February 13, 2023
2 mins read

Economic Crisis Disrupts CPEC Projects in Pakistan

Some analysts have argued that Beijing views the current Pakistani government as too unstable to be a viable partner…reports Asian Lite News

A reactor that was recently inaugurated by Pakistan Prime Minister Shehbaz Sharif was funded by China to strengthen Pakistan’s energy security. The work on the reactor began in 2016 after the launch of the China-Pakistan Economic Corridor (CPEC). The reality is Pakistan has been slow to complete infrastructure projects and China has been slow to fund new ones, reported Foreign Policy.

The slowing pace of the CPEC projects is not only because of the ongoing economic crisis in Pakistan as it cannot afford the infrastructural loans extended to it, but also due to Beijing’s own economic slowdown. When Sharif visited Beijing last November, he formally requested a loan grant of USD 6.3 Billion. However, China has yet not approved any loans requested by Sharif, the report claimed. However, it is not just the first setback in long-standing China-Pakistan ties on the diplomatic front. Last year, China didn’t oppose India’s move to exclude Pakistan from a high-level meeting on the sidelines of a virtual BRICS summit that included other emerging economies. China which hosted the event might have stepped in to help Pakistan in such circumstances, the report claimed.

Some analysts have argued that Beijing views the current Pakistani government as too unstable to be a viable partner, the Foreign Policy said.

Further, China has also been worried about the security risks that are on a rise in Pakistan. A few recent attacks have targeted Chinese investments and nationals in Pakistan including at a dental clinic in Karachi last September, a Confucius Institute in Karachi last April, and a luxury hotel in Baluchistan hosting a senior Chinese delegation in 2021, the report said.

The report claims that during the November meeting last year Chinese President Xi Jinping also expressed concerns regarding many of these recent attacks on Chinese Investment in the country.

These investments of China in Pakistan may not be for long especially as Pakistan’s crisis continues to worsen. Last month, inflation reached its highest level since 1975; its foreign reserves currently cover less than three weeks’ worth of imports. On Thursday, Islamabad announced that the most recent round of talks with the International Monetary Fund had failed to produce an agreement to release new funds. As an investing country would like to engage with a more stable government in Islamabad, according to the report. (ANI)

ALSO READ: Will Pakistan go for debt restructuring?

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