives and exempts promote growth in Gwadar and its port?

The governments of China and Pakistan are working tirelessly to develop Pakistan’s third deep-sea port at Gwadar and to expand its operations to make it a port of international standards.

The Government has likewise taken a step to make Gwadar port duty free port in order to attract more investors and traders. This will create new opportunities and establish a firm foundation for the shipping industry at Gwadar.

The Gwadar port is being built to accommodate plenty of imports and exports, so that it may become a trading hub in the region. The Gwadar port will also have transit trading cargo facilities for other countries that may center their trading activities here, and so the government will also offer huge cuts in dues pertaining to the use of the port.

Pakistan is offering huge exemptions and incentives that will promote the growth of business in the city and the port. Some of the exempts are on:

1- General sales taxation

2- Withholding tax on the importing of ships and other sea vehicles

3- Custom tax on trading goods

4- Minimal taxation on trading

As Pakistan’s shipping sector is quite underwhelming compared to other countries in the region, these exempts and incentives will surely attract global and local investors. Previously the private sector had little participation in Pakistan Sea trading and shipping industry but analysts believe that this situation may change. In fact, investors have already started entering in Gwadar’s market, investing in assets like land which led to an increase in Gwadar property prices.

The inception of China Pakistan Economic Corridor (CPEC) project will also greatly boost the trading activities as once completed; Pakistan will receive huge amounts investment from countries such as China. The Chinese who’ll utilize Gwadar port will bring in an industrial revolution and invest in the form of machinery, personnel and easy loans that’ll transform the city of Gwadar into a mega city which will be an economic and cultural hub. Luxurious housing schemes like Gwadar Central are building up the residential sector of the city that will soon cater to the large population of civilians.  

How has Gwadar Port and CPEC Helped in Increasing Pakistan’s Growth Rate?

Pakistan’s latest and biggest venture China Pakistan Economic Corridor (CPEC) has started an era of economic growth and progress in Pakistan. China is now investing huge amounts of resources worth billions in the CPEC project.

Gwadar port has central importance in this multibillion-dollar project. The port which is now being built and supervised by the COPHC will play a huge role in making the CPEC project successful and will also be responsible for the socio-economic development of the Baluchistan province and ultimately Pakistan. Many infrastructural projects like Gwadar east-bay expressway and the New Gwadar International Airport are being built on a priority basis and will soon be operational. These infrastructural advancements are necessary for the growth of Gwadar itself. Several other subprojects under CPEC are also contributing to the advancement on a provincial level.

Due to the CPEC project, experts believe that there would be over 500,000 different kinds of jobs created all over Pakistan, though a major concentration will be present in Gwadar. This will also amplify the country’s GDP growth rate by adding another 2.5% points to the current GDP growth which is 5%.

Having a GDP of 7.5% and being a future trading hub would further increase the importance of Gwadar city and expand the operation and activity at its port. Private projects in the residential and commercial sectors of Gwadar would make the city habitable and provide its residents with basic necessities. The desalination plant and various energy projects that will provide over 10,000 MW of energy are being built to facilitate the population residing in Gwadar. The government has also offered local and global investors land for sale in Gwadar.

Luxurious housing schemes which are being supervised by the Gwadar Development Authority are built by various private Real Estate companies, that aim to transform Gwadar into culturally and socially advanced city. These advancements made Gwadar a very profitable city to invest; many people saw this as a golden opportunity and invested in land thus raising the value of Gwadar property prices.

How will CPEC and Gwadar Port boost the trading exports and local industries of Pakistan?

For many years the economy of Pakistan was suffering and was quite unstable. With minimal development, Pakistan wasn’t making any kind of economic progress that would benefit the country’s financial situation. However, after the initiation of the multibillion-dollar project known as the China Pakistan Economic Corridor (CPEC), the country started making progress. Trade with China increased manifolds even though the project hasn’t been fully completed.

The trade between China and Pakistan is valued in billions; it is valued at approximately $12 billion out of which Chinese exports to Pakistan are valued at $9 billion while Pakistan imports to China are $ 3 billion. According to analysts, the CPEC contributed to an increase of more than 10% in the bilateral trade between the two countries. Developments in sectors of manufacturing and advancement in the country’s infrastructure have made the positively contributed to the Pakistan’s growth.

Another main focus of both countries is the deep-sea port at Gwadar, as it is the starting point in the whole CPEC project. The Chinese have taken it as their mission to build up the city of Gwadar and transform it into a modern world city. As for the Gwadar Port, the COPHC is rapidly developing the infrastructure of the port and is building it on international standards. Experts believe this will benefit the city in numerous ways and will attract a lot of international and local business. China will be utilizing the port as well for importing and exporting. Pakistan will earn immensely once China starts importing large quantities of fuel and utilizes the port to export to European and Middle Eastern markets. As many people noted the rise of development in the city, this led to a large-scale acquisition of land thus leading to a rise in Gwadar property prices.

Lastly, the SEZ which is being built near Gwadar will skyrocket production of goods and also start increasing the exports of various Pakistan’s products such as rice, garments and also ceramic. The Gwadar Real estate sector is also quickly building up the city as it is sure to experience rapid development and an influx of people all over from Pakistan.