Pakistan is expected to receive $6 billion economic package from China including investments under CPEC
(BE2C2 Report) ISLAMABAD: Prime Minister Imran Khan, who is in Beijing on four-day official visit, called on Chinese counterpart Li Keqiang.
On Friday, PM Khan held a meeting with Chinese President Xi Jinping at the Great Hall of the People.
During meeting, according to sources, the prime minister took the Chinese leader into confidence over third country investment in the multibillion dollar China-Pakistan Economic Corridor (CPEC) which Pakistan is hosting with Gwadar port on the Arabian Sea as its southern gateway.
In his talks with President Xi, Prime Minister Imran Khan said his government was also keen to learn from China’s experience in poverty alleviation and anti-corruption, adding that he had followed President Xi as a statesman during his political career spanning over 22 years.
PM Khan, who took office in August, said his government had “inherited a very difficult economic situation”, –the country faces a looming financial crisis.
Pakistan’s foreign reserves have plunged 42 per cent since the start of the year and now stand at about $7.8 billion, or less than two months of import cover. Additionally, external debt and liabilities has risen to a touch over $95 billion as of June 30.
Pakistan is expected to receive $6 billion economic package from China during the PM’s visit, the sources added.
China said on Saturday it was willing to offer assistance to its all-weather friend’ Pakistan to help weather its current fiscal woes but that terms of such aid are still being discussed.
Following Li’s meeting with Khan, Vice Foreign Minister Kong Xuanyou said the two sides had “made it clear in principle that the Chinese government will provide necessary support and assistance to Pakistan in tiding over the current economic difficulties.
“As for the specific measures to be taken, the competent authorities of the two sides will have detailed discussions,” Kong told reporters.
Kong said there were no plans to scale back the China-Pakistan Economic Corridor (CPEC), although he did say it would be altered somewhat to “tilt in favor of areas relating to people’s lives”.
“There’s been no change in the number of CPEC projects. If there were to be any change, it would be an increase going forward,” he said.
Pakistan seeks to amend the CPEC to focus on socio-economic progress besides infrastructure development. Housing and vocational training of Pakistani youth are two major ones on the table including in areas of agriculture, industry, technical training, forestry, earth sciences and transfer of electronics — the two sides have already signed several agreements and MoUs of Cooperation.
Besides, Beijing has agreed in principle to provide Islamabad financial assistance on immediate and on short-term basis to tide over financial crisis, the sources added.
The Saudi and China announcements to assist Pakistan tackle its current fiscal woes have helped the market confidence surge. Pakistan Stock Exchange index PSX-100 climbed 11.4 percent over last 9 days — from 37714 on October 23 to 42002 on Friday November 2 (4290 points)
But Pakistan still have to approach International Monetary Fund to avert a balance of payments crisis.
In the past, Pakistan has taken loans from the IMF to avert a balance of payments crisis.
This will be 13th rescue package Pakistan plans to receive from the lender since the late 1980s.
Pakistan must also look towards other sources for help as well, said Cheng Xiaohe, deputy director of the center for international strategic studies at Renmin University, according to SCMP.
“Pakistan must seek all kinds of assistance”, Xiaohe said, as the country has stacked up almost $95 billion in debt which includes accumulated interests and loans.
The last 10 years have seen a continuous and significant deterioration in Pakistan’s debt sustainability, independent economists say.