Chinese authorities has so far only tacitly acknowledged the economic crisis brewing in Pakistan as the state media continues to talk about the strengths of the China-Pakistan Economic Corridor. According to The Print, Chinese people on social media are seemingly not naïve though as they are asking questions about the future of Pakistan’s economy and the reliability of the ‘iron brotherhood’ relationship with Islamabad.
Pakistan’s defence minister Khawaja Muhammad Asif boldly stated on 19 February that the country has become bankrupt. The confession piqued the interest of Chinese people who only see their state media maintain radio silence on it.
The hashtags “Pakistan bankruptcy” and “Pakistan Defence Minister says the country is bankrupt” briefly trended on the Chinese social media platform Weibo. But they didn’t pick up traction as Beijing continues to play down the severity of the economic crisis in Pakistan.
Growing Chinese debt
Pakistan owes $30 billion to the Chinese government and its financial institutions, which is just 30 per cent of its total foreign debt. The country also owes the IMF, the World Bank, and the Asia Development Bank.
If that wasn’t enough, China Development Bank recently announced a $700 million loan to boost Pakistan’s forex reserves by about 20 per cent.
Despite there being relative silence on the economic crisis, some experts in China have said that Beijing will help Islamabad.
“At present, Pakistan does face risks similar to Sri Lanka, but I think it is unlikely that it will go bankrupt because China, Saudi Arabia, and other countries are all helping Pakistan. The problem now is that the IMF loan has not been implemented,” wrote Liu Zongyi, secretary-general of the Shanghai Institutes for International Studies.
Wang Yi, director of the CCP Central Foreign Affairs Commission alluded to the economic difficulties during his recent meeting with Pakistan’s foreign affairs minister Bilawal Bhutto Zardari in Germany.
“China firmly supports Pakistan in maintaining security and stability as well as achieving development and revitalisation, and stands ready to provide assistance within its ability to help Pakistan overcome temporary difficulties,” said Wang Yi in Munich on 17 February.
Chinese citizens, though, have argued for the need to help Pakistan because it will reduce pressure on India — something perceived as unfavourable for China.
“The current situation in Pakistan is indeed very bad. The economy is on the verge of bankruptcy, the political oligarchs hold power, and there is friction with Afghanistan on the border. If Pakistan is in chaos, the pressure on India will be greatly reduced, which is not good for our country” wrote a Weibo user from Shanghai.
