China May Retreat from Gwadar Port Amid Security Risks, Economic Challenges: Lowy Report

China’s port at Gwadar-- the crown jewel of the China-Pakistan Economic Corridor (CPEC) and hero of the Belt and Road Initiative -- faces mounting economic and security challenges that threaten its viability as a major trade corridor, a new report has said. The report from Australia-based policy think tank Lowy Institute forecasted that China might eventually abandon the port due to huge costs involved in running it.

Goods routed from Xinjiang to Gwadar must cross Gilgit‑Baltistan, Khyber Pakhtunkhwa and Balochistan, regions afflicted by sectarian violence, Taliban activity and deeply entrenched local insurgencies. Further, the goods must traverse the Karakoram Highway at altitudes above 4,600 metres, a stretch prone to landslides, avalanches and extreme weather that makes high‑volume container traffic difficult through this area. Gwadar, in Pakistan’s Balochistan province, has become a frequent target for insurgent groups such as the Baloch Liberation Army, which views the CPEC as an exploitative tool to plunder the region's natural resources. "Consequently, Chinese engineering units, convoys, and infrastructure have become primary targets for sophisticated suicide bombings and guerrilla ambushes, the report said.

China’s plan to make Gwadar its maritime shortcut to bypass the treacherous Malacca Strait, has backfired after BLA’s specialised Majeed Brigade evolved from running low-intensity guerrilla skirmishes to high-yield suicide strikes. Multiple strikes explicitly aimed at maximising Chinese casualties forced Pakistan to raise dedicated Special Security Divisions (SSD), which continue to fail in protecting Chinese infrastructure. "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 report noted. It forecasted that China will make a quiet retreat from the port by downscaling its operational footprint. The move will reduce Gwadar from a vibrant commercial mega-port to a minor, heavily fortified naval refuelling station. China could also eventually restructure the lease entirely to cut its losses.

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