The Gilgit Baltistan was a region of princely state of Jammu Kashmir ruled by Maharaja Hari Singh. Before independence; a rebellion occurred and rebels established an independent rule for a short time. After that; keeping view of the Muslim predominance in the region; it has been merged with Pakistan.
The significance of Gilgit and Baltistan is evident to anyone who looks at the map even cursorily. Without control of Gilgit, Gwadar has no meaning to China. For China, the $46 billion China Pakistan Economic Corridor (CPEC) is a means to increasing its strategic presence in Pakistan and CPEC is part of a grand plan to enhancing influence through rail, road and pipeline connectivity to Central and West Asia while linking Gwadar to Xinjiang through Gilgit. Besides, Xinjiang is only 2500 km from the Arabian coast but is 4500 km from the Pacific coast.
For Pakistan, the significance is that it hopes to get out of the economic distress that it is through this much needed infrastructure activity that CPEC promises. Gwadar, overlooking the Gulf of Oman and as an alternative to the Iranian port of Chahbahar will give strategic advantage to Pakistan. Pakistani dreams have varied from making Gwadar a Dubai of the Arabian Sea or a Singapore on this side of the Malacca Straits, the coast line would be its Riviera and the naval base would take care of India.
The Chinese started taking serious interest in Gwadar in 2001-02 when they saw the Americans entering Central Asia and Afghanistan in their fight against terrorism. The obvious worry was to secure energy supplies and not be dependent on routes that could be subject to interdiction, especially when the Indians and the Americans had decided to co-operate in patrolling the Malacca Straits.