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Why are they upset that the Chinese are building a railroad ?

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I have no doubt that they want political influence too.

Large-scale development projects in general are used for expanding sphere of influence.

The Chinese are building stuff using Chinese workers. Pakistanis are pissed for losing jobs in their own country

It's sort of neo-colonialism.

Chinese are building a railroad which Pakistan is paying for by taking loans from China. China brings it's own companies and workers to work on it. The railroad will most likely be used to transport Chinese goods from Gwadar to other parts of Pakistan and eventually into China and vice versa.

I think they want to reach a port on the Indian Ocean.

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Pakistan is going to have an interesting decade coming up. They have an insurgency with the Pakistan Taliban, a hostile Afghanistan Taliban, Balochistan is boiling, religious fundamentalism has destroyed any political process, they have one of the youngest population but don't have food or work for them.

All this is a recipe for a nightmarish situation for Pakistan government.