China promises Pakistan support as Imran Khan tells of 'very difficult' economy

Roman Schwartz
November 3, 2018

Federal Minister for Information and Broadcasting Fawad Chaudhry on Friday said that Pakistan likely to receive a huge financial package from China.

Pakistan has already approached the International Monetary Fund for a bailout package which it apprehends will come with stringent conditions of austerity besides scrutiny of $60 billion China-Pakistan Economic Corridor (CPEC) projects whose terms till now remained confidential.

He said with Pak-China trade balance now in favor of China, Pakistan wanted to get help from China for pushing the country's exports and address its one of the main problems of the current account deficit.

The prime minister said Pakistan attached great importance to its relations with China, and was committed to enhancing cooperation across the board.

Xi said the bilateral ties always stay vigorous and continue developing regardless of the changes in worldwide situations or the two countries' domestic affairs.

"China has always placed Pakistan as a diplomatic priority for China, supported Pakistan's safeguarding of national independence, sovereignty, and territorial integrity, and supported the new Pakistani government's smooth running of the government and advancement of national construction", the Chinese President said.

China's expected assistance is the second $6 billion package which Khan has managed to obtain in the last few weeks as Pakistan reeled under severe financial crisis.

Pakistan's new Prime Minister Imran Khan and China's President Xi Jinping were preparing to meet on Friday amid concerns over Pakistan's growing fiscal crisis and its ability to repay Chinese loans granted as part of Xi's Belt and Road initiative. "We made it clear many times", he said.

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Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018 (first 10 months of fiscal 2017-18). The other four countries to get waivers remained to be identified, but Turkey was predicted to be one of them.

The country's foreign exchange reserves have fallen to a near five-year low of US$7.8 billion, the State Bank of Pakistan said on Thursday, while the net foreign reserves held by commercial banks have also dropped, to US$6.4 billion.

On Sunday, he will head to Shanghai for the China International Import Expo, where he will lead a delegation of 76 government officials and business leaders, and deliver a keynote speech.

China is one of Pakistan's closest allies, and the Asian superpower today pledged to continue helping Mr Khan.

Khan is accompanied by foreign minister Shah Mehmood Qureshi, finance minister Umar, Advisor on Commerce and Trade Abdul Razzak Dawood, railways minister Sheikh Rasheed among others.

Andrew Small, a senior transatlantic fellow with the George Marshall Fund's Asia Program, said he believes China is willing to make adjustments, but Beijing needs to know what the administration's position is before it can make offers. The trip "is significant for President Xi Jinping, whose flagship BRI has had hiccups in recent months".

Xi said the two sides should deepen strategic communication, maintain regular visits and meetings between the two countries' leaders and enhance experience-sharing in the governance of a country.

The CPEC has also become a major irritant in India-China relations with New Delhi voicing its opposition to the infrastructure project as it traverses through Pakistan-occupied Kashmir (PoK).

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