China’s timely gesture

CHINA, the most trusted friend, has once again come to the rescue of Pakistan as one of its banks would be providing to Islamabad much-needed $1b loan to retire a liability of almost similar amount — including Eurobond debt incurred during the rule of retired Gen Pervez Musharraf. It will be the second time in the current fiscal year that China Development Bank would extend the credit to help Pakistan meet its foreign debt-related obligations.
Pakistan is facing financial crunch these days especially because of dwindling foreign inflows seriously impacting government efforts to strike a balance in its economic strategy and the budget. Remittances from Overseas Pakistanis are also coming down while there are indications that both economic and military related assistance from the United States might also been cut substantially. Under these circumstances, there was genuine fear that repayment of the already contracted and due loans would put further pressure on national economy. There are also reports that government is contemplating to launch a $1b Sukok bond and willingness of the Chinese bank to provide equal amount would surely go a long way in mitigating financial woes of the authorities concerned. Pakistan is, indeed, indebted to Chinese friends for providing a substantial amount at the right time to bail the country out. Already, China is investing over $56b on different projects under the umbrella of China-Pakistan Economic Corridor which has opened several avenues for business ventures that were previously unexplored between the two countries. In latest development, a famous Chinese company — Yutong Bus — has expressed interest in investing in inter-city and intra-city bus services in Sindh and also intends to set up a bus manufacturing plant for the purpose. And in a related development, a Chinese company — China Communications Construction Company (CCCC) has got initial approval for setting up a 300-megawatt imported coal-based power plant in Gwadar, which would prove to be crucial in attracting investment for development of the port city, which is set to become a regional hub of trade and commerce. It is all the more relevant to point out that Chinese cooperation is without political and strategic strings attached to it as is the case with some other countries.

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