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Dirt road to mega-highway: China invests in Pakistan

China newest foreign investment is a mega-highway in Pakistan that will cross one of the highest mountain ranges in the world.

China builds pakistan highwayEnlarge
A car drives through a melting glacier on the Karakoram highway in Pakistan. Glaciers such as these are only one of the construction challenges China faces in modernizing the Karakoram highway. (Paula Bronstein/Getty Images)

China's growing international investment has brought with it a lot of scrutiny, in particular focusing on the investments made in Africa.

But there's another, somewhat surprising beneficiary, one that has long been a huge recipient of US aid — Pakistan.

Hasnain Kazim has an excellent article in Der Spiegel today detailing the incredible Chinese investment in Karakoram Highway. The plan is turn what is currently an 800-mile long gravel path, running from Kashgar in western China's Uighur Autonomous Region to near the Pakistani capital Islamabad, into a modern highway.

It's a difficult job, building a highway over one of the highest mountain ranges in the world (the original highway is sometimes referred to as the "eighth wonder of the world'), and local villagers have already died in a huge landslide. Chinese workers are protected by armed guards at all times — no photos of the workers are even allowed — and Chinese state banks are financing the venture, which costs $400 million.

Compared with the aid the US sends to Pakistan ($1 billion in 2013, a big drop from previous years), that may not seem so much, but investing in large infrastructure projects seems to be a Chinese tactic.

Kazim explains:

"Kilometer by kilometer, a monument to Chinese foreign economic policy is being erected. Beijing doesn't worry about the short-term rates of return for its building projects abroad, but on the long-term trade options that they open up instead. The country is also interested in gaining allies with its generous help. In many countries besides Pakistan, Chinese engineers are working on key infrastructure projects. And often the Chinese are also investing in exactly the places from which the West has long since retreated -- such as many African countries rich in natural resources."

Long term trade options may well be the result of the Karakoram Highway's makeover. Others, however, wonder if the highway will be used to transport tanks and other heavy military equipment to the Indian Ocean in the outbreak of conflict.

 

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Original Source URL: 
http://www.businessinsider.com/china-is-making-an-incredible-investment-in-pakistan-by-turning-this-mountainous-dirt-track-into-an-enormous-mega-highway-2012-7

http://www.globalpost.com/dispatch/news/business/120717/dirt-road-mega-highway-chinas-latest-investment-pakistan