Pakistan’s low foreign exchange reserves and lack of financial reforms increase its dependence on China: report

February 16, 2022 4:55 p.m. STI

Washington [US]Feb. 16 (ANI): Pakistan’s low foreign exchange reserves and lack of financial reforms have increased its dependence on China, according to a media report.
“Pakistan’s problem is that it does not have enough foreign exchange reserves because the economy is not growing fast enough for it to get money,” VOA quoted Aparana Pande, a researcher at the Hudson Institute, on Pakistani Prime Minister Imran Khan’s recent visit to China and the deepening of relations between Islamabad and Beijing.
Islamabad refuses to undertake structural reforms, which would allow second and third tranches of the IMF and other foreign investors to invest money, Pande said.
Experts have also raised concerns about China’s growing debt to Islamabad, with some saying the relationship between Beijing and Pakistan is a clear example of the communist regime’s debt trap diplomacy.
However, Madiha Afzal, a fellow at the Brookings Institution, cautioned against jumping to conclusions that Chinese lending is bad for Pakistan’s economy.

“It will depend on the terms of the loans, and China has proven to be an actor that … compels Pakistan to meet the terms of the loans. So Pakistan cannot necessarily defer payments on those loans, even if it needs or wants,” Afzal said, as quoted by VOA.
It came after Islamabad and Beijing issued a joint statement on Feb. 6 following Imran Khan’s meeting with Chinese President Xi Jinping and Prime Minister Li Keqiang.
The leaders of the two countries had an in-depth exchange of views on the full spectrum of bilateral relations as well as regional situations and the international political landscape. The meetings were marked by the traditional warmth, strategic mutual trust and commonality of views that characterize the Pakistan-China all-weather strategic cooperative partnership, according to the joint statement.
Reiterating his congratulations on the centenary of the Communist Party of China, Prime Minister Imran Khan praised the role of the CPC leadership with President Xi Jinping at the heart of China’s growth and prosperity and appreciated the President Xi for his personal contribution to promoting the enduring Pakistan-China relationship. partnership, the statement read.
The meeting between the two leaders comes in the wake of a diplomatic boycott of the Olympics led by the United States to protest against allegations of human rights violations in Xinjiang, which China denies.
The high-level meeting was intended to show support for Beijing at a time of diplomatic tension, according to VOA.
The US-based publication also said a series of new financial deals between China and Pakistan signal a shift in political alignments in the region with implications for South Asian neighbors the United States and for the economic future of Pakistan itself. (ANI)

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