While economic development was at the forefront, China's main intention was supply of critical oil for itself. The agreement was signed at the Great Hall of the People.
The tunnel will connect Pakistan's Gwadar Port on the Arabian Sea and Kashghar in Xinjiang in northwest China. China had control of the Gwadar port this year that gave it access to the Arabian Sea and Strait of Hormuz through which a third of the world's oil is transported.
The tunnel is likely to serve the critical oil necessity of China.
Per experts, the corridor will fasten development in Xinjiang that has seen frequent unrest and it will also open up a new route for China's energy imports from West Asia.
The corridor will pass through Pakistan occupied Kashmir (PoK), which borders Xinjiang and provides the only feasible transport link between China and Pakistan.
The USD 18 billion deal was inked by Pakistan's Minister for Planning and Development Ahsan Iqbal and Chairman National Development and Reforms Commission of China, Xu Shao Shi.
OneIndia News (with inputs from PTI)