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ISLAMABAD: The United States is concerned about debt owed to China by Pakistan and other countries, US State Department Counselor Derek Chollet said on Thursday during a visit to Islamabad as the country dealt with an economic crisis.

“We have been very clear about our concerns not just here in Pakistan, but elsewhere all around the world about Chinese debt, or debt owed to China,” Chollet told journalists at the US Embassy in Islamabad after he met with Pakistani officials.

China and Chinese commercial banks held about 30% of Pakistan’s total external debt of about $100 billion, according to a report by the International Monetary Fund released in September last year.

US delegation to visit Pakistan as two sides seek to repair ties

Much of that debt has come under the China-Pakistan Economic Corridor, part of Beijing’s Belt and Road Initiative.

Cholett said Washington was talking to Islamabad about the “perils” of a closer relationship with Beijing, but would not ask Pakistan to choose between the United States and China.

Relations between Islamabad and Washington had turned frosty over the war in Afghanistan, but there has been a thaw in recent months, with an increasing number of high-level visits.

Officials from China and the United States will be part of a multi-country meeting of a new sovereign debt roundtable on Friday.

G7 and multilateral lending institutions have long pushed for broad efforts to deliver debt relief to heavily indebted nations to help them avoid cuts in social services that could spur social unrest.

US Treasury Secretary Janet Yellen and other G7 officials see China, now the world’s largest sovereign creditor, as a key stumbling block in debt-relief efforts.

Chollet said the US was working with Pakistan to navigate through the current crisis.


Comments are closed.

TimeToMovveOn Feb 17, 2023 06:23am
"China and Chinese commercial banks held about 30% of Pakistan’s total external debt of about $100 billion," -- What exactly has Pakistan gotten in return for incurring this debt? Why has there been no improvement in GDP and FX with such massive investments? China gave Pakistan a once-in-a-lifetime opportunity via CPEC, to become a hub of development. Unfortunately, the Chinese did not realize how incompetent the Pakistan leaders were.
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RH Usmani Feb 17, 2023 10:05am
@TimeToMovveOn, While there is no argument about being incompetent, however I think in the case of CPEC, it has more to do with structuring of the CPEC Project than with incompetence. For e.g., the Chinese debt US$ 30 Bn or so was extended to Pakistan for CPEC related projects, however the debts were mostly subjective to raw material procurement from China, employment of Chinese Contractors & even Chinese labor in some cases. As such, while the Pakistan assumed debts of ~ 30 Bn, the proceeds thereof were ultimately diverted to generating economic activity in China, instead of Pakistan. Thus the reason behind lack of improvement in Pakistan's GDP.
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Pakistani1 Feb 17, 2023 11:28am
The noise from US always focuses on preservation of their own influence rather than benefit of the others.
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Ulgen Feb 17, 2023 12:57pm
@TimeToMovveOn, They are not incompetent but corrupt along with top military brass.
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TimeToMovveOn Feb 18, 2023 10:07pm
@RH Usmani, I have been following CPEC for a long and are absolutely correct bro--that the structure was setup, that all the money that china gave as loans went back to China in a different form. I am from India, and I initially I really thought very highly of CPEC. Even the Indian Govt and USA had stupid misplaced apprehension about CPEC. This CPEC project, unfortunately, is not going to take off (althouth I wish it does). You guys need an economic catalyst like CPEC to bring the country up, but today it is not going to be that way. For example, the Chinese are building Gwadar airport for landing A380s. What exactly is A380 going to bring. Today in Dawn it was written that concrete and buildings dont bring economic activity. The seed is the people who make the concrete and buildings turn in economic fruits. Pakistan missed a once in a lifetime opportuinty. Hopefully someone raises up to turn this tide. Best wishes.
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Dr.Salaria, Aamir Ahmed Feb 19, 2023 12:57am
China must forgive these loans. And they will, the formalities are in process and good news will be out soon, i.e. total debt forgiveness. Pak China relations are sweeter than honey, stronger than steel, higher than Himalayas and deeper than the oceans.
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