Chinese interests caught in drone threat

QUETTA, Pakistan - The reported United States plan to use Predator drone aircraft to attack targets in Pakistan's southwestern province of Balochistan may affect activity there by the Chinese, who have focused most of their investment in the country in that area, notably around the seaport of Gwadar, according to local analysts.
United States President Barack Obama and his top aides are reported to be considering expanding covert operations against Taliban and al-Qaeda leaders to Balochistan, particularly in and around the provincial capital of Quetta. Taliban leader Mullah Omar is rumored to be based in the province, something denied last week by Balochistan chief minister Mohammad Aslam Raisanit. The US operations could include strikes by remote-controlled aircraft, or drones. To date, these unmanned craft have concentrated their efforts on the tribal areas that border Afghanistan. US drones have carried out more than 30 drone strikes since early 2008. The strikes have killed about 300 people, including several mid-level al-Qaeda members, according to a tally of reports from Pakistani officials and residents of border regions, according to Reuters.
While Gwadar seaport, just 624 nautical kilometers east of the Strait of Hormuz, gateway to the Persian Gulf, lies about 1,000 kilometers from Quetta, the project has already been delayed due to insurgent activity by rebels hostile to the central government. The possibility of using America's Central Intelligence Agency-operated drones in the province, the country's most economically backward area, may further destabilize security there and create a severe domestic backlash.
Projected improved transport links between Gwadar and Quetta and a planned oil pipeline linking the port to China's western region could also be threatened if drone attacks increase the level of local unrest.
The Chinese are developing Gwadar to serve as a strategic base to spread Beijing's influence in oil-rich Middle East and Central Asia. The mineral-rich province has also attracted Chinese miners and oil companies.
Firms working in Balochistan include Tianjin Zhongbei Harbor Engineering Supervision Corporation of China, China Harbor Engineering Company Group, Metallurgical Construction Corporation (MCC) and its subsidiary, MRDL and Chinese petroleum outfit, the Bureau of Geophysical Prospecting (BGP).
So far, China has been the biggest investor in developing Gwadar. The two-phase program of port construction is being supervised by Tianjin Zhongbei Harbor Engineering, with a total estimated cost $1.6 billion. China has so far contributed about $198 million, while Pakistan has allocated $50 million. Elsewhere in the city, China Harbor Engineering Company (CHEC) is involved in building an international airport at a cost of $70 million.
An important feature of the city's development and strategic importance is a $12.5 billion oil refinery being built by China's Great United Petroleum Holdings Company. The China-funded refinery will have an annual refining capacity of refine 21 million tonnes of oil.
China and Pakistan are also working on a plan to lay a trans-Himalayan pipeline to carry Middle Eastern crude from Gwadar to the remote western area of China, running alongside the Karakoram highway. Development of the Gwadar port project has already been delayed over security concerns. In May 2004, three Chinese engineers were killed by terrorists and in the same month the city's airport was attacked by rockets.
Inland, Chinese company MCC acquired the 18 billion-rupee (US$223 million) Saindak copper and gold project on a 10-year lease in September 2002. It has been operated by MRDL, with an initial investment of $26 million, since August 2003. Exports from Saindak started the next year.
Under a March 2002 memorandum of understanding, state-owned MCC also agreed to invest $74 million to exploit and develop lead and zinc deposits, estimated at over 14 million tonnes, at the Duddar Lead and Zinc Project, northeast of Gwadar. The project got underway in April 2005.
Zhuzhou Smelter, China's second-largest zinc producer by capacity, plans to import 50,000 tonnes of zinc concentrate and 20,000 tons of lead a year from Duddar. The company owns less than 40% of the Duddar mine but plans to take its entire output.

The Chinese are also engaged in petroleum exploration in Balochistan. BGP was awarded a $1 million contract in 2001 to survey an area in Dera Bugti, in the province's heartland. The survey was suspended soon afterwards for security reasons before being resumed the following year.

Sparsely populated Balochistan has a population of only 7.5 million people, yet occupies 44% of the Pakistan's total area. It is re-emerging as a front line for the US military campaign in Afghanistan, with which it shares a 1,100 kilometer northern border, after playing an important role in the post-1979 US-backed Afghan jihad against occupying Soviet Union forces.

Some analysts also believe that the $5 billion cash lifeline recently proposed by Washington for Pakistan, along with $1.5 billion annual assistance over the next five years, to avert an imminent economic meltdown and destabilization, will go to waste if the US expands its air strike targets to the impoverished province.