Beijing: 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)
