Islamabad: Pakistan’s ambitions of the Belt and Road Initiative (BRI) face an unprecedented hit as Beijing abruptly pulls back from funding its flagship China-Pakistan Economic Corridor (CPEC) projects. Forming part of China’s larger BRI, the corridor includes highways, railways, energy projects and special economic zones linking China’s western region of Xinjiang to Pakistan’s Gwadar Port. It aims at enhancing trade, connectivity and strategic influence.
Prime Minister Shahbaz Sharif and Army Chief Field Marshal Asim Munir, who attended China’s high-profile military parade and met President Xi Jinping, now confront the reality that Beijing will not finance the Karachi-Rohri railway segment worth $2 billion. The move signals a major blow to Pakistan’s infrastructure plans, forcing Islamabad to urgently seek funding from the Asian Development Bank (ADB) to salvage the second phase of the CPEC corridor.
New disclosures indicate that China has stepped back from financing Pakistan’s largest CPEC projects. The Karachi-Rohri section of Main Line 1 Railway, previously expected to receive $2 billion from Beijing, has been left unfunded. China cited financial and security concerns as reasons for withdrawing support.
Under the BRI, China has invested over $50 billion in Pakistan. Gwadar Port has been constructed, and plans for a naval base are underway. The first phase of the CPEC brought significant infrastructure investment and strategic collaboration. The second phase, which would expand the corridor further, now faces a critical funding gap due to China’s retreat.
The ADB loan request involves upgrading 480 kilometres of the Karachi-Rohri railway segment. The total cost of the project is estimated at $6.7 billion, covering the entire 1,726-kilometre stretch from Karachi to Peshawar. If approved, this would mark the first time that a major project in Pakistan is financed by a multilateral lender rather than Beijing.
China’s financial withdrawal reflects growing frustration over Pakistan’s unpaid debts, particularly the $1.5 billion owed to Chinese power companies. Security concerns exacerbate the situation. Since 2021, 21 Chinese citizens in Pakistan have been killed. Highlighting China’s unease, President Xi Jinping recently emphasised the need for stronger security measures to the Pakistani military chief.
China has also sought permission to deploy its military for the protection of its personnel in Pakistan. Due to Islamabad’s reluctance, Chinese security personnel will now operate under the cover of private companies.
Pakistani officials, including economist Haroon Sharif, confirmed that China had conducted a financial review of the CPEC project but decided to step back due to repayment risks. The ADB’s involvement opens the possibility for non-Chinese companies to take over project contracts.
Combined with growing geopolitical tension, the funding shift marks a major blow to Pakistan’s infrastructure and strategic ambitions. Prime Minister Shahbaz faces rising domestic and international pressure as he seeks alternative funding to sustain the corridor and maintain momentum on projects critical to Pakistan’s economy and the BRI.