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Gwadar Port Authority has rented 923 hectare (2,300 acre) to China for developing the first special economic zone (SEZ) of the port, according to AFP.

Analysis shows that the establishment of the SEZ will set model for Pakistan economic development.

Gwadar Port is a deep-water port situated in Balochistan province of Pakistan. Upon the request of Pakistan, China aided the construction both financially and technically. The infrastructure construction started in March, 2002 and completed in February, 2015.

The port is a key transportation pivot in the China Pakistan Economic Corridor.

“I think the biggest benefit for Pakistan is economic interconnection,” says Masood Khan, previous Pakistan ambassador to China. According to him, in order to encourage domestic and foreign investment into SEZ, Pakistan government has granted SEZ with priority access to resources and preferential tax policies to investors.

Besides Gwadar Port cooperation, China and Pakistan also published a joint declaration on April 20th, where both parties are to impel the construction of economic corridor connecting Gwadar to China’s Xinjiang via roads and railways, as well as the collaboration on various energy power projects. Both parties believe the economic corridor will act as a crucial bridge for China’s One Belt, One Road policy.