China’s strategic plan for $58bn railway project from Gwadar to Kashgar unveiled

China’s strategic plan for a railway project from Gwadar to Kashgar worth US$58 billion has been unveiled as the project has been suggested to move forward due to its strategic relevance.

This is reported by the South China Morning Post following a government-commissioned feasibility assessment conducted by researchers at the government-owned China Railway First Survey and Design Institute Group Co Ltd.

According to the feasibility study, which was supervised by the institute's deputy director of capital operations Zhang Ling, the planned project, China's largest Belt and Road Initiative transport project, has the potential to change trade and geopolitics throughout the Eurasian continent.

According to the report, the 3,000-kilometer Pakistan-China railway will skirt the Malacca Strait and reduce reliance on the South China Sea by connecting China's western provinces with the Arabian Sea.

Furthermore, "connections with other transport networks, such as those in Iran and Turkey, would provide a more direct route to Europe for Chinese goods, while Pakistan is expected to benefit greatly from improved infrastructure and easier trade with China," according to the report.

The scientists emphasised that the host countries contributed a significant portion of the finances for the majority of BRI transport infrastructure construction projects, while Chinese involvement was far smaller.

Pakistan's important financial benefactors include long-time ally China, while the South Asian country's foreign exchange reserves remain perilously low.

Last month, China extended another $2 billion loan to Pakistan, providing relief during the country's severe balance of payments crisis. Pakistan had already refinanced $1.3 billion in three installments from the Industrial and Commercial Bank of China Ltd (ICBC). Pakistan also received $700 million from the China Development Bank at the end of February.

Pakistan is now one of the countries experiencing a debt crisis as a result of months of political and economic upheaval exacerbated by last year's devastating rains and record inflation. The 2019 bailout comprises a $1.1 billion loan tranche that has been postponed due to protracted negotiations with the International Monetary Fund (IMF).