China rejects reports of seeking guarantees from Pakistan for approving $6bn loan

China on Monday dismissed reports that it asked Pakistan of additional guarantees for approving a $6 billion loan for Main Line -1 (Ml-1) project and moving away from its financial commitments to the ambitious China-Pakistan Economic Corridor (CPEC).

Last week, Express Tribune citing its sources reported that China had also proposed commercial and concessional loan against Pakistan's desire to secure the cheapest lending.

Chinese Foreign Ministry spokesman Zhao Lijian rejecting the report said that despite the global economic recession, "China's input in the Belt and Road Initiative (BRI) including the CPEC" has increased.

“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 said while addressing a press briefing.

He briefed that over the first three quarters, China's direct financial investment in BRI countries increased by around 30 percent. He termed the move as China's support to many BRI partner countries in their effort to fight the epidemic and recover their economy.

The project includes dualisation and upgrading of the 1,872km railway track from Peshawar to Karachi, and it is also the part of the China-Pakistan Economic Corridor (CPEC).

Earlier, the media outlet quoting its sources within the Ministry of Economic Affairs said that the third round of financial negotiations gave further clarity on the Chinese position on $6 billion lending for the $6.8 billion strategically important ML-1 project of Pakistan Railways.

The Chinese authorities had asked for additional guarantee mechanism after Islamabad sought debt relief from G-20 countries, which was only meant for poorest nations of the world.