China reviews projects in Pakistan amid delayed repayments and security concerns: Report
Beijing, Oct 21
Delayed loan repayments coupled with ongoing security risks to Chinese nationals working in Pakistan have prompted Beijing to reassess its engagement in key China Pakistan Economic Corridor (CPEC) projects, a report said on Tuesday.
It added that in its new avatar, CPEC 2.0, signed during Pakistan Prime Minister Shehbaz Sharif's visit to China in early September, focuses on projects in agriculture, electric vehicles, solar energy, health and steel. This marked a shift away from the headline-grabbing investments in infrastructure, which would have given China a strategic foothold in Pakistan.
“During Prime Minister Shehbaz Sharif’s visit to China in early September, the two sides launched what is being described as CPEC 2.0. The updated framework shifts attention from large-scale infrastructure to sectors aimed at sustainable development and industrial modernisation,†a report in Uzbekistan's media outlet ‘Darakchi’ detailed.
“The original CPEC, valued at around $62 billion, was designed to connect China's Xinjiang region with Pakistan’s Gwadar Port through a network of roads, railways, pipelines, and energy projects. Over the past decade, Pakistan reportedly received about $25 billion in direct Chinese investment,†it added.
According to the report, one of the key projects of the initial phase was the Main Line-1 (ML-1) railway upgrade — a $6.8 billion plan to modernise Pakistan’s main railway corridor from Karachi to Peshawar. The initiative was expected to boost Pakistan’s transport capacity and enhance its role as a regional transit hub.
However, the report said, shifting economic realities and security concerns have led both sides to review the scale and structure of their cooperation.
Citing reports, it stated that Pakistan is currently pursuing multilateral financing for sections of the ML-1 railway project, with the Asian Development Bank (ADB) considering possible involvement.
“Chinese companies have faced challenges related to delayed payments in Pakistan’s power sector, while Islamabad has been balancing its external debt obligations and negotiations with international financial institutions. These factors, alongside global economic headwinds, have contributed to a more cautious Chinese investment approach,†the report stressed.
“At the same time, security issues have posed risks to workers and facilities linked to CPEC. Several incidents in recent years have targeted Chinese nationals and project sites, underscoring the need for enhanced protective measures,†it noted.
— IANS
Reader Comments
The security concerns mentioned here are very real. Multiple attacks on Chinese workers show how unstable the region is. Hope our government is monitoring this situation closely for national security implications.
$62 billion project reduced to focusing on smaller sectors? This is what happens when you build debt traps. China's Belt and Road initiative is facing reality checks across multiple countries now. Good lesson for other nations considering Chinese loans.
While I understand the strategic concerns, we should also acknowledge that any economic instability in our neighborhood affects regional trade and security. Hope both countries find a sustainable way forward.
The ML-1 railway project delay is significant. This was supposed to be a game-changer for Pakistan's infrastructure. Now they're seeking ADB funding? Shows how dependent they are on international bailouts.
The shift to agriculture and solar energy in CPEC 2.0 makes more sense than the massive infrastructure projects. At least these sectors can create local employment and are more sustainable. Maybe there's a lesson here for development projects everywhere.
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