A report in the Hong Kong-based South China Morning Post (SCMP) last week claimed that a Chinese “government-funded feasibility study” published in a journal recommended the construction of a “$58 billion railway” connecting China’s landlocked Xinjiang region with Pakistan’s Arabian Sea port of Gwadar.
The study, according to the SCMP, said that the project “had the potential to reshape trade and geopolitics across the Eurasian continent.”
The “news” then traveled fast. Fox News picked up the story, describing the project as “China’s railroad to world domination.” And the party that leads Pakistan’s ruling coalition then posted screenshots of the Fox News story on its social media accounts, proclaiming that Pakistan’s path to progress was now once again bright.
(Elections are due this year. Pakistan is on the verge of a recession. And inflation is close to 40 percent.)
There is, however, a huge problem with this story as it’s played out. It’s almost entirely false.
In reality, there’s been no feasibility study conducted on a China-Pakistan railway network. The $58 billion cost itself is conjecture.
Even if there was one, Pakistan is in no position to afford such a project. And China has no desire to pay for it. Right now, Beijing is struggling to recoup the billion dollars in arrears owed by Islamabad to its Chinese companies that operate power plants in Pakistan.
What follows is the story of how a low-quality article in a Chinese trade publication became fodder for Beijing’s friends and foes. It shows how the China factor draws eyeballs and can be used to trigger clicks, amazement, and fear.
Unpacking a Reporting Error
As someone who’s been closely watching the China-Pakistan relationship for a decade, I instinctively viewed the SCMP report with skepticism. The stated cost of $58 billion is astronomical and more than twice the amount of aid and financing Beijing has provided through the China-Pakistan Economic Corridor — a Belt and Road Initiative-related project.
At the moment, Chinese banks are unwilling to finance new projects in Pakistan until the arrears mentioned above are cleared. And Chinese power plants in Pakistan sit idle in part because Islamabad doesn’t have the dollars to pay for imported fuel.
Pakistan is in the midst of a serious economic crisis. Another International Monetary Program is needed. It’ll likely require the restructuring of debt owed to China and other creditors. The idea that Pakistan could possibly take on even more debt — roughly a sixth of its GDP — is simply ludicrous.
So to make sense of the SCMP story, I turned to Stella Hong Zhang. She’s a postdoctoral fellow at Harvard Kennedy School’s Ash Center and an expert on China’s overseas infrastructure financing. Hong is a business journalist turned academic. In more ways than one, she’s uniquely equipped to understand this story.
Hong, as it turns out, had already read the original journal article. And she describes it as a speculative, “qualitative,” non-technical exercise. There’s no complex engineering or math in there that one would find in a feasibility study — especially one that involves a project of such complexity and cost. (The railroad would cross through the frigid, rugged, landslide-prone Karakoram mountains along the China-Pakistan border.)
In fact, the paper itself suggests that the project remains at the pre-feasibility stage. In other words, the authors don’t even state that anyone has conducted a feasibility study for the railway. (Feasibility studies assess whether projects are viable from financial, environmental, engineering, and other perspectives.)
On top of that, there are no details of the railway route. Only its endpoints — Kashgar in China and Gwadar in Pakistan — are mentioned. The journal article also provides no map.
These details are important because China and Pakistan have been discussing revamping Pakistan’s main railway line — the ML-1 — for roughly a decade. The ML-1 project has been stuck at an advanced stage of negotiations. China and Pakistan are at an impasse over the ML-1’s cost and financing terms. The ML-1 doesn’t go anywhere near Gwadar or the border with China. Entirely new lines would have to be built to connect to Gwadar and Kashgar. And their economic viability is questionable.
The fact that the ML-1 goes unmentioned in the journal article is a reflection of its lack of rigor.
How News on China Travels
In my view, this isn’t a case of disinformation. The evolution of this story probably begins with a general news reporter’s misreading of the content and context of an article in a trade publication.
The reporter’s apparent confusion is to an extent understandable. Some of the co-authors of this journal article work for the China Railway First Survey and Design Institute Group — a state-owned company that would probably conduct the feasibility study for such a railway line.
Hong speculates that the intent of the co-authors is “to come up with new strategies of how to finance overseas projects” as government sources are drying up. The authors, she says, “are basically asking for a state subsidy — either from China or Pakistan” because they know this railroad project isn’t economically viable.
Chinese companies, as Hong notes, are “exploring different modes of financing, including equity investments.” And so they’re “lobbying for all kinds of potential support from the state for their sector.” That’s the most likely context in which this study came about. Tellingly, one of the co-authors works in the capital financing department of China Railway FSDI.
This story, as is common these days, quickly took on a life of its own. A web reporter for Fox News recycled the SCMP article’s contents with a new headline about how China seeks “world domination.” China headlines get clicks. And conservatives in the U.S. are zeroing in on the China challenge, increasingly seeing the Russia-Ukraine war as a distraction.
Narratives about China’s ascendance not only trigger the anxieties of Americans across the political spectrum — but those on the right use them to promote the image of President Joe Biden as a weak, incompetent leader. America, Biden’s opponents say, is losing to China in the Middle East and other parts of the world.
The China angle is also deployed in countries where Beijing is popular. The Pakistan Muslim League – Nawaz party (PML-N), which heads the struggling ruling coalition in Islamabad, used the Fox News story on its social media accounts to create the impression that good times are just around the corner. What the PML-N was trying to imply — and Pakistani political parties do this often — is that it (and not the opposition) has the confidence of Beijing and billions of dollars will soon flow in.
Given ground realities, these insinuations are in the realm of fantasy. But they show that despite the close relations between Beijing and Islamabad, China illiteracy is pervasive in Pakistan — and not just in a linguistic sense, but also in terms of understanding how China works.
In the end, what we have here is also a case study of how information flows in our digital era. Readers made judgments based on headlines, tweets, and screenshots. Fewer people bother to read full articles. And news outlets and politicos equally love big numbers, big projects, and big powers. This “story” just happened to give all of that to a diverse set of actors in different parts of the world.
These days, we are not just increasingly divided by identity and ideology, but we also share many of the same frailties as nodes in the digital world.
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