April 16, 2015 / 11:45 AM / 2 years ago

Chinese president to visit Pakistan, hammer out $46-billion deal

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Chinese President Xi Jinping speaks during a media conference in the Great Hall of the People in Beijing March 26, 2015.Feng Li/Pool

ISLAMABAD (Reuters) - Chinese President Xi Jinping will launch energy and infrastructure projects worth $46 billion on a visit to Pakistan next week as China cements links with its old ally and generates opportunities for firms hit by slack growth at home.

Also being finalised is a long-discussed plan to sell Pakistan eight Chinese submarines. The deal, worth between $4 billion and $5 billion, according to media reports, may be among those signed on the trip.

Xi will visit next Monday and Tuesday, Pakistan's foreign ministry said.

Commercial and defense ties are drawing together the two countries, which share a remote border and long-standing mistrust of their increasingly powerful neighbor, India, and many Western nations.

"China treats us as a friend, an ally, a partner and above all an equal - not how the Americans and others do," said Mushahid Hussain Sayed, chairman of the Pakistan parliament's defense committee.

Pakistan and China often boast of being "iron brothers" and two-way trade grew to $10 billion last year from $4 billion in 2007, Pakistani data shows.

Xi's trip is expected to focus on a Pakistan-China Economic Corridor, a planned $46-billion network of roads, railways and energy projects linking Pakistan's deepwater Gwadar port on the Arabian Sea with China's far-western Xinjiang region.

It would shorten the route for China's energy imports, bypassing the Straits of Malacca between Malaysia and Indonesia, a bottleneck at risk of blockade in wartime.

If the submarine deal is signed, China may also offer Pakistan concessions on building a refueling and mechanical station in Gwadar, a defense analyst said.

China's own submarines could use the station to extend their range in the Indian Ocean.

"China is thinking in terms of a maritime silk road now, something to connect the Indian Ocean and Pacific Ocean," said a Pakistani defense official, who declined to be identified.

For Pakistan, the corridor is a cheap way to develop its violence-plagued and poverty-stricken Baluchistan province, home to Gwadar.

China has promised to invest about $34 billion in energy projects and nearly $12 billion in infrastructure.

Xi is also likely to raise fears that Muslim separatists from Xinjiang are linking up with Pakistani militants, and he could also push for closer efforts for a more stable Afghanistan.

"One of China's top priorities on this trip will be to discuss Xinjiang," said a Western diplomat in Beijing. "China is very worried about the security situation there."

Additional reporting by Ben Blanchard in Beijing; Editing by Robert Birsel and Clarence Fernandez

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