Nov 22, 2014

China is paying for investment in Pakistan, not only to develop energy resources (probably oil and gas fields) but also infrastructure projects. Since this will not increase Pakistan’s national debt, it is likely that Chinese companies will own whatever they build.

Such economic aid is China’s way of gaining influence in countries around the world. This is in contrast to the US way, which is either to bribe leaders by “foreign aid” or to threaten them with military actions and/or sanctions.

http://www.reuters.com/article/2014/11/21/us-pakistan-china-idUSKCN0J51C120141121

(Reuters) - The Chinese government and banks will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, according to new details of the deal seen by Reuters on Friday….

Documents seen by Reuters show that China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects….

The deal says the Chinese government and banks, including China Development Bank[CHDB.UL], and the Industrial and Commercial Bank of China Ltd (ICBC) (601398.SS), one of China's 'Big Four' state-owned commercial banks, will loan funds to Chinese companies, who will invest in the projects as commercial ventures.