Apparently there are still bad sections, but more of the highway has been upgraded.[1] China is providing most of the money. In 2010, a major earthquake caused landslides which created a new lake, taking out part of the highway. It took until 2015 to build a new route with 5Km of tunnels.

Here's a partial list of projects being funded in Pakistan by China.[2] China's government seems determined to get a land linkup to Europe. Yet this isn't the main "New Silk Road" route - that's further north, through Iran and Iraq.[3] With all the wars in that area, China apparently sees a need to have multiple alternate routes for trade. Good thinking in Beijing.

[1] https://en.wikipedia.org/wiki/Reconstruction_of_the_Karakora... [2] http://boi.gov.pk/userfiles1/file/List%20of%20MoUs.docx [3] http://www.xinhuanet.com/silkroad/english/index.htm

China is also extremely interested in economically developing its inner regions, as they've lagged economic development which has come to coastal regions due to high cost of logistics. Anything bought in Islamabad that's 'made in China' was likely manufactured on China's east cost, and arrived via ship.

If it would be economically viable to have the same thing manufactured in Xinjiang or Qinghai, and shipped by road, it would be a huge boost for those areas. Especially if linked through Pakistan's road network to sea ports, bringing easy access to Middle East, Europe, Africa as ships would no longer have to navigate via Singapore.

An in reverse, it would be a huge diversification of import routes for commodities could come in via another route. Not oil specifically, but all kinds of bulk. Bulk carries of commodities are far less efficient than oil ships, the largest with a capacity of 100,000 tons but 30-60k capacity more common (far less than the capacity of a supertanker). So commodities needed to develop the west of China now have a simpler, more efficient route.

It's still just as mad. I went up to the Pakistan-China border last year.