Chinese envoy says Beijing not saddling Pakistan with debt

ISLAMABAD: The Chinese government’s top diplomat defended Beijing’s Belt and Road infrastructure initiative during a visit to Pakistan on Saturday, rejecting criticism the project has saddled Pakistan with expensive debt.

State Councillor and Foreign Minister Wang Yi was in Pakistan for a three-day visit in the first high-level meetings between the neighbours since new Prime Minister Imran Khan took office.

Beijing has pledged $57 billion in loans for Pakistan as part of its vast Belt and Road initiative, deepening ties at a time when Islamabad’s relations with Washington are fraying over how to deal with Islamist militants waging war in Afghanistan.

Whether China was overburdening Pakistan with debt has become a sore point for both nations, who both say the loans are sustainable, after US Secretary of State Mike Pompeo in July warned any potential International Monetary Fund bailout for Pakistan’s troubled economy should not provide funds to pay off Chinese lenders.

Wang said the Pakistani portion of the Belt and Road initiative, known as the Chinapakistan Economic Corridor (CPEC), has helped increase economic growth by 1-2 per cent and has contributed 70,000 jobs.

“CPEC has not inflicted a debt burden on Pakistan, rather when these projects get completed and enter into operation, they will unleash huge economic benefits — and these will create considerable returns to the Pakistani economy,” Wang said during a news conference in the capital Islamabad.

Standing next to Pakistani Foreign Minister Shah Mehmood Qureshi, Wang said 47 per cent of Pakistan’s debt comes from the IMF and the Asian Development Bank.

Wang said 22 operational CPEC projects, of which nine have been completed, have triggered investment worth $19 billion so far. He also rejected concerns about transparency of CPEC by saying those worries were “false” as all the projects had undergone necessary approvals.