Will Gwadar go the way of Hambantota? Why Chinese loans to Pakistan are sparking takeover fears along the economic corridor

Adnan Aamir says China is spending more than US$55 billion on projects in Pakistan, much of it of through loans given on strict conditions. While Islamabad has been able to reject a few Chinese demands for now, ballooning debt may well weaken its resolve

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President Xi Jinping of China welcomes Pakistani Prime Minister Nawaz Sharif, ahead of the Belt and Road Forum in Beijing, on May 13. Photo: Reuters

Published: 12:49pm, 27 Dec 2017Updated: 7:06pm, 27 Dec 2017

Earlier this month, Sri Lanka officially handed over its strategically important port of Hambantota to China on a 99-year lease, after Colombo failed to repay its debts to Beijing. The move has raised concerns in Pakistan that its Gwadar port, built as part of a trade corridor with China, could meet with the same fate.

China is spending more than US$55 billion on different projects in Pakistan. Although the project agreements have yet to be publicised despite public pressure, experts claim that a major part of this amount is comprised of loans.

This could lead to a situation similar to Sri Lanka’s, and it is feared that Pakistan could end up handing over control of Gwadar port and other assets to China.

These fears are not unfounded, as proved by the developments around the 7th Joint Cooperation Committee meeting of the China-Pakistan Economic Corridor, a key segment of China’s Belt and Road Initiative.