Pakistan Addresses US Unease Over $100 Billion Chinese Debt

Pakistan has the sovereign right to choose its economic partners from around the world on a mutually beneficial basis, said the Foreign Office in response to US government concerns over Chinese investments influencing the South Asian economy.

Foreign Office spokesperson Mumtaz Zahra Baloch said Pakistan is grateful and appreciative of its friendship with China, which has always stood by Pakistan in times of need.

The spokesperson emphasized that China has been a reliable and steadfast friend to Pakistan over the last several decades. “The Pakistani nation is proud of its friendship with China which has always come to Pakistan’s assistance when needed,” she said, adding that “Pakistan being a sovereign state exercises the right to choose its economic partners from around the globe on a mutually-beneficial basis. We consider China as an all-weather strategic cooperative partner”.

These remarks come after US State Department Counselor Derek Chollet said last week that Washington was concerned about all the debt owed to China by Pakistan and other countries.

“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.

Cholett stated that the US was speaking with Pakistan about the risks of a closer relationship with Beijing, but that Washington would not force Islamabad to choose between the US and China.

According to an International Monetary Fund report released in September last year, China and Chinese commercial banks held approximately 30 percent of Pakistan’s total external debt of approximately $100 billion. A large portion of that debt is covered by the China-Pakistan Economic Corridor, which is part of Beijing’s Belt and Road Initiative.

Over the last few decades, Pakistan has grown increasingly close to China, which has provided billions in loans and is its single largest creditor. Regardless, Pakistan is in the grip of a ravaging economic crisis, with decades of high inflation and dangerously low foreign exchange reserves depleted by debt repayment obligations.

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