China Will Continue Support For Debt-Hit Pakistan, Says Xi

President Xi Jinping said on Wednesday that China will continue to support Pakistan as it tries to stabilise its finances.

During a visit by Pakistan Prime Minister Shehbaz Sharif to Beijing, the two countries agreed to facilitate cross-border transactions by signing an agreement to deal in the Chinese yuan.

Pakistan had been struggling with a balance of payments crisis even before devastating floods hit the country this summer, causing losses estimated at more than $30 billion.

The Pakistani PM was expected to seek debt relief from China, particularly the rolling over of bilateral debt of around $23 billion.

A man and a girl use a makeshift raft as they cross a flooded street, following heavy rain during the monsoon season in Hyderabad, August 24, 2022. A vast area was inundated in the country’s worst ever floods that started in mid-June and claimed over 1,700 lives and caused damage in excess of $30 billion. Photo: Yasir Rajput, Reuters.

Economic Partners

China and Pakistan should also move forward more effectively with the construction of their economic corridor, as well as accelerate the construction of infrastructure for the Gwadar Sea Port, Xi told Prime Minister Shehbaz Sharif during their meeting at the Great Hall of the People.

China has been involved in major mining and infrastructure projects in Pakistan, including the deepwater port at Gwadar, all of which are part of the $65-billion China-Pakistan Economic Corridor (CPEC).

Xi added that the countries should work together to create conditions for early implementation of the Mainline-1 railway upgrading project and the Karachi Circular Railway project.

Development Projects

China will also export technology for a 160 km/h high-speed train to Pakistan, state broadcaster CCTV said on Wednesday.

The developments and projects in Pakistan, a longtime Chinese ally, are part of Xi’s Belt and Road Initiative (BRI) to improve China’s road, rail and sea routes with the rest of the world.

China welcomes Pakistan to expand high-quality agricultural exports to the country, and is willing to deepen cooperation in areas such as the digital economy, e-commerce, photovoltaic and other new energy sources, Xi said.