China to push hard on its bargain on debt matters with Pakistan
Nov 04, 2022
Beijing [China], November 4 : Though Pakistan continues to eye for fresh impetus on CPEC projects, China, on the other hand, will be extremely careful with Pakistan's demand for rescheduling of debt, reported Inside Over.
Pakistan Prime Minister Shehbaz Sharif was on a two-day trip to China where he held a meeting with Chinese President Xi Jinping on expanding cooperation on the China-Pakistan Economic Corridor (CPEC).
Both leaders discussed broad-based cooperation in the economy and exchanged views on regional and global developments. However, Pakistan's all-weather friendship has apprehensions about debt rescheduling with Pakistan. China has already rescheduled debt worth USD 1 billion early this year.
It is pertinent to note that China is Pakistan's largest single-country creditor. Pakistan's debt servicing to China in 2022-23 accounts for almost 11 per cent of Pakistan's total external public debt stock and 45 PC of its total annual debt servicing. The total debt from China stands at USD 26 billion in public and private debts, reported Inside Over.
Pakistan wants to reschedule its bilateral debts with China. The debt is a total of USD 20.3 billion which includes USD 9.7 billion of Chinese debt. International Monetary Fund has reported that Pakistan owed 30 per cent of its foreign debt to China.
China's lending to Pakistan is three times greater than the IMF and far ahead of combined assistance by the World Bank and Asian Development Bank. However, experts from across the globe have expressed concerns that Pakistan might see an economic crisis like that of Sri Lanka, a country often associated with China's debt-trap diplomacy.
Floods in Pakistan have only worsened the economic crisis. Pakistan has requested the rollover of its USD 6.3 billion debt. In the next eight months, the debt will mature. Sharif and his team might find themselves faced with a great disappointment on the issue of debt rescheduling. China is surely going to push hard on its bargain on debt matters.
