Pakistan is willing to build a highway and a railway linking western China and running through Pakistan from south to north. This construction will create a Pakistan-China economic corridor, said Pakistan's newly sworn in Prime Minister Nawaz Sharif -- elected for the third time -- in his inauguration speech on June 5.

In addition, the Chinese Foreign Ministry stated on June 6 that the construction of the corridor was the most important consensus reached by the two parties during Premier Li Keqiang's visit to Pakistan last month.

Hong Lei, spokesman for China's Foreign Ministry, said that China will work with Pakistan to step up the planning and construction of the project and make it the highlight of cooperation between the two countries. The project connects Kashghar in China's Xinjiang Uygur Autonomous Region to the Pakistani port of Gwadar.

Gwadar Port is a deep water port on the shores of the Indian Ocean. As a strategic passage on the Indian Ocean, it locates near the Strait of Hormuz and the Iranian border, and connects Pakistan to West Asia.

Supported by then Pakistani President Pervez Musharraf, China invested US$200 million in the Gwadar Port and completed construction of the port's phase one project in 2006, enabling the port to harbor large vessels with an annual throughput of 50,000 tons and three approximately 200-meter-long multi-purpose berths.

Singapore won the bid for the phase two project, though little progress has been made by the Singaporean side.

On Feb. 18, the Pakistani government took over the operating rights from Singapore and consequently handed them to three Chinese companies: China Overseas Port Holding Company, China Merchants Holdings and COSCO Shipping.

Pakistani media analysts believe that if fully developed, the Gwadar Port can better connect the landlocked Central Asia to the rest of the world, strengthen Pakistan's foreign trade – which will entail huge economic benefits for the country – and enable high-capacity vessels to enter the main ocean. In addition, the Gwadar Port project will provide thousands of job opportunities and improve the lives of the people in Pakistan's Balochistan Province.

Being far away from Karachi reduces the port's risk of being blockaded and threatened by the Indian navy.

As for China, the Gwadar Port will link China with the Arabian Sea and the Strait of Hormuz, thus enhancing the region's oil transportation and trading networks. Once the land transportation problem has been solved, the Gwadar Port can be used directly to convey oil and natural gas to China's western region. This will additionally weaken U.S. influence in the Arabian Sea.