The South China Morning Post reported on Thursday that a feasibility study commissioned by the government found that Beijing’s plan to construct a $58 billion railway system connecting Pakistan with Western China should go forward due to its strategic importance.
The proposed railway project would connect the Chinese region of Kashgar to the coastal city of Gwadar in Balochistan, according to the study, which was produced by researchers at the government-owned China Railway First Survey and Design Institute Group Co Ltd.
The feasibility study, which was overseen by Zhang Ling, the institute’s deputy director of capital operations, found that the proposed project, which is China’s largest Belt and Road Initiative transport project, has the potential to change trade and geopolitics across the Eurasian continent.
The study claims that the 3,050 km Pakistan-China railway will bypass the Strait of Malacca and reduce reliance on the South China Sea by linking China’s western regions with the Arabian Sea.
Further, “connections with other transport networks, i.e. in Iran and Turkey, would also provide a more direct route to Europe for Chinese goods, while Pakistan is forecast to get a much-needed boost from the improved infrastructure and easier trade with China,” the report adds.
The scientists emphasized that, for the majority of BRI transport infrastructure construction projects, the host countries had contributed a sizeable portion of the funds and that Chinese investment was significantly lower.
Since Pakistan’s foreign exchange reserves are still at dangerously low levels, China, a longtime ally, is one of the country’s main financial backers.
Pakistan received a second $2 billion loan from China last month, providing some relief during that nation’s dire balance of payments crisis. Pakistan had already paid back $1.3 billion in three installments to the Industrial and Commercial Bank of China Ltd (ICBC). Pakistan also received $700 million from the China Development Bank at the end of February.
After months of political and economic unrest that was exacerbated by last year’s devastating floods and record inflation, Pakistan is now one of the countries going through a debt crisis. The 2019 bailout deal includes a delayed $1.1 billion loan tranche that was the focus of drawn-out negotiations with the International Monetary Fund (IMF).
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