Pakistan, explained.
A view of the Gwadar port, part of the China-Pakistan Economic Corridor, linking Gwadar port with Kashgar in northwest China. and a flagship project under Belt and Road Initiative (Ahmad Kamal/Xinhua via Getty Images)
An attempted shortcut around the Malacca Strait has left a port without profit or security.
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China’s Gwadar gamble isn’t paying offChina’s Gwadar gamble isn’t paying off
The Gwadar Port (Opens in new window), the crown jewel of the China-Pakistan Economic Corridor (CPEC) (Opens in new window) and hero of the Belt and Road Initiative, now looks like a monument to strategic overreach. Once hailed as China’s ultimate maritime shortcut to bypass the treacherous Malacca Strait (Opens in new window), the deep-sea port is rapidly transforming from a geopolitical asset into a financial and security liability as Beijing’s risk appetite diminishes under domestic economic strain (Opens in new window).
The core premise of Gwadar was to connect China’s landlocked western province of Xinjiang (Opens in new window) directly to the Arabian Sea (Opens in new window). However, the physical and geopolitical terrain through which this trade must traverse makes it one of the most perilous logistical corridors in the world.
Goods moving from Xinjiang to Gwadar must cross the Karakoram highway (Opens in new window), navigating altitudes of over 4,600 metres. The area is plagued by frequent landslides, avalanches, and extreme weather, rendering it structurally incapable of handling the high-volume container traffic required to replace maritime shipping.
Once past the mountains, the route cuts through Gilgit-Baltistan (Opens in new window), Khyber Pakhtunkhwa (Opens in new window), and Balochistan (Opens in new window). Convoys must pass through territories marked by intense sectarian violence, Taliban activity (Opens in new window), and deep-seated local insurgencies.
Infrastructure abounds, but commercial opportunities are yet to follow (Ahmad Kamal/Xinhua via Getty Images)
Gwadar sits in Balochistan, Pakistan’s most volatile province. The Baloch Liberation Army (Opens in new window) (BLA) and other insurgent groups view CPEC as an imperialist exploitation of their natural resources. Consequently, Chinese engineering units, convoys, and infrastructure have become primary targets for sophisticated suicide bombings and guerrilla ambushes.
The BLA’s specialised Majeed Brigade (Opens in new window) has shifted from low-intensity guerrilla skirmishes to high-yield suicide strikes explicitly aimed at maximising Chinese casualties. The frequency of these incidents has strained the “Iron Brother” relationship between Islamabad and Beijing. It has forced Pakistan to raise dedicated Special Security Divisions (SSD) (Opens in new window), which are still failing to completely shield Chinese infrastructure from asymmetric threats.
China originally saw Gwadar as a chance to solve its “Malacca Dilemma (Opens in new window)” – the fear that the US Navy could blockade the narrow Malacca Strait during a conflict, choking China’s energy imports. Mechanically and economically, Gwadar fails to solve this problem.
Pipelines and overland trucking are exponentially more expensive than ocean freight. Pumping oil upward through thousands of kilometres of mountainous terrain from Gwadar to Xinjiang requires immense energy, destroying the commercial viability of the route. A pipeline or railway stretching 3,000 kilometres through hostile Pakistani territory is impossible to secure. It represents a massive, static target for sabotage. Even if oil lands at Gwadar, tankers must still cross the Indian Ocean, where the Indian Navy holds dominant positions.
China is growing weary of sacrificing both capital and the lives of its citizens to defend a commercial failure.
For a mega-infrastructure project to succeed, it requires a baseline of local political stability. In Gwadar, China and the Pakistani state have achieved the exact opposite by completely alienating the local populace. The local Baloch population has been excluded from the economic benefits of the port. Massive, prolonged civil protests led by the Haq Do Tehreek (Opens in new window) (Give Rights Movement) have repeatedly shut down the port area. The high-tech jobs are given to Chinese expatriates, while the low-skilled labour is largely brought in from Pakistan’s Punjab province. While millions are spent on port infrastructure, the city of Gwadar suffers from acute shortages (Opens in new window) of drinking water and electricity. The local fishing community – the backbone of the regional economy – has been displaced (Opens in new window) by Chinese deep-sea trawlers and security exclusion zones.
The economic architecture supporting CPEC is fundamentally broken. Pakistan is trapped in a structural balance-of-payments crisis, relying on rolling IMF bailouts and Chinese debt deferrals to avoid sovereign default.
A port requires a bustling industrial hinterland to survive. The Special Economic Zones planned around Gwadar remain largely empty shells. Major international shipping lines continue to bypass Gwadar in favour of established regional hubs such as Dubai, Salalah, or even Karachi, because Gwadar lacks the cargo volume to justify docking.
China has poured billions into Gwadar, but under the current 40-year lease, 91% of the port’s revenues are supposed (Opens in new window) to go to Beijing. Because the port generates virtually no revenue, China is extracting no returns (Opens in new window) while forced to spend heavily to secure its stranded assets. Indeed, China’s own economic slowdown has led to the tightening of capital controls and a shift away from high-risk, high-cost overseas megaprojects. Beijing is transitioning from the expansive “Belt and Road (Opens in new window)” era to a more cautious “small is beautiful” development framework. Gwadar’s massive maintenance costs are becoming indefensible to Chinese state planners.
Gwadar is rapidly approaching a tipping point. Pakistan cannot afford to secure or maintain it, and China is growing weary of sacrificing both capital and the lives of its citizens to defend a commercial failure.
The port will soon slip from Chinese hands – not necessarily through a dramatic military eviction, but through a quiet retreat. Beijing is highly likely to downscale its operational footprint, reducing Gwadar from a vibrant commercial mega-port to a minor, heavily fortified naval refuelling station, or eventually restructuring the lease entirely to cut its losses. Ultimately, geography and economics have exposed Gwadar as an unsustainable geopolitical illusion.
About the author
Jaideep Saikia
Jaideep Saikia is a Distinguished Fellow with the New Delhi-based Council for Strategic and Defence Research.
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