ibusinesslines.com November 14, 2018

Chinese, Pakistan leaders prepare to meet amid debt concerns

03 November 2018, 01:00 | Kelvin Horton

India logdes protest against Pakistan, China over bus services which passes through Pak-Occupied Kashmir

Rising Kashmir

In reference to PM Imran Khan's visit to China, Federal Minister for Information and Broadcasting Fawad Chaudhry had said the nation would soon receive a very good news.

The last time was in 2013, when Islamabad got a $6.6 billion loan to tackle a similar crisis.

Neither man mentioned any economic aid in comments made in front of reporters. "Unfortunately we have inherited a very hard economic situation", PM Imran said, as quoted by Reuters.

"Unfortunately our country is going through a low point at the moment with two very big deficits, a fiscal deficit and a current account deficit", he said.

President Xi told the Pakistani premier that he highly valued the two countries' relations, reaffirming they were "all-weather" friends.

PM Imran will also meet the president of the Infrastructure Investment Bank Jin Liqun and Minister for International Department of the Central Committee Song Tao.

Earlier during his visit to Saudi Arabia, Riyadh committed Dollars 6 billion funding which included USD 3 billion deferred payment for oil imports.

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.

"After taking monetary and fiscal measures, in my opinion, our financing gap for this year will be around $12 billion", he said.

A report by China's state broadcaster CCTV said Xi was joined in the meeting by Politburo member Yang Jiechi and Foreign Minister Wang Yi.

Despite the questions raised, China has remained confident in the correctness of its approach to co-operation with Pakistan, with Foreign Ministry spokesman Lu Kang on Wednesday saying the economic corridor was a "mutually beneficial project between the two countries which plays an important role in improving people's livelihood and promoting economic development". He said that we are neither surprised nor did we expect anything substantial to be delivered there, because of the mindset India prefers to be in denial mode since the tragedy of Kashmir was born in 1947.

After meetings on Friday and Saturday in Beijing, Khan flies to Shanghai where he will attend the first China International Import Expo, where he will be a keynote speaker.

The minister said: "Cooperation in agriculture and security realm will be part of our discussion with the Chinese leadership". India opposes the project because the creation of the corridor envisages Chinese and Pakistani economic activity in the Gilgit-Baltistan area of the disputed Jammu and Kashmir region.

The statements evoked serious concerns in China as the CPEC is the flagship project of President Xi's pet multi-billion BRI. They also reviewed all the aspects of Pakistan-China strategic partnership.

"China wants to avoid such transparency because exposing the terms of the CPEC project agreements could validate the USA criticism of the Belt and Road Initiative (BRI) as a debt trap for emerging economies", the Post report said.

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