The strategic region in the north provides the only vital link with China. It is also on the key route of the ambitious China-Pakistan Economic Corridor (CPEC), linking western China to southern Pakistan's Gwadar Port with a network of roads, highways, railways and investment parks.
An official said that a committee was working on a plan to address Chinese concerns over its investment after India objected to its building of the CPEC through Pakistan-occupied Kashmir (PoK).
If implemented, the mountainous region would find a mention in Pakistan's Constitution for the first time. According to analysts, its new status could have far-reaching ramifications - change of Pakistan's traditional stance on Kashmir and also possible increase of friction with India.
The PoK is divided into what is called as 'Azad Kashmir' and Gilgit-Baltistan. Both these regions have their own legislative assemblies and, technically, are not part of Pakistan federation.
Internally, both regions are largely independent but external affairs and defence are strictly controlled by Pakistan.
Traditionally, Pakistan maintains that Kashmir is a disputed region and its status should be decided through plebiscite under the UN resolution of 1948-49.
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