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An agreement was signed in Islamabad on Monday to hand over management of the strategic Gwadar port to a Chinese company, according to Pakistani media.
Observers said the move will boost regional development and should not concern any third country.
The construction site at Gwadar port in the Arabian Sea. Behram Baloch / Agence France-Presse
Under the agreement, China Overseas Port Holdings Ltd will fully assume the responsibility of the port from Singapore’s PSA International. The port will remain property of Pakistan and the Chinese company will share the profit, The News International reported.
Chinese Ambassador to Pakistan Liu Jian dismissed speculation that China would use the port for military purposes, the Nation newspaper reported on Monday.
Liu also rejected India’s concerns over the handover, saying no third country should have reservations about the bilateral arrangement, which "is in the economic interest of the peoples of China and Pakistan", the newspaper reported.
Experts said the move aims to develop the port region, which has long been dogged by security threats, and strengthen stability in Pakistan, and the move is in line with China’s interests.
China provided about 75 percent of the initial $250 million funding for the construction of the port, which is close to the Pakistan-Iran border and the Strait of Hormuz in Pakistan’s southwestern Baluchistan province. The Pakistani cabinet on Jan 30 approved the transfer of the port because the Singaporean company had not developed the deep-sea port on the Arabian Sea "as desired".
Pakistan hopes that the Chinese company’s investment in the port will help the country support its economy, Information Minister Qamar Zaman Kaira said last month.
But India fears that the port could be used by the Chinese navy to jostle for geo-strategic power in the region, The Express Tribune reported on Friday. "In one sentence, it is a matter of concern for us," Indian Defense Minister A K Antony said earlier this month. "My answer is very straightforward and simple."
Fazul-ul-Rehman, former director of the China Studies Center at the Institute of Strategic Studies Islamabad, dismissed Indian concerns but he said China has become more cautious about big investment projects in Pakistan due to security concerns, AFP reported.
Pakistan expects the port to be a hub for trade and economic activities in the sparsely populated but resource rich region and to create jobs.
China will hardly see profits from the port in the short term due to chronic problems such as inadequate infrastructure and land requisition, said Hu Shisheng, an expert on South Asian studies at the China Institutes of Contemporary International Relations.
In the near future, China needs to revive the port by investing in infrastructure construction and help Pakistan to independently develop the region, he said.
"To address security issues, China has to bring the local people into the project and let them actually benefit from it," Hu said. China has been working on at least 120 different projects in the South Asian country, while security was the responsibility of the Pakistan government, Liu said. The ambassador said Gwadar port will play an important role in Pakistan’s economic development.