Transformative $58 Billion Railway Project Redefining Eurasian Trade and Geopolitics
Beijing's Ambitious $58 Billion Railway Project Connecting Pakistan and Western China
A government-commissioned feasibility study has given a resounding green light to Beijing's grand plan—a $58 billion railway system linking Pakistan with Western China. The South China Morning Post reported on Thursday that this project's strategic significance cannot be ignored.
P.c. Startup Pakistan
The study, crafted by researchers at China's state-owned China Railway First Survey and Design Institute Group Co Ltd, envisions a groundbreaking railway connecting Kashgar in China to the coastal city of Gwadar in Balochistan.
This monumental undertaking, known as China's largest Belt and Road Initiative transport venture, could usher in a new era of trade and geopolitics across Eurasia. Spearheaded by Zhang Ling, the institute's deputy director of capital operations, the feasibility study highlights that the proposed 3,000 km Pakistan-China railway would circumvent the Strait of Malacca and reduce reliance on the South China Sea, forging a direct link between China's western regions and the Arabian Sea.
Moreover, it's not just about connecting China and Pakistan. The study underscores the potential to establish connections with transport networks in Iran and Turkey, offering a more efficient route for Chinese goods to reach Europe. This transformative project is poised to bolster Pakistan's economy, enhancing its infrastructure and streamlining trade with China.
Importantly, the study emphasizes that host nations have contributed a significant portion of the funds for most Belt and Road Initiative transport projects, with Chinese investment being comparatively smaller. Pakistan, in particular, has received substantial support from its long-time ally, China, given the precarious state of its foreign exchange reserves.
China recently extended a lifeline to Pakistan with a $2 billion loan, providing much-needed relief amid a severe balance of payments crisis. This came after Pakistan had already refinanced $1.3 billion from the Industrial and Commercial Bank of China Ltd (ICBC) in three installments. Additionally, Pakistan received $700 million from the China Development Bank in February.
Pakistan is grappling with a debt crisis exacerbated by months of political and economic unrest, compounded by devastating floods and record inflation. The 2019 bailout package includes a delayed $1.1 billion loan tranche, subject to prolonged negotiations with the International Monetary Fund (IMF).