Chinese and Pakistani officials are finalizing plans that would lay the groundwork for the establishment of a China-Pakistan free trade zone (FTZ) at the port of Gwadar in Pakistan, the Global Times reported on Monday, Nov. 16.
The Shanghai Securities News reported that the new FTZ will become a part of Pakistan's Gwadar Port FTZ, as plans are still under discussion. The free port will be similar to Hong Kong, the report added.
China's top economic planner, the National Development and Reform Commission (NDRC), led the Chinese delegation in the discussions.
The report said that several companies based in Zhuhai in South China's Guangdong Province and the city of Gwadar signed deals worth 6.5 billion yuan ($1.02 billion) to develop the port.
Chen Fengying, an expert with the China Institutes of Contemporary International Relations, said that the FTZ plans may include establishing industry parks, which can help facilitate investment and trade.
"I believe that more plans will follow, and the establishment of an FTZ at the strategically import [sic] port of Gwadar is an important step," Chen told the Global Times.
China Overseas Ports Holding Co. (COPHC) leased over 650 acres of land in Gwadar to build and operate the FTZ, according to Pakistan-based newspaper, The Express Tribune.
The paper said in another report that it was the first part of a deal signed between the two countries, under which Pakistan will provide a total of 2,281 acres of the Gwadar FTZ to COPHC as part of a 43-year lease.
COPHC will operate at the FTZ through three main companies: Gwadar International Terminal, Gwadar Marine Services and Gwadar Freezone Company.
Experts said that the new developments with the Gwadar FTZ marked a milestone in the China-Pakistan Economic Corridor (CPEC).
"The new developments are by far the most important step in the implementation of the CPEC," Sun Lizhou, deputy director of the Academy of the World and China Agendas, told the Global Times.
The CPEC was unveiled during President Xi Jinping's state visit to Pakistan in April, which is a major bilateral initiative that aims to build infrastructure facilities in Pakistan that will connect the country's Arabian Sea coast with the Himalayan border in China.
Sun said that the Gwadar FTZ will serve as an "entry point" for Chinese companies and products to enter the country.
The establishment of an FTZ is expected to have great significance to China's "One Belt, One Road" initiative, which will connect with Europe via Central Asia, Sun noted.