Pakistan and China have started discussion on building a cross-border railway linking northern areas of Pakistan-occupied Kashmir with Kashgar, an old Chinese Silk road town in the restive northwestern Xinjiang province.
Masood Khan, Pakistan's Ambassador to China, said that a feasibility study of the railway had been conducted but there was still no time-table for starting the construction.
"By using this option, you can shorten China's trading routes from the Gulf to Shanghai by about 5,000 miles. It is very short," Pakistan state-run APP news agency quoted Khan as telling the Chinese media.
He said talks about a cross border pipeline that can carry oil and gas to China via inland Eurasia have also begun.
Pakistan President Asif Ali Zardari, who concluded his three day visit to the troubled Chinese province last week, said the region plays a strategic role in firming up the relationship between China and Pakistan.
China has blamed militants of the East Turkistan Islamic Movement (ETIM) trained in Pakistan based terror camps for creating unrest in Muslim Uygur majority in Xinjiang.
Pakistan's Information Minister Firdous Ashiq Awan, who is in Beijing on an official visit, underlined the need to change strategy to counter ETIM militants.
"They (terrorists outfits) keep on changing their strategies and actions. So we must work in close collaboration and also change our actions, and that can only be done through close coordination and mutual understanding," Awan told the Chinese media.
With better coordinated efforts, we can curtail terrorism, she said, condemning the recent attacks by the banned ETIM militants in Kashgar, close to PoK. China is already helping Pakistan and has always supported its efforts to eliminate the menace, she was quoted as saying by APP.