Alibaba To Raise Up To $12.9 Billion In World’s Biggest Public Listing This Year

Topline: In the world’s biggest IPO so far this year, Chinese e-commerce giant Alibaba is set to raise up to $12.9 billion in a landmark public listing in Hong Kong, boosting the financial markets of a city gripped by political unrest and recession.

  • The debut on the Hong Kong stock exchange is a secondary listing for Alibaba, which initially went public on the New York Stock Exchange in 2014, raising $25 billion in the world’s biggest IPO in history.
  • Alibaba said that it would price shares at $HK176 ($22.50) each, a discount of 2.9% to its New York Stock Exchange closing price (eight Hong Kong shares will be worth one U.S.-listed share), Reuters confirmed on Wednesday.
  • The price means that Alibaba is set to raise at least $11.3 billion, and up to $12.9 billion if a greenshoe option to list more shares is exercised—but that looks likely since the skyrocketing demand for shares caused Alibaba to close its books earlier than expected, according to CNBC.
  • Scheduled for November 26, the listing could swell Alibaba’s cash pile to around $44 billion, which would be more than any other internet company and double that of rival e-commerce giant Tencent, according to Bloomberg.
  • It would also be the world’s biggest IPO so far in 2019: Alibaba’s Hong Kong listing exceeds Uber’s $8.1 billion public debut in New York and AB InBev’s $5 billion IPO of its Asia business in Hong Kong earlier this year.
  • Alibaba’s listing will likely be eclipsed by Saudi Arabia’s state oil giant Saudi Aramco, going public on the Riyadh stock exchange in December, with its IPO set to raise up to $25.6 billion–that could break Alibaba’s existing record for the world’s largest IPO in history.

Key background: Alibaba’s listing will help boost Hong Kong’s financial markets, given that the city recently slid into recession for the first time in over a decade, following more than five months of anti-government protests. And with the ongoing U.S.-China trade war leading the Chinese government to call for companies to publicly list closer to home, Alibaba’s listing helps cement the Hong Kong Stock Exchange as one of this year’s largest venues for IPOs—and that could set an example for other Chinese unicorns to opt for Hong Kong over the U.S. when they go public.

Tangent: In its eleventh edition of Singles’ Day, the biggest shopping event in the world, Alibaba set a new sales record of $38.4 billion in gross merchandise volume during the 24-hour shopping bonanza. To compare, Singles’ Day far outpaces other big e-commerce days in the U.S., with Alibaba’s haul more than double the amount sold on last year’s Black Friday, Cyber Monday and Amazon Prime Day combined

Source: Forbes

Author:Sergei Klebnikov

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China rolls out 5G mobile phone technology before schedule

China‘s three state telecoms companies on Thursday announced the roll out 5G mobile phone services, marking a key step in Beijing’s ambitions to become a technology superpower while it remains locked in a trade war with Washington.

China Mobile, China Unicom and China Telecom said on their websites and online stores that 5G plans, which start from as low as 128 yuan ($18.2) a month, will be available from Friday, allowing Chinese consumers nationwide to use the ultra-fast mobile internet service.

However, all three had already started offering access to the service on Thursday morning.

Beijing had originally said it would launch the ultra-fast mobile internet service, which promises to support new features such as autonomous driving, early next year. But it accelerated its plans as tensions with the United States, especially over its boycott of telecoms giant Huawei Technologies, heated up.

“China will have the largest commercial operating 5G network in the world on Friday, and the scale of its network and the price of its 5G services will have a pivotal impact throughout the supply chain,” research firm Bernstein said in a report this week.

Authorities have said that they plan to install more than 50,000 5G base stations across 50 Chinese cities in the country by the end of this year, and that big cities, including Beijing, Shanghai, Guangzhou, and Hangzhou, are already covered by the 5G network.

More than 10 million mobile plan subscribers who have pre-registered for 5G will have access to faster videos and games, more virtual reality applications and improved performance for mobile videoconferencing.

Smartphone companies from Xiaomi to Huawei have also unveiled new products in anticipation of the 5G roll out, with Huawei saying that it anticipates to start seeing a revenue uplift from the sector next year.

Xiaomi said earlier this month that it plans to launch more than 10 5G phones next year and that there was a fear in the industry that consumers would stop buying 4G models.

Despite the pressure from the US on other countries not to partner with Chinese firms for 5G technology, Huawei said in July that it had signed more than 60 commercial contracts to supply 5G networks around the world, including at least 28 in Europe.

Source: Aljazeera

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China gives a strong snub to India over nefarious designs against Pakistan

Reiterating its support to Pakistan at the FATF platform, China has categorically announced that they did not want the forum to be politicized as some countries were pursuing their political agenda in a bid to blacklist Pakistan.

“China does not want the FATF to be politicized by any single country. There are some countries, which want to include Pakistan in the blacklist. We consider they have political designs. That is something China is against. China stands for justice,” Deputy Director General for Policy Planning of Chinese Ministry of Foreign Affair Department of Asian Affair Yao Wen said.

 Speaking to a group of visiting Pakistani journalists here, Yao Wen said China stood with Pakistan and blocked any attempt to include Pakistan in the blacklist.

“We made it clear to the United States and India that we cannot do it. It goes beyond the purpose of FATF,” he added.

He said the Financial Action Task Force (FATF) was not meant to put any country in the blacklist, rather to support it to take action against terror financing. Pakistan was effectively pursuing its National Action Plan, and China encouraged it to act against terrorists and strengthen its system.

“China will help (Pakistan) technically and politically to improve its system,” he added. China would also help Pakistan build the capacity to handle issues related to terror financing.

He said instead of pressuring it, the FATF member countries should assist Pakistan to improve its system and China would also continue its support in that regard.

Besides China , a traditional ally of Pakistan, Turkey and Malaysia also supported the country in the FATF meeting held in October.

According to the 36-member FATF’s Charter, the support of at least three countries is required to keep any state from being blacklisted. The FATF in its October meeting expressed satisfaction over the initiatives taken by Pakistan and its progress in various areas.

As regards Pak-China ties, the Chinese official said it was high time in their bilateral relationship since Prime Minister Imran Khan visited Beijing thrice in a year and had meetings with Chinese President Xi Jinping four times.

He said the recent visit of Prime Minister Imran Khan to China was a productive one, wherein he also had interaction with many heads of state.

He said China and Pakistan were all-weather strategic partners, with close cooperation in multiple fields.

The China Pakistan Economic Corridor (CPEC), he said, was moving in right direction. “We are working closely on CPEC, and the issues of Kashmir and FATF.”

He welcomed establishing of China-Pakistan Economic Corridor Authority (CPECA) by Pakistan that would help expedite work on CPEC projects.

About the recent visit of Chinese President to India, he said the relations between Chain and Pakistan were mature enough and they had nothing to do with India.

“China and Pakistan have cooperation in all the sectors. Our mutual trust stands very high while we have deficit of trust with India as we have so many problems and differences (with them),” he added

He said the Chinese president conveyed Pakistan’s concerns to Indian Prime Minister Narendra Modi over current development in the Indian Occupied Jammu and Kashmir.

India was told that Pakistan did not want war with it and desired to resolve the Kashmir issue through peaceful means, he added.

To a question, the official said China had serious concerns over Indian action of August 5, which had even challenged the Chinese sovereignty and interests.

China , he said, had expressed its strong position on the action.

Yao Wen said China had a clear position that the Indian Occupied Jammu Kashmir was a disputed territory. The dispute between Pakistan and India had to be resolved in accordance with the United Nations Charter and its Security Council resolutions. China did not back the unilateral action taken by India, he added. China was willing to play a constructive role for the peaceful resolution of Kashmir issue, he said.

The official said during the last five years, lots of achievements had been gained as about 20 road infrastructure projects and powers generation plants had been completed under CPEC.

“Now we are working with the Government of Pakistan on new projects,” he added. He said in the next phase of CPEC, establishment of special industrial zones would be focused, which would create job opportunities for local people, besides increasing exports, uplifting of social economic and eliminating poverty, he added.

He said China and Pakistan had also strong cooperation in the defence sector.

Source: Daily Times 

Dated on: 29/10/2019

New Chinese magnetic levitation train ‘is faster than going by plane’

A bullet train which ‘floats’ above the tracks using magnetic levitation could soon hit 373mph in China – making it faster than travelling by plane.

A prototype body of the science fiction vehicle was shown off in the eastern Chinese city of Qingdao this week.

The machine, designed by China’s China Railway Rolling Stock Corporation (CRRC), is slated to go into production in 2021.

China has used ‘maglev’ (magnetic levitation) trains since 2003, using magnetic repulsion to ‘lift’ trains up off the ground and to propel it forward.

The technology reduces friction with the tracks and makes it possible for the trains to travel at unheard-of speeds.

CRRC deputy chief engineer Ding Sansan said, ‘Take Beijing to Shanghai as an example — counting preparation time for the journey, it takes about 4.5 hours by plane, about 5.5 hours by high-speed rail, andabout 3.5 hours with high-speed maglev.’

CRRC Qingdao Sifang will now build an experimental track to test the train.

Source: Yahoo News 

Dated on: 03/7/2019

China’s War on Poverty bears Global Significance

Over the past 70 years, China has made notable strides in reducing its poverty stricken population. On this year’s International Day for the Eradication of Poverty, which falls on Thursday, it is illuminating to look back on how China has come this far in poverty reduction and what its achievements mean to the world.

China has been a world champion on poverty reduction. Since the founding of the People’s Republic of China in 1949, it has lifted over 800 million people out of poverty, which represents over 70 percent of global poverty reduction.

Beijing has also promised to wipe out extreme poverty by 2020, ten years earlier than the deadline set by the United Nations (UN) in its 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDG).

A priority of China’s drive to end poverty is to guarantee food self-sufficiency for its 1.4 billion people. To do that, China has worked hard to increase farmland productivity through strategy design and technological innovation, said a white paper titled “Food Security in China” released on Monday.

Official data showed that between 1949 and 2018, China’s annual total grain output rose nearly five times from 113 million tonnes to 658 million, while per capita output more than doubled to 472 kg.

China did not stand still after it has achieved food security. It has continued to improve the livelihood of its people in areas of health, education and women’s empowerment.

China’s poverty elimination experience has proved valuable to other nations that need to solve similar tough issues.

The precise poverty alleviation strategy is China’s main weapon in its war on poverty. With this strategy, China uses flexible policies to meet the needs of various groups of people in different parts of the country.

For example, to reduce poverty facing the elderly, the sick and the disabled, the policy is focused on knitting a stronger social safety net.

Meanwhile, the market has begun to play a vital role. Since 2015, with encouragement from the Chinese government, private enterprises have played a bigger part in numerous social investments to reduce poverty.

While blazing an efficient path for others to draw lessons from, China has promoted international cooperation to benefit more impoverished people.

In late 2018, the UN adopted its first-ever resolution addressing poverty eradication in rural areas, which was put forward by China and the Group of 77.

China has walked its talk by helping other countries slash poverty. It has joined nearly 100 poverty reduction projects in many developing countries, and shared its experience through training and forums, and by building poverty reduction demonstration villages in such developing countries as Laos and Cambodia, according to China’s Progress Report on Implementation of the 2030 Agenda for Sustainable Development released last month.

Beijing believes that development is the master key to solving all problems. Since 2013, China has been trying to invite countries worldwide to join its efforts in promoting open, sustainable and people-centred development within the framework of the Belt & Road Initiative (BRI). Presently, many of the BRI-related projects have begun to bear fruits for local people.

For example, Kenya’s Mombasa-Nairobi Standard Gauge Railway, which was built with Chinese funds and know-how and is the largest infrastructure project since the African country’s independence, has created 46,000 local jobs, lowered costs of transportation and boosted regional trade.

It is hard to terminate poverty in a single country, let alone in the world. Yet that does not mean it is impossible. China’s decades of steady achievements and contributions can help others find some useful clues.

Source: Belt And Road News Network

Dated on: 18/10/2019

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Chinese Companies shifting focus to Organic Growth

Chinese companies are now attaching more importance to localised management and organic growth in the domestic market, which will naturally translate into a global status, rather than focusing on growing International Market share via Mergers and Acquisitions, said experts from JPMorgan.

Sjoerd Leenart, Global Head of Corporate Banking at JPMorgan, said that there has been a discernible shift among Chinese companies in buying targets overseas to digesting and optimising the acquisitions.

“The way in which the companies are going abroad, has shifted from acquisitions to rolling out their business models abroad. It is sometimes better to roll out your own business abroad than buying a third party company,” said Leenart.

According to PwC, the total value of Chinese Companies mergers and acquisitions in the overseas market stood at $26.8 billion during the first six months of this year, down 48 percent year-on-year.

Oliver Brinkmann, Head of Corporate Banking at JPMorgan Asia Pacific, added that the cooling down in outbound moves can be partly attributed to the market share that they have gained in the overseas market.

“A lot of Chinese Companies from various sectors have gone overseas and gained certain market share. There is no need now to buy a third or fourth company in specific sectors. Once you have established a foothold, it will be more about adoption,” he said.

On the other hand, the Chinese Economy has grown massively, which has therefore given birth to an increasing number of global players, said Brinkmann.

Supported by adequate funding, large market scale and the adoption of technology, the Chinese artificial intelligence industry is one area to churn out global market players, he said.

Besides, given that the Chinese labour force is ageing, there is an inherent need for better and fast automation. Meanwhile, driven by the domestic need to control pollution, innovation in electric vehicles, as well as green technology in general, will take place at a faster pace and larger scale. The large number of user cases will be another impetus, said Brinkmann.

“All the three trends are driving domestic development and creating global champions from China. The big cross-border outbound trends are very much driven by technology,” he said.

Brinkmann also added that China’s State-owned enterprises, some of which are strong in the traditional sectors such as oil and agriculture trading, will continue to stage strong performance and invest overseas.

At a time of increasing complexity and uncertainty in the global market, Brinkmann said that the opportunities are in emerging Asia.

Education, healthcare, oil and infrastructure will be the areas where Chinese companies invest the most heavily in other parts of Asia, a trend that can be largely associated with the Belt and Road Initiative, he said.

Source: Belt and Road News

Dated on: 13/10/2019

Three Reasons Why U.S. should not compete with Belt & Road Initiative

China’s announcement of the Belt & Road Initiative (BRI) in 2013 dramatically changed images of the Silk Road.

Far from camels and caravans, the BRI is a Chinese multi-billion dollar infrastructure investment platform to create ultra-modern connectivity on a trans-continental scale. It now involves more than 126 countries and 29 international organisations in Asia, Europe, Africa, and Latin America.

Unfortunately, America’s Free and Open Indo-Pacific strategy (FOIP) is not as familiar as the BRI. The U.S. announced it in 2017 to counterbalance China’s BRI. The FOIP has three pillars: security, economics and governance.

Although there are significant overlaps between the FOIP and the BRI, coordination between the U.S. and China is not likely due to mutual hostility. Nevertheless, facts suggest that the U.S. should coordinate, if not cooperate, with China’s BRI.

First, the BRI can complement what the U.S. hopes to achieve through the FOIP: economic prosperity and free trade. There is a huge demand-supply gap of infrastructure investments in the developing world, which cannot be filled solely by Western developed countries.

China is well equipped to fill this gap with the mega infrastructure development projects under the BRI. Enhanced connectivity through the BRI will improve market access to the least developed countries in Asia and Africa.

Second, the BRI can provide business opportunities to U.S. companies. The recent expansion of the BRI to the advanced economies, such as Italy and Switzerland, means increasing opportunities for U.S. businesses to be involved in the projects.

Also, the participation in the BRI of Latin America, a “backyard” of the U.S., will create space for U.S. companies to build a beneficial relationship with their Chinese counterparts.

Third, finding common ground with the BRI can ease U.S.-China tensions and contribute to regional stability. Although economic and military confrontations entwine the U.S. and China, the two countries can still seek mutual agreement.

No country in the region wants to be caught in the middle of the two great powers, nor forced to choose one of their initiatives. The U.S., the strongest nation in the world, should hold out a hand to encourage China’s peaceful rise.

Some point out the downsides of the BRI, such as debt trap, corruption, labour conflicts, and environmental degradation. The recent renegotiation of, or withdrawal from BRI projects by Malaysia, the Maldives, and Sierra Leone illuminate the debt risk of the BRI projects.

Yet China is well aware of these drawbacks and is trying to address international criticism of the BRI. At the second BRI summit held this April, Chinese President Xi Jinping vowed to improve the quality and transparency of the BRI projects with a greater emphasis on due diligence. He also welcomed international participation in the initiative. Several studies find signs of improvement.

Given the economic interdependence between China and Asia-Pacific nations, it is not realistic to exclude Chinese investments from the regional economy. Even Japan and India, the Quad of the FOIP, expressed willingness to cooperate with the BRI.

An increasing number of Western companies are also showing an appetite for BRI projects. In this situation, U.S. hostility toward the BRI may send a wrong signal to international audiences as if the U.S. is projecting a geopolitical power game, rather than a genuine wish for regional security and development.

Therefore, the U.S. should stop competing with the BRI, and start engaging China to improve the BRI. To counter a powerful myth of the BRI, the U.S. should create its own narrative: the U.S. is a reliable world leader and seeks to harness China’s BRI for its own interests as well as regional peace and stability.

At the end of the day, this effort will achieve trust-building, free and open economy, and good governance, which exactly are the Free and Open Indo-Pacific’s goals.

Source: Belt and Road News Network

Dated on: 10/11/2019

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China-Pakistan ties always a Priority in Neighbouring Diplomacy: Premier Li

China has always regarded its relations with Pakistan as a priority in neighbouring diplomacy, said Chinese Premier Li Keqiang, while reiterating China’s firm support to Pakistan in defending its sovereignty, territorial integrity, and legitimate rights.

Premier Li made the remarks on Tuesday when meeting with Pakistan’s Prime Minister Imran Khan, who is on a two-day visit to China for discussions of the security situation in the region and economic ties with China. Khan is also expected to meet with Chinese President Xi Jinping.

Premier Li spoke highly of China-Pakistan relations. As China’s all-weather strategic cooperative partner, Li stressed that the bilateral ties, with no strings attached and are not targeted to any third party, are always a priority in China’s neighbouring diplomacy.

Noting that the relations are sincerely supported by two peoples, Premier Li promised that China will continue to support Pakistan in not only its national development, but also regional and international affairs by helping it play a more active role.

China-Pakistan relations serve both national and regional interests, said Li, calling for joint efforts to strengthen the bilateral ties to a new stage.

Learning that Pakistan has passed its economic hardship, Li said that China is glad to hear that and vowed to offer Pakistan assistance to its best capabilities.

Khan, for his part, attributed Pakistan’s stable economic development to China’s kind assistance and firm support. The prime minister pledged to expand the scale of trade and investment with China.

Speaking of economic cooperation, the two sides agreed to jointly promote the construction of the China-Pakistan Economic Corridor (CPEC) and Gwadar port, and beef up the synergy between the Belt & Road Initiative (BRI) and Pakistan’s development strategy so as to enhance cooperation in various fields and realise common development.

After the meeting, the two leaders witnessed the signing of over 10 bilateral agreements on infrastructure, law enforcement and security, culture, education, and media.

According to Chinese Foreign Ministry, Khan will also attend the closing ceremony of the Beijing International Horticultural Exhibition on Wednesday.

Source: Belt and Road News Network

Dated on:10/9/2019

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US-China trade negotiations enter tense new phase

Deputy trade negotiators from the United States and China have launched a new round of talks aimed at resolving the two countries’ 15-month trade war, with neither side showing any signs of giving ground.

About 30 Chinese officials led by Vice-Minister of Finance Liao Min entered the US Trade Representative’s office on Monday morning for two days of negotiations, to be followed by the first minister-level trade talks in more than two months.

The White House officially confirmed that the high-level talks, involving Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin, would begin on Thursday.

“The two sides will look to build on the deputy-level talks of the past weeks. Topics of discussion will include forced technology transfer, intellectual property rights, services, non-tariff barriers, agriculture and enforcement,” White House spokeswoman Stephanie Grisham said in a statement.

The talks are getting under way about a week before a scheduled increase -from 25 percent to 30 percent – in US tariffs on $250bn worth of Chinese goods.

US President Donald Trump has said the tariff increase will take effect if no progress is made in the negotiations.

The two sides have been at loggerheads over US demands that China improve protections of US intellectual property, end cybertheft and the forced transfer of technology to Chinese firms, curb industrial subsidies and increase US companies’ access to largely-closed Chinese markets.

Impeachment, Hong Kong and soya beans

As Monday’s talks got under way, the US Department of Agriculture reported more soya bean exports to China, the latest in a recent flurry of buying by Beijing.

China has booked deals for about 3.5 million tonnes of US soya beans since early September, about 10 percent of its annual purchases prior to the trade war.

In recent weeks, the US-China trade situation has become more complicated due to an impeachment inquiry by US Democrats, who are probing a request by US President Donald Trump that Ukraine investigate business dealings by the son of Democratic presidential candidate Joe Biden.

Trump also publicly asked China last week to investigate the Bidens.

White House trade adviser Peter Navarro said on Monday that neither the impeachment inquiry nor Trump’s request that Beijing investigate his political rival would weaken the US negotiating position.

Navarro told National Public Radio that Trump wants a big deal with China – or no deal at all.

Another complicating factor is US support for pro-democracy protests in Hong Kong. Trump has explicitly linked the trade talks to Beijing’s handling of the Hong Kong protests and preservation of the territory’s rights.

A new US-China flashpoint ignited on Monday over a tweet in support of Hong Kong protesters by an official of the National Basketball Association’s Houston Rockets.

China’s state broadcaster dropped the team’s games, and a Chinese corporate sponsor withdrew after Rockets General Manager Daryl Morey tweeted, “Fight for Freedom, Stand with Hong Kong”.

He swiftly deleted the tweet and apologised to fans in China, where the Rockets have a large following from the years when Chinese basketball star Yao Ming played on the team.

Source: Aljazeera

Dated on: 8/10/2019

PM to Discuss Economy, Kashmir With Chinese President

ISLAMABAD – Pakistani Prime Minister Imran Khan will begin an official visit Tuesday to China, where he will meet with President Xi Jinping and Premier Li Keqiang to discuss bilateral ties and the security situation arising from India’s recent actions in the disputed Kashmir region.

Khan’s office said Monday his two-day visit “will be instrumental in further cementing Pakistan’s economic, investment and strategic ties” between the neighboring countries.

Pakistan’s tensions with India have heightened since India’s Hindu nationalist government abolished the semi-autonomous status for Kashmir in August and imposed a clampdown in the Muslim-majority region, which both countries claim in full.

“The prime minister will exchange views on regional developments including the state of peace and security in South Asia arising from the situation in occupied Jammu & Kashmir,” the statement said.

China has rejected Indian actions in Kashmir as “unacceptable” and cautioned against unilaterally altering the disputed status of the region. China also controls a thinly populated portion of the region and has a longstanding dispute over the border with India.

India maintains its moves in Kashmir are an internal matter and meant to bring development as well as economic prosperity to the region.

The visit will be Khan’s third to China since taking office more than a year ago.

China’s ambassador to Pakistan, Yao Jing, told VOA that President Xi and Prime Minister Khan have developed a “very good relationship” to further bilateral ties between their nations.

“They are in contact quite often. I think that this is a good development because the top leaders of the two countries have a hundred percent consensus on this relationship and cooperation,” Yao told VOA.

Officials said that a number of agreements will be signed during Khan’s visit to further bilateral economic cooperation under the ongoing multibillion-dollar China-Pakistan Economic Corridor (CPEC), a pilot program of Beijing’s global Belt and Road Initiative (BRI).

China has invested about $20 billion in Pakistan to build road networks and power generation plants, effectively ending nationwide crippling electricity shortages.

The two sides are also expected to conclude talks on a multibillion-dollar ML-1 railway line China plans to fund and build under CPEC linking the northwestern Pakistani city of Peshawar to the southern port city of Karachi.

Pakistan announced Monday a reduced estimated cost for revamping of the country’s nearly 1,900-kilometer colonial-era railway line under an ongoing bilateral economic development mega project funded by China. The upgrade to “standard gauge” of what is known as the Main Line-1 (ML-1), which connects the southern port city of Karachi to the northwestern city of Peshawar, was originally priced at $8.2 billion, Federal Railways Minister Sheikh Rasheed said. The rail project is part of the China-Pakistan…

Both countries reject criticism that CPEC is a “debt trap” for Islamabad and has added to Pakistan’s economic troubles, slowing down the mega program in recent months.

“I don’t think it is slowing down and I think that is running according to our satisfaction,” said Ambassador Yao.

Source: Voice of America

Dated on: 7/10/2019