China denies seeking additional guarantees for $6 billion loan to Pakistan

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ISLAMABAD: China has denied reports in Pakistani media that it had sought additional guarantees from Islamabad to sanction a $6 billion loan for a railway line project and was backing out of financial commitments to the multi-billion dollar China-Pakistan Economic Corridor (CPEC), international media reported.

The Express Tribune newspaper had reported last week that China had proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad’s wish for cheapest lending.

In August, Pakistan’s top economic body approved its costliest project to date as part of the multibillion-dollar CPEC agreement, giving the go-ahead for a $6.8 billion project to upgrade its railway lines, the government said.

CPEC has seen Beijing pledge over $60 billion for infrastructure projects in Pakistan, central to China’s wider Belt and Road Initiative (BRI) to develop land and sea trade routes in Asia and beyond.

Addressing a press briefing, Chinese Foreign Ministry spokesman Zhao Lijian rejected claims that China was backing away from its financial promises to Pakistan, and called the reports baseless.

I would also like to stress “that against the global economic recession, China’s input in the Belt and Road Initiative (BRI) including the CPEC has not reduced but rather increased against the odds,” he was quoted as saying by media. 

“Over the first three quarters, China’s direct financial investment in BRI countries increased by around 30 percent, offering China’s support to many BRI partner countries in their effort to fight the epidemic and recover their economy,” Zhao said.

The ML-1 project, which includes dualisation and upgradation of a 1,872-km railway track from Peshawar to Karachi, is a flagship of the second phase of CPEC.