China has taken over the management of a strategic deep-water Pakistani seaport.

 

The port of Gwadar on Pakistan's southwestern coast has been transferred to China state-owned Overseas Ports Holding Company.

 

The company will be fully responsible for operational control of the port from Singapore's PSA International.

 

However, the port will remain the property of Pakistan and profits will be shared between Pakistan and the new Chinese owners.

 

Pakistani President Asif Ali Zardari says the port is helping to improve trade ties between China and Pakistan:

 

"It gives new impetus to Pakistan-China relations and it takes a step further our political cooperation into the realm of economic cooperation. Gwadar port will enhance trade and commerce not only between Pakistan and China but also in the region. It has strategic importance for the People's Republic of China. Around 60 percent of China's crude oil comes from the Gulf countries. China's import of crude oil from the Gulf countries would increase within the next decade. These countries are close to Gwadar."

 

Construction of the port cost 250-million US dollars of which China funded a large part.

 

Situated in the Arabian Sea, the port occupies a strategic location between South Asia, Central Asia and the Middle East.

 

It lies near the Strait of Hormuz, which is a gateway for about 20 percent of the world's oil.

 

Chinese Ambassador to Pakistan Liu Jian has dismissed speculation China would use the port for military purposes.

 

Liu has also rejected India's concerns over the handover, saying no third country should have reservations about the bilateral arrangement on the handover of the port.