PM Shehbaz, President Xi agree to upgrade CPEC, advance development in second phase

Prime Minister Muhammad Shehbaz Sharif and Chinese President Xi Jinping on Friday held a productive meeting, reaffirming the consensus on high-quality development of China Pakistan Economic Corridor (CPEC) and the timely completion of major ongoing projects.

The two leaders also affirmed consensus on the up-gradation of the CPEC and advancing the development of the mega project in the second phase.

The prime minister briefed President Xi on Pakistan’s policies for economic reform and sustained growth, industrial development, agricultural modernisation and regional connectivity and the critical role played by CPEC in Pakistan’s development.

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He asserted Pakistan’s commitment to high-quality development of CPEC and to foster synergy between the development strategies of the two countries through close coordination.

The meeting between the two leaders was held here at the historic Great Hall of the People. The two leaders were accompanied by the Federal Ministers and senior officials. This was the first meeting of PM Shehbaz with the President of China since assuming office in 2024.

The two leaders reaffirmed the time-honoured ‘All-Weather Strategic Cooperative Partnership’ and expressed the resolve to further deepen cooperation across diverse domains ranging from political and security to economic, trade, and people-to-people exchanges.

They also exchanged views on regional and global developments including Afghanistan, Palestine and South Asia including the serious human rights situation in the Indian Illegally Occupied Jammu and Kashmir (IIOJK). The two sides reiterated their longstanding support for each other’s issues of core interest.

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Commending President Xi’s visionary Belt and Road Initiative (BRI) and Global Development Initiative (GDI), the prime minister underscored that as the flagship project of BRI, CPEC had significantly contributed to Pakistan’s socio-economic development.

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PM Shehbaz underlined Pakistan’s commitment and full support for safety and security of Chinese nationals, projects and institutions in Pakistan.

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PM Shehbaz Sharif is on a five-day visit to China, days before his government presents the annual budget and applies for a new International Monetary Fund (IMF) loan.

The government is expected to seek at least $6 billion under a new IMF programme after it presents its annual budget on June 12. And the $27 billion or so that Pakistan owes China, according to World Bank data, is central to this next round of discussions with the fund.

The IMF in May opened discussions on the new loan after Islamabad completed a short-term $3 billion programme, which helped stave off a sovereign debt default last summer.

Pakistan owes China almost 13% of its total debt, which was taken on to pay for infrastructure projects over the years and other types of spending.

Beijing has lent Islamabad almost twice as much as its second- and third-ranked multilateral lenders, the World Bank and the Asian Development Bank, to which Pakistan owes $16.2 billion and $13.7 billion respectively.

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Chinese firms have also invested a further $14 billion in Pakistan since a new economic corridor connecting their countries was announced in the summer of 2013 as part of Chinese President Xi Jinping’s flagship Belt and Road Initiative, data from the American Enterprise Institute think tank shows.

Most of that investment was made by Chinese state-owned energy companies financing fossil-fuel and nuclear power plants, as well as logistics routes under construction connecting Gwadar Port in the Arabian Sea with the Xinjiang region in China’s northwest.

Xi told Sharif that their two countries should focus on “promoting the joint construction of the China-Pakistan Economic Corridor,” and Chinese and Pakistani firms 31 memoranda of understanding covering technology, agriculture, trade, energy, coal and gasification, according to Pakistan’s commerce ministry.

But the Chinese leader also called on his guest to step up efforts to ensure the security of Chinese projects in the country.

In March, a suicide bomb attack killed five Chinese engineers working on a dam project in Pakistan’s northwest. Pakistan is to pay compensation of about $2.5 million to the heirs of five Chinese nationals who lost their lives in terror attack.