What's new

China-Pakistan railway ‘worth it’ at estimated US$58 billion: study

If a rail link between Pakistan and China is built it can literally transform the country.

China imports hundreds of billions of dollars worth of goods. Unlike the West, China doesn’t have quotas for Pakistani goods. If Pakistan had been managed properly we could have been exporting $200 billion of goods to China instead of being stuck to total exports of $27 billion to the whole world.

If this rail link is built Pakistani industries can expand massively to export to China. We can export to China on ships as well, but the rail link will help.
The reality is that Pakistan biggest trade deficit is to China.

Countries that bordering China has massive trade deficit with China like Vietnam and Thailand despite both are very competitive export oriented countries.

Chinese main population is also in near their coast line, Far from Pakistan but closer to SEA.
 
This is why Pakistan needs to get its act together, have the elections, and have a government that focuses on the economy.

With a economy focused government in place, Chinese investors will see their investment will get reliable ROI and will be protected because the host country is focusing on social harmony and human development, especially in the regions these rail routes go through.

The core portion in a $23 Billion route between Kashgar and Havelian in Pakistan and $5 Billion between Karachi and Gwadar. Once that is built the rest can be built piece meal once the ROI starts coming in. A further $3 billion would make a connection with the Iranian rail network from Gwadar and allow Iran crude to come via rail to China directly.
Some in Pakistan worry that the rail network might not benefit Pakistan since it doesn't have much industries and products to transport now. But, with all SEZs and industrial parks under CPEC put in place and other industries develop in say 10 years time, the situation will be very different.
 
The initial cost estimate is always on the much lower side, the real cost could be well above $100 billion

That's almost the same of our one year surplus from the trade with India

The trade between India and China touched an all-time high of USD 135.98 billion in 2022, while New Delhi's trade deficit with Beijing crossed the USD 100 billion mark for the first time.
To be honest, if China wants Pakistan to be able to afford to pay for this project it will have to help Pakistan industrialize, rapidly, and coordinate with partner nations (to invest in part of the project as well as promise to use the route in large enough volumes).

If this is actually a $100 billion investment, this will easily be a central part of China’s BRI ambitions, and therefore will require economic stability as well as political stability in Pakistan.

Some in Pakistan worry that the rail network might not benefit Pakistan since it doesn't have much industries and products to transport now. But, with all SEZs and industrial parks under CPEC put in place and other industries develop in say 10 years time, the situation will be very different.
Indeed. With Pakistan’s demographics; average age 22.5 years old, with the right investment in education and modernization of industry and agriculture, Pakistan can function similar to the West coast of the US does for the rest of the Us; 20% of the collective population and economy. Huge opportunities for Pakistan as well as Chinese investors, as well as continent spanning connectivity.
 
Diversification, just in case something happens in Russia.
In my opinion, Pakistan geography is near Middle East and Europe. Better you guys improve your own economy, politics, infrastructure.

Rather than giving Chinese access to those market, why dont you try to benefit it by bringing more investment.

Geography does matter and so far India is the only benefiter in South Asian region.

Even Indonesian manufacturing company like PT Bukaka prefer to invest in India in order to better penetrate European market. The owner is pious Muslim and Islamist leader, Yusuf Kalla. If Pakistan has better political stability, this company would prefer to invest in Pakistan.


If you guys still cannot be united and attack each other instead, no ones want to invest in Pakistan.
 

China-Pakistan railway ‘worth it’ at estimated US$58 billion: study

  • Belt and Road Initiative’s most expensive transport infrastructure project ‘has potential’ to reshape trade and geopolitics
  • The rail link is part of a broader plan to revive ancient Silk Road connections and reduce reliance on Western-dominated routes


Stephen Chen in Beijing
Published: 3:01pm, 27 Apr, 2023

79822c3ba4b4422fb88ba68ba6cd15a7.jpg


The China-Pakistan railway – China’s largest Belt and Road Initiative transport project – will cost an estimated 400 billion yuan (US$57.7 billion), but should proceed because of its strategic significance, a government-commissioned feasibility study has found.

The proposed railway, connecting Pakistan’s port of Gwadar to Kashgar in China’s Xinjiang Uygur autonomous region, was assessed by scientists from the state-owned China Railway First Survey and Design Institute Group Co Ltd.

The team, led by the institute’s deputy director of capital operations Zhang Ling, said the project was the belt and road plan’s most expensive transport infrastructure.

Despite the cost, the project had the potential to reshape trade and geopolitics across the Eurasian continent and should be supported, the team said in a report published by the Chinese-language journal Railway Transport and Economy in April.

“The government and financial institutions [in China] should provide strong support, increase coordination and collaboration among relevant domestic departments, strive for the injection of support funds and provide strong policy support and guarantees for the construction of this project,” they said.

The institute is one of the largest of its kind in China and has been involved in many major railway projects at home and internationally, including Indonesia’s Jakarta-Bandung high-speed rail line.

The 3,000km (1,860-mile) railway will link China’s western regions with the Arabian Sea, bypassing the Strait of Malacca and reducing dependence on the South China Sea.

Connections with other transport networks – including in Iran and Turkey – would also provide a more direct route to Europe for Chinese goods, while Pakistan is forecast to get a much-needed boost from the improved infrastructure and easier trade with China.

The scheme is a key component of Beijing’s broader belt and road plan to promote economic cooperation and connectivity among the countries along the ancient Silk Road trade routes.

Previous studies by Chinese government researchers have suggested the infrastructure initiative could have significant geopolitical implications, helping to shift the balance of power away from traditional Western-dominated trade routes.

As well as encouraging a more multipolar world order, the belt and road plan could also help to promote economic development and stability in countries along the route by creating jobs, boosting infrastructure investment and increasing trade, the studies said.

Most belt and road transport infrastructure construction projects had received a significant proportion of funding from the host countries, and the scale of investment was much smaller, Zhang and his colleagues noted.

For example, total investment in Kenya’s Mombasa-Nairobi standard gauge railway was US$3.8 billion, with China providing 5 per cent of the funding and Kenya paying for the rest.

The project connects the port city to the Kenyan capital and is part of a larger plan to link East African countries by rail. Similarly, China contributed 30 per cent of the US$4 billion funding for the Addis Ababa-Djibouti rail line in Ethiopia.

China covered 75 per cent of the Jakarta-Bandung high-speed railway’s costs of US$5.9 billion, with Indonesian state-owned enterprises providing the remainder.
But Pakistan is unable to make a similar contribution. Its GDP last year was US$370 billion – just six times the estimated cost of the project.

“Due to energy shortages, poor investment environment and fiscal deficits, Pakistan’s economic growth rate has come under pressure,” the team said.

“In terms of railway investment and construction, Pakistan is unable to provide sufficient financial and material support and mainly relies on Chinese enterprises for investment and construction.”

One reason for the hefty cost is the mountainous and geologically complex terrain along the route. There could be technical challenges to overcome in the construction and operation of the railway, the researchers said.

The project also required supporting infrastructure – such as ports and logistics facilities – that might not be immediately available in Pakistan, they said.

The study said Pakistan’s labour policies could be unpredictable, which could potentially affect the railway’s construction and operating costs.

The team also noted that Pakistan had experienced security challenges in recent years, including in its western region where the railway will pass through. Balochistan province, for instance, has been plagued by separatist violence for decades.

This could potentially disrupt construction and operation of the railway and pose a risk to Chinese workers and investments, the researchers said.

The study also pointed out the railway’s potential impact on neighbouring countries, such as India. With each country having its own priorities and interests, there could be disagreements or delays in decision-making related to the project, it said.

Zhang’s team suggested that a build and transfer (BT) model would provide the best investment and financing strategy for the project.

They considered BT against build-operate-transfer, public-private partnerships, and the engineering, procurement, construction mode that are becoming more popular in belt and road projects.

In the BT model, a contractor would be responsible for designing, building and financing the railway, with payment on completion and ownership transferred to the government or other commissioning entity.

The researchers said BT would allow the risks associated with the railway’s construction and operation to be allocated more effectively between China and Pakistan, potentially reducing the financial risks for both parties.

By ensuring that ownership of the railway was transferred to Pakistan, BT could also help to build trust between China and Pakistan by showing China’s commitment to supporting Pakistan’s long-term economic development, they said.

China and Pakistan have been talking for years about the railway, a crucial part of the China-Pakistan Economic Corridor (CPEC) that was launched in 2015 and aims to connect Gwadar port to Xinjiang through a network of roads, railways and pipelines.

The researchers said the China-Pakistan relationship was complex, with both countries having different priorities and interests.

Negotiating agreements related to financing, labour policies, and other issues would require careful consideration of each country’s priorities and interests, they said.

In conclusion, Zhang and his team said their recommendation could help to move negotiations forward.

The problem is poor planning from Pakistan side.

For some reason Pakistani side doesn't want a meter gauge or electricification which shows how stupid we are
 
This is not possible with countless glaciers and mountains this is a far fetched dream no way. A railroad is much harder to construct than a carpet road.
Following river valleys and building many tunnels, the Chinese have used this approach in similar terrain in Tibet.

1682655007138.jpeg


In my opinion, Pakistan geography is near Middle East and Europe. Better you guys improve your own economy, politics, infrastructure.

Rather than giving Chinese access to those market, why dont you try to benefit it by bringing more investment.

Geography does matter and so far India is the only benefiter in South Asian region.

Even Indonesian manufacturing company like PT Bukaka prefer to invest in India in order to better penetrate European market. The owner is pious Muslim and Islamist leader, Yusuf Kalla. If Pakistan has better political stability, this company would prefer to invest in Pakistan.


If you guys still cannot be united and attack each other instead, no ones want to invest in Pakistan.
Political reforms after the elections will hopefully lead to the reforms to attract the kind of growth you state.

This rail line is a separate engine of potential growth, that will take at least 10 years to build anyway, similar to the line being built between Chengdu and Lhasa.
 
The reality is that Pakistan biggest trade deficit is to China.

Countries that bordering China has massive trade deficit with China like Vietnam and Thailand despite both are very competitive export oriented countries.

Chinese main population is also in near their coast line, Far from Pakistan but closer to SEA.

That’s true. China makes everything, so it’s hard to export to them. However, as their labor costs go up it is possible to move some industries to other countries, which is already happening.

It’s just that Pakistan never made an effort to get a piece of the pie. No investment in training and education for young people, no effort to get Chinese companies to invest etc. The economy is the last thing in the minds of the dumb generals and politicians.
 
If Malacca strait is the reason, they have already planned railway from southern China to western coast of Myanmar at 1/6th the cost.

View attachment 926641

That still doesn’t negate the risk of a coalition of nations putting their navies in the Bay of Bengal and blockading this port.

Gwadar SLOCs to the GCC is shorter and potentially easier to defend, especially if the GCC puts their foot down to politically defend the SLOCs.

If the Swiss can do it, so can the Chinese.

Glacier-Express-switzerland-.jpg

GlacierExpress-Brig-StMoritz.jpg

221029215535-rhb1-1.jpg

s3ucpj4njzaqhn08y5p8

4-gornergrat-credit-thomas-andenmatten-1563509840.jpg

3-bernina-express-credit-swiss-travel-system-1563509783.jpg


Especially with the new Swiss tunnel
 
That’s true. China makes everything, so it’s hard to export to them. However, as their labor costs go up it is possible to move some industries to other countries, which is already happening.

It’s just that Pakistan never made an effort to get a piece of the pie. No investment in training and education for young people, no effort to get Chinese companies to invest etc. The economy is the last thing in the minds of the dumb generals and politicians.

Pakistan should target Middle East and European market instead. Chinese will be difficult to penetrate and geographically you are in disadvantage position compared to SEA countries since China main population is far from Pakistan and near their coast line in Pacific where their biggest ports are located.
 
That’s true. China makes everything, so it’s hard to export to them. However, as their labor costs go up it is possible to move some industries to other countries, which is already happening.
Wrong, China has 1.4 billion population and needs to buy a lot the meet the domestic market, espcially agricultural products and raw material, China buys a lot of food from US, Brazil and Australia.

FuprJbgWcAcu45H.png
 
Indonesia is unlikely close Malacca strait, what we are doing is just abducting some ships who wants to go to Singapore port if they dont follow our rule like happening last year and the other year.

Unlikely there is war between US and China, similar like unlikely there is war between US and Russia.
China is considering this route as a way to diversify and as an insurance to maintain its trade routes.

This route need not only be useful in a war, but as the world shifts in unexpected ways, this could be surprisingly useful, such as when the Suez Canal closed due to the stuck ship.
 
Pakistan should target Middle East and European market instead. Chinese will be difficult to penetrate and geographically you are in disadvantage position compared to SEA countries since China main population is far from Pakistan and near their coast line in Pacific where their biggest ports are located.
China is well connected with high speed railway network and numerous airports, there's no much difference in development between the east and west in China now.
 
Countries in western Europe are always looking to modernize. Recently in the U.K they retired their rolling stocks which are capable of speeds of 200km/h. If only we had a standard guage and electrified tracks, a country like Pakistan could have been at the receiving end for discounted prices.
Exactly, so much equipment from around the world, that could be bought and used.
 
Back
Top Bottom