In accordance with Chinese President Xi Jinping’s pledge to assist cash-strapped Pakistan in its financial position, Pakistan and China have decided to begin a high-speed train project for roughly $9.85 billion.
According to a statement from the Prime Minister’s Office, the Main Line-1 is “a project of strategic importance” and the agreement was made during a meeting in Beijing between Prime Minister Shehbaz Sharif and Xi.
The project entails modernising a 1,163-mile colonial-era track that runs from Karachi to Peshawar in order to accommodate high-speed trains, according to Bloomberg.
The project, which has been in consideration for years, was officially approved by Pakistan earlier this week without disclosing the source of finance or offering any technical information.
Officials in Pakistan anticipated receiving loans from China for the upgrading.
The US has long criticised China for employing what it refers to as “debt diplomacy” to increase the dependence of developing countries on Beijing. Despite this, China postponed an earlier bailout for Pakistan as its debt skyrocketed, and it has been reducing loans to Africa as its economy weakens.
According to a report from the International Monetary Fund (IMF) published in September, state-owned commercial banks in China are owed nearly 30 per cent of Pakistan’s foreign debt.
Xi and PM Shehbaz decided to finalise the plans for a Karachi inner-city train route during their meeting. The Chinese president also announced that his country would give Pakistan 500 million yuan ($68.7 million) to aid with reconstruction after flooding over the summer that caused more than 500,000 people to lose their homes.
The People’s Bank of China said in a statement that the central banks of both nations had signed an agreement of cooperation on a yuan clearing in Pakistan on Wednesday without providing many other specifics.
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