The focus of spending is on building a China-Pakistan Economic Corridor (CPEC) - a 3,000 km road network from Gwadar in Pakistan to China's western Xinjiang region. The projects will give China direct access to the Indian Ocean and beyond.
Besides, the huge investment will improve the network of roads, railway and pipelines between the long-time allies.
Under the CPEC plan, China's government and banks will lend to Chinese companies, so they can invest in projects as commercial ventures.
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