China agrees to bailout Pakistan

–Prime Minister Imran Khan and Chinese premier Li Keqiang agree to ‘firmly move forward’ on infrastructure projects in Pakistan

–Vice FM says China will provide Pakistan with economic aid but more talks will take place to fix details, no change in number of CPEC projects

–Pakistan and China sign 15 agreements and MoUs for economic and technical cooperation, agriculture, poverty reduction, science and technology etc

BEIJING: China on Saturday announced that there would be no change in the number of projects under the China-Pakistan Economic Corridor (CPEC), as Beijing agreed to provide economic aid to Islamabad to help overcome its financial woes.

The two countries agreed to “firmly move forward” on various infrastructure projects in Pakistan following a meeting between Prime Minister Imran Khan and his Chinese counterpart, Li Keqiang.

The agreement follows concerns that Islamabad’s spiralling financial crisis could lead Beijing to scale back its projects in the country, where it is helping to build the multi-billion dollar CPEC.

The project is at the heart of Chinese President Xi Jinping’s Belt and Road Initiative, an ambitious, globe-spanning trade and infrastructure programme.

The massive undertaking has drawn both praise and criticism from around the world, with some saying the initiative is filling a critical funding gap in the developing world, while others fear the Chinese loans financing the work are designed to entrap their recipients in debt.

In Pakistan, Belt-and-Road-linked projects have come in for heavy criticism for their opaque lending terms, with some arguing that Beijing’s largesse may worsen Islamabad’s fiscal dilemma.

But both Pakistan and China played down those concerns on Saturday, describing the programme as a key part of Islamabad’s recovery plans.

In his meeting with Li, Khan invited the Chinese premier to visit Pakistan and see for himself the difference the mega-project has made in the country.

“CPEC in 2013 was just an idea. Now it is on the ground. And it has caught the imagination of the people of Pakistan,” he said.

“We feel that this a great opportunity for our country to progress, to attract investment. It gives us an opportunity to raise our standard of living, growth rate.”

Li praised the relationship, saying “China and Pakistan are all-weather partners”.

“Pakistan has always been regarded as a foreign policy priority by China.”

The Chinese premier congratulated Prime Minister Khan on his successful election as the prime minister and expressed his desire to work closely with him to further strengthen the “all-weather strategic cooperative partnership” for shared future.

Sharing his vision of ‘Naya Pakistan’, the prime minister congratulated Premier Li on successful anti-corruption drive, poverty alleviation, and modernization of China based on innovation and IT.

The two leaders also witnessed the signing of a number of agreements and MoUs in the fields of economic and technical cooperation, agriculture, poverty reduction, science and technology, innovation and combating drug trafficking besides establishment of joint research center on earth sciences, joint working group on social and livelihood affairs.

Both the countries also signed letters on foreign ministers’ strategic dialogue mechanism to make overall planning and coordinate cooperation in various fields.

Prime Minister Imran Khan and Chinese premier Li Keqiang witnessed the signing ceremony while the foreign ministers of both the countries and the concerned ministers and high-level officials of two countries signed the agreements and letters.

BAILOUT CONFIRMED:

Later, Chinese Vice Foreign Minister Kong Xuanyou told reporters that China will provide Pakistan with economic aid but more talks will take place to fix the details.

“During the visit, the two sides have made it clear in principle that the Chinese government will provide necessary support and assistance to Pakistan in tiding over the current economic difficulties,” Kong said, adding that “as for specific measures to be taken, the relevant authorities of the two sides will have detailed discussions”.

Pakistan’s foreign reserves have plunged 42 per cent since the start of the year and now stand at about $8 billion, or less than two months of import cover.

Last month, Pakistan received a $6 billion rescue package from Saudi Arabia, but officials say it is not enough and the country still plans to seek a bailout from the International Monetary Fund (IMF) to avert a balance of payments crisis.

It would be Pakistan’s 13th rescue package from the multilateral lender since the late 1980s.

Though China is Pakistan’s closest ally, Khan’s newly elected government has sought to re-think the two countries’ signature project, the $60 billion China-Pakistan Economic Corridor (CPEC), which Beijing touts as the flagship infrastructure program in its vast Belt and Road Initiative.

Pakistan has looked to amend CPEC to put greater emphasis on projects that focus on social development, rather than purely on infrastructure.

Kong said there would be no change in the number of projects under CPEC.

“There is no change at all. If there were, it would only be to increase, not decrease” the number of projects, he added.

However the scope of the project would increase and will tilt in favor of people’s livelihoods, Kong said, also without elaborating.

The Chinese official said he believed all these activities and number of agreements signed between the two countries showed that this had been a smooth and successful visit of Prime Minister Imran Khan to China.

After visiting Beijing, Prime Minister Khan is set to be a key note speaker at a major import fair in Shanghai, an event that China hopes will show the world the country welcomes foreign companies and their products.