22 December 2010

China SignPost™ (洞察中国) #13–Still a Pipedream: A Pakistan-to-China rail corridor is not a substitute for maritime transport

Gabe Collins and Andrew Erickson, Still a Pipedream: A Pakistan-to-China rail corridor is not a substitute for maritime transport,” China SignPost™ (洞察中国), No. 13 (22 December 2010).

China SignPost 洞察中国–“Clear, high-impact China analysis.”©

The recent flurry of trade deals and MOUs (worth US$35 billion) signed during Premier Wen Jiabao’s recent visit to Pakistan have brought the possibility of a more robust Pakistan-to-China transport corridor back into the spotlight. The trade deals stand to drive increased economic activity by Chinese companies in Pakistan in coming years.

However, our assessment is that while the trade and investment agreements may help cement an “all weather” alliance between Beijing and Islamabad, they do not mean that an all weather transport corridor becomes viable. An expanded road and rail network linking Pakistan to China faces three key challenges. The bottom line is that maritime shipping routes will remain a cheaper, simpler, and more secure option for moving crude oil and other goods into China. …