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What is the News?
Pakistan has signed a new agreement with China to begin the second phase of the China-Pakistan Economic Corridor(CPEC).
What is CPEC?
CPEC is a bilateral project between Pakistan and China. It is part of OBOR (One Belt One Road) initiative of China.
The corridor links Xinjiang with Gwadar, and also passes through Pakistan-occupied Kashmir (PoK) where China is investing in a number of projects.
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What is the purpose of the second phase of the CPEC?
The second phase of CPEC is aimed at boosting Chinese investment in Pakistan, as well as transferring Chinese industrial capacity.
The agreement will also promote industrialisation and development of economic zones, and initiate, plan, execute, and monitor projects both in the public as well as the private sector.
According to US-based international development research lab AidData, a substantial chunk of Chinese development financing under the CPEC consists of loans that are at or near commercial rates as opposed to grants.
Moreover, around 40% of China’s lending to Pakistan does not appear on the government’s books, for the most part.
Source: This post is based on the article “China Pakistan ink new CPEC agreement” published in The Hindu on 5th Feb 2022.