The two countries have signed a deal to acquire the usage rights to more than 2,000 acres of land for a Chinese company, Chinese official media reported. Asked about the deal between the two close allies at the Gwadar port city, which will get linked to China's Kashgar city in Xinjiang through a network of roads and oil pipelines, Chinese Foreign Ministry spokesman Hong Lei said that the port development is a mutually beneficial project.

"It is a major project under the China Pakistan Economic Corridor, (CPEC). We will continue to uphold the principle of mutual consultation and mutual benefit and move ahead with the port project," he said.

India has objected to the CPEC as it passes through the Pakistan occupied Kashmir (PoK). China defends the project saying it is a commercial venture aimed at improving livelihoods of local people. State-run CCTV reported that a delegation led by Wang Xiaotao, Deputy Secretary General of China's National Development and Reform Commission, signed a lease agreement with the Pakistani government.

The 43-year lease will see the government of Baluchistan province in southwestern Pakistan provide a 923-hectare swathe of tax-exempt land as part of the CEPC which links western China to the Arabian Sea. China is expected to invest USD 1.62 billion in the Gwadar project, including construction of an expressway linking the harbour and coastline, a rail link, breakwater and other nine projects expected to be completed in three to five years, state-run China Daily reported.

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