KARACHI: Chinese company Xinning Enterprise and the Gwadar Port Authority (GPA) have signed an agreement to stimulate industrial and commercial investments at the port and its free zone, Pakistan’s maritime affairs ministry said on Tuesday. 

Gwadar city is situated along the Arabian Sea and lies at the heart of the China-Pakistan Economic Corridor (CPEC), under which Beijing has funneled tens of billions of dollars into massive transport, energy and infrastructure projects in Pakistan. 

Pakistani officials have said Gwadar’s geostrategic position as the shortest trade route to the Gulf and Central Asia highlights its port’s potential to become a regional transshipment hub. 

“China’s Xinning Enterprise has signed a Letter of Intent (LoI) with Gwadar Port Authority (GPA) to stimulate major industrial and commercial investments at Gwadar Port and its Free Zone, underscoring Gwadar’s growing role as a key regional hub for trade and economic activity,” the statement said. 

The statement said these ventures include developing Gwadar port as a regional transshipment center, launching new industrial projects, optimizing existing facilities within the Gwadar Free Zone and relocating industries.

Pakistan’s Maritime Affairs Minister lauded the partnership as a “significant milestone” in strengthening Gwadar’s strategic importance.

“He highlighted Xinning Enterprise’s potential to boost the port’s throughput, attract foreign investment, and contribute to the broader economic development of the region,” the statement said. 

Chaudhry reaffirmed the government’s commitment to transforming Gwadar into a global maritime gateway and industrial powerhouse, the ministry added. He stressed that collaborations with reputable international enterprises will accelerate Pakistan’s maritime and economic ambitions.

As cash-strapped Pakistan recovers from a macroeconomic crisis with the help of a $7 billion International Monetary Fund deal, Islamabad has been looking to capitalize on its geostrategic location to boost transit trade and foreign investment for a sustainable economic recovery.

Prime Minister Shehbaz Sharif’s government has eyed increased trade and investment deals with regional allies such as the Gulf countries and Central Asian Republics since Pakistan came close to defaulting on its debt in 2023.