The growing nearest proximity between India and China seems to be overshadowing Pakistan. China has recently given such a shock to Pakistan that it seems to be ‘begging’ for the funds. According to media reports, Pakistan is now demanding help from the Asian Development Bank (ADB) to upgrade the important part of its old Karcirohari railway line. The project was previously considered to be the center point of the China-Pakistan Economic Corridor (CPEC), but after a long conversation, China retreated from giving funds for this project. Now Pakistan is planning to upgrade this railway line by taking a loan of $ 2 billion from ADB.
Under CPEC, China promised an investment of about $ 60 billion for energy and transport infrastructure in Pakistan. Project ML-1 railway upgrade was the largest and important project. This is about 1,800 km long railway line spread from Karachi to Peshawar. It was considered a project to change Pakistan for Railways. But even after almost 10 years of diplomatic efforts, its financeing could not start.
China knows the deteriorating condition of Pakistan
According to reports, China is not suddenly out of this project. Beijing was considering it for a long time. Especially in view of Pakistan’s deteriorating financial condition and problems in repaying the debt, China decided to retreat. Because already Chinese companies have put billions of dollars in the electricity sector, Pakistan is not able to pay till now.
China is avoiding taking risks
China’s revenge towards India shows that China is now considering its foreign investment policy again. Due to the ongoing tariff war worldwide, China is also going through the challenges of the economy. It may be that China is avoiding big investment at such a time, where the risk of debt refund is high. Pakistan also comes in such countries, on which the liability is constantly increasing and repeatedly comes to seek help from IMF.
Project not finished
China’s withdrawal from ML-1 is not a complete termination of CPEC, but it definitely shows that the speed of the project has definitely slowed down. When the highway, power plant and port were built rapidly between 2015 and 2019, the project caught pace. CPEC’s last major project, Gwadar East Bay Expressway, was completed in 2022. After that, the work slowed down and the arrears of Chinese power companies on Pakistan increased. Now working with ADB for ML-1 will probably decide the direction of the projects coming forward.